CISCO IMPLEMENTING ERP

Abstract

This paper discusses the implementation of a new ERP system in Cisco Inc to replace system that failed to offer the required redundancy, maintainability and reliability. A background is provided on the various issues that necessitated the replacement of the process and the failures in the current system. It highlights the selection process for a vendor and consultant for the new system. The various issues addressed include the team composition, work structure and budgeting and scheduling as important tools .various assumptions and lessons learnt in the paper are also highlighted.

Back ground

The foundation of Cisco Inc was laid in 1984, and the firm was traded publicly in 1990. By 1993 , Cisco was supported by a software package based on UNIX in carrying out its major tasks  in processing of transaction. This package offered support for key functional areas in the firm including manufacturing, financing and Order entry. Pete Solvik joined the company at this time and after assessing the present software package based on UNIX that was in use, he found it inadequate in terms of providing the needed redundancy, reliability and maintainability level so as to be at par with the prevailing business trends (Austin, Nolan & Cotteleer, 2002). At this time, even upgrading of the present software vendor was not enough to support the changing needs of the business. The structure of management process provided that every functional unit of the organization decides on its own the future of IT systems they would use. Every department’s IT representatives were to report costs to Slovik whose management structure for the departments remained strict. Band –aiding the present system for every head of department was never going to be enough in keeping up with the rapid rate of growth in the firm. It was difficult for any person to present a costly and time consuming proposal that would replace legacy systems to the board (Austin et. al 2002).

Failure in existing system

The initial attempt would be to avoid ERP just as Solvik did, due to length time and large expenditures required for implementation project. Moreover, every department is presented as being independent of others, and this goes against organizational structure that ERP supports. This explains the plan to allow every functional unit in Cisco to decide on its own the software application they would use. The requirement was that all functional units have to utilize the same database and architecture to ensure standardization was maintained within the firm. There were limited changes in software support system at the firm in the following year since no department was able to adopt an updated package but existing systems were fixed and these somehow ensured continuous operations. There was to be a total failure in the legacy environment for Cisco and the resulting challenge could not be ignored further. The resulting shut-down of the firm led to the conclusion that autonomy in system replacement in the system was being used for every functional area was no longer successful.

Implementation of a new ERP system

At this point , the need for arresting the situation arises and which requires the adopting a single integrated system for replacing the applications at Cisco rather than  using much time attempting to integrate different projects across separate functional areas. This involves forming a team that would look into the best replacement to the existing support system of the software. There are various aspects that can determine how the new system would be implemented and these comprises of low customization, less time and high priority. There are various options for doing this; acquiring one ERP system but the purchase would be expensive , its implementation process would time consuming and would results to replacement of autonomous structure for all the departments; an upgrade on the current  system that would no longer support Cisco in its current size and form. The need for a large system that could accommodate the increasing needs of the company leads to option of sourcing for ERP as a single system for the entire firm.

Selection of vendor and consultant plan

The consultant of the project implementation is KPMG that has agreed to provide the consulting services needed in terms of business knowledge and technical skills. The role of the consultant is to provide a manager for program implementation and other team members who will provide the necessary knowledge for evaluation of the various software packages in the market. Oracle is chosen as the right vendor due to their capability in manufacturing, their close location and the potential for developing long-term functionality and their desires to bring success in Cisco project. As their first attempt in implementation of Oracle ERP and hence the vendor showed high motivation in ensuring that whole project is a success. They had to prove that their product contained the necessary improvements to support the growing needs in Cisco. The contract had to reflect the vendor’s commitment through assuring their capabilities.

 What is needed in this scenario is not just a software package but software that sows improvements in transaction process of the firm, ability to provide redundancy and enhanced manufacturing capability. Oracle’s commitment is supported by the opportunity to market this new software in the market on the platform of Cisco success in the various transactional processes. Implementation process is a very essential phase of project management since it determines how valuable this product to be adopted in the firm will function in regard to addressing the needs of the organization. As such, all parties involved in the implementation of the project have to commit to offering their best effort in its success, so that the large amount of resources allocated in the budgetary process can be justifiable (Happy, 2010). The failure of the project is likely to stem from this stage if the parties involved do not share similar enthusiasm and motivation to see the whole process attain the desired objectives or goal (Collins, 2010).

 

Techniques in the implementation process

Team recruitment plan

Implementation of a companywide system that would serve the growing needs requires a lot of engagement of business people in the firm and individuals from the IT section. The policy on team selection includes experts from the two departments and most competent individuals from each department in the organization that are to be included in the team for ERP implementation. Inclusion of competent and experienced people from every department is a key success factor in the implementation process. Another important aspect is the involvement of a consulting partner who can assist in the whole implementation process. Such a consultant can provide the required assistance to Cisco in selecting the appropriate vendor for ERP. The partner should agree to offer the necessary support in terms of technical skills, experience and expertise in business knowledge. The partner should also be willing to provide the needed expert resources that are required in the completion of a project of this magnitude in shortest time possible. The partnering firm is therefore expected to have a competent program implementation manager who will provide the relevant leadership to the firm. Leadership is a necessary factor in the success of project management since it provides direction and control for the various activities that are involved in planning and implementation phases of a project (Collins, 2010).

