What factors had made the difference between the success and failure of the Cisco ERP project?
Management of resources within organizations is very critical in the financial and efficient performance of today’s biggest organizations, organizations like Cisco deal with very many variables in their day to day business activities, especially when interacting with consumers (Slack, Chambers, & Johnston 2010).
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When Cisco’s management discovered that they needed to grow and become a $5 billion-plus organization, it became clear that the current systems would not be reliable and dependable to do this. When the organization through various managers and the board initiated changes, there were a lot of worries that the project would not be entirely successful (Gasper 2005).
The success and failure of the Cisco ERP project depended on the resources that the top management and board of Cisco dedicated to the project. If monetary resources were few then the success of planning and implementation would have affected the success. The fact that a team of highly talented and bright 100 staff was assigned to the project is proof that the project would have failed if fewer personnel did the project.
The level of planning that was involved in the project was remarkable making it even much successful when the team decided to use a rapid iterative prototyping approach that split the overall task into incremental tasks known as (CRP) and conference room pilot, this enabled the workforce to become more analytical and deep in setting up the ERP system if the managers and supervisors did it any other way the project would have failed due to its complicated nature.
Cisco’s decision to work closely with KPMG and other partners such as Oracle through coordination and open communication enabled the ERP system’s successful implementation. KPMG’S role in the ERP project is commendable because their audit and close relationship with Cisco enabled the company to communicate to Cisco the precise requirements of the new ERP system thus defining the final success of the project.
Where had the team been “smart”?
Managers and organizations are expected to use their intelligence to make good business decisions that put their organizations at an advantage. When Cisco decided to maintain its relationship with KPMG up to the end of the implementation of the project, it was deemed as a smart move by managers of Cisco. Additionally, the selection process that led to the choice of Oracle was smart because it looked at factors such as long-term development, flexibility, and manufacturing capability of Oracle, this made sure the best vendor was chosen for the job.
With KPMG and Oracle close by, this meant that a continuous evaluation and assessment of the system which was being put in place by Oracle would simultaneously occur and that corrections would therefore be made in real-time. Furthermore, the decision to invite other experienced consultants such as the Gartner group meant that Cisco could therefore have a lot of assistance and ideas that could contribute to the final structure of the ERP system, this smart move ensured that the system could be customized to the specifications which Cisco wanted.
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Also, it was a smart move when Cisco’s management decided to create a pro-management team, create an ERP steering committee and acquire a lot of personnel to work on developing the project in multiple functional areas (Bunnell & Brate 2000). With all personnel put in place and all activities of developing the system being controlled from a centralized center, it ensured that the flow of communication was lean and streamlined to avoid duplication of tasks amongst the 100 staff who were working on developing the ERP system to the satisfaction of each functional area.
Cisco’s move to use its brightest brain’s in the project was also a smart move, this is because training such individuals who were known to be smartly increased the chances of success despite the hurdles they expected. The technique that was used to implement the project (rapid iterative prototyping approach) was a smart move that ensured that the overall implementation would be broken down into smaller incremental steps and that at the same time the trained personnel would thus have a chance to conduct a much more in-depth analysis of the ERP system during implementation during CRP0, CRP1, CRP2, and CRP3.
Where had the team been just plain lucky?
Business managers prefer making business decisions that are backed by facts and not dependent on luck. In this case Pete Solvic the programs CIO decided to use his gut feeling to face the board and place his argument in order for the project to be given a go-ahead. Although Tom Hubert the project manager considered it impossible for the Cisco team to complete the project in 15 months Solvic still believed that the project could be completed in 9months.
Additionally, instead of Solvic justifying the need for the project by using a formal business case that was backed by financial figures, he instead went ahead and based his argument on the basis of what initially triggered the need for changes. The team went ahead and argued that there was no need to tackle the ERP system issue using a cost approach but rather using the benefits that would arise out of its implementation.
Although the project succeeded within the dedicated timeframe and budget, this can be argued to be lack because Solvic’s argument and presentations were not solid enough and well planned. Cisco’s move to contact a hardware vendor and sign an unusual contract with a vendor based on performance capability rather than a specified configuration was also a lucky move that made it possible to change the hardware until the ERP system ran smoothly within the whole organization.
Do you think that the Cisco team could do such a project again if they had to? Why? Why not?
The environment has definitely changed and the current environment is not as same as the environment back then when Cisco decided to develop and implement an ERP system to replace its failed UNIX. With the same conditions, the failure or success of implementing another ERP system would be 50:50 because back then Cisco’s success depended on good planning and luck. Good managers are good planners and Cisco’s planning was good but the failure to integrate both formal business case planning that is financial in nature and only dwelling on what triggered the need for the ERP system is not enough. Good management planning systems usually take into consideration every variable affecting a project and incorporates in decision making (Slack, Chambers, & Johnston 2010).
If Cisco’s project managers conduct a complete SWAT analysis and PEST analysis and they are to carry out the same project, then their chances of success are more likely to be certain. If the company will most likely succeed the team should sit down together and create a Gantt chart for the project and proof financial statements then Cisco will definitely succeed in the project. The existence of good leadership and a bright team of 100 staff who are good at planning activities makes it easy for the company to effectively carry out its duties. Additionally, if the company teams up/partner up with the same partners who are dedicated such as KPMG and Oracle then Cisco will definitely succeed.
Bunnell, D., & Brate, A. (2000). Making the Cisco connection: the story behind the real Internet superpower. New Jersey: John Wiley and Sons.
Gasper, J.E. (2005). Introduction to Business. Natorp Boulevard: Cengage Learning.
Slack, N., Chambers, S., Johnstone, R. (2010) 6th Ed. Operations Management. Harlow: Pearson.