Work structure

The members of the team to be involved in the implementation process will be 90 members who will carry out the actual process of implementation. The members involve those individuals who are considered the best across the entire business community of Cisco to represent their respective departments in functional units. This involved a policy of the company which outlined that for those people working in this process, there was is need for changing their career or line of work since the project would be short-term. The structure involves splitting of team members into five smaller teams to work in specified process areas. Each of such areas relates to the main functional areas including manufacturing, financing , order entry, technology and reporting. Every group comprised of a leader from information systems of the company, IT and business consultants from the Oracle and KPMG as partners, business leader for the company and employees from the company as members of the team. The management of the various groups is done from one office that consists of consultant’s project manager and project manager from the company. An established steering committee is tasked with monitoring the entire management team and comprises of the Cisco executives and an executive from the partner. The approach of using a steering committee is aimed at relieving the team involved in development of the need to engage directly in the implementation process.

 

Budgeting and scheduling plan

The budgeting process as a technique involves the forecasting and quantifying the action plan to itemize the various expenses or expenditures that will be allocated in this project. The budgeting will be used as a tool that will compare the budget results as set standard or target as compared to the actual results so as to note any variances from the plan of the project. The process will go through regular intervals in the whole project with an aim of taking control measures and aligning the actual results with the laid down plan in the implementation of ERP system. The budget will be necessary for authorization of expenditures, communication of objectives of ERP system and controlling various operations while the system is being implemented. From the beginning, the aim is to get the backing if the whole company for the budget to ensure that the budgetary requirements for the implementation are met. This is a large undertaking that involves a single system that will serve the needs of the entire firm, and the decisiveness of the leaders in various departments is very necessary. This is in consideration of the management’s concern with the amount of time the project would use and cost involved. A project of this magnitude requires large amount of resources, can easily spin out of control and at the end provide substandard results to the stakeholders. The technique for utilizing the budgetary tool will involve having all the departments commit the necessary resources to this project. The approach does not involve formally providing justification for the amount of costs to be incurred. Rather it involves institutionalizing the entire business model for all departments in the company. Being among the largest project to be allocated large amount of resources, the approach would work if the approval of all involved departments is achieved.

Timeline

The selection of consultant and the vendor and the presentation of the budget for approval are to take around 20 days. The timeline for the process is informed by the fact that the ERP system is large and has to be implemented within a short period, which includes the ability for it to adapt and even grow at the same time with Cisco business. The decisiveness of what is wanted of the project helped into setting the time for the selection process to be short. The various activities in the implementation process were to take place within the stipulated time so that to avoid any variance in terms of costs, which is likely to arise from the additional, labor costs and other related expenses. To ensure that the cost does exceed the limits established in the budgetary tool, the timeline for the implantation of the entire project has to be adhered to. In addition, the team members have to be introduced to the implementation approaches within with the 20 days to the project so that can become acquainted with their tasks and how they are to accomplish them. This is an important step in the implementation process since all the team members will play a key role in the implementation of the process and hence, have to be aware of the strategies to be used. In addition, a two week period was set for the purpose of training the whole team involved in the implementation of the system.

Training requirements

The success of implantation process is will be determined by the competences of the personnel of the company who will use it in daily operations. Therefore, the training of the users will have to be done right before the implementation as specified in the training plan. This approach ensures that there is a reduction of any chance that there will be unnecessary rushing of the training. The training requires setting up of the implementation’s technical environment. The training process involves taking the team members through 2 days thorough training on the ERP and employing them to analyze the system. The training will have to include instilling risk management skills so that team members can manage any arising risks. A user-centric strategy in training is, therefore, needed for the project to be successful.

Assumptions

 The various assumptions in the implementation process is that consultant and vendor will be true to the agreement in the contract and that the whole team in Cisco will be receptive of the new system.  Moreover, it’s assumed that the entire project will be completed at the expected cost and timeline.

Lessons learnt

The success of a project especially in the implantation stage can be attributed to various factors that, when fall into place, the process is duly completed. These factors include timing and access to the required resources. It is important for the project manager to seek the support of all the individuals in the organization whose tasks will be affected by the implementation of the project (Happy, 2010). The establishment of a strong relationship between various teams and the availability of required resources together with training result to a good timing.

References

Happy, R. (2010). Project 2010 Project Management: Real World Skills for Certification and Beyond (Exam 70-178). John Wiley & Sons.

 

Collins, M. J. (2010). Pro project management with SharePoint 2010. Berkeley, Calif.: Apress.7-15

Austin, R. D., Nolan, R. L., & Cotteleer, M. J. (2002). Cisco Systems, Inc: Implementing ERP. Boston: Harvard Business School.