Overall, Cisco was a huge success with ERP due to their ability to make efficient decisions and top-notch project management. The following are the things Cisco performed correctly to ensure the success of the ERP project. To begin, Cisco recognized the importance of replacing outdated systems with a single integrated solution in order to make faster judgments (Austin et al., 2002). This step would facilitate coordination and help to avoid project management overlaps. Furthermore, Cisco engaged both their IT team and the business community in ERP (Kumar & Thapliyal, 2010). Their collaboration meant that the business community had the opportunity to give feedback before the ERP project was completed, and this feedback played a key role in enabling the IT people to identify and correct problems early enough before the ERP project was integrated into the business processes.
Another wise decision taken by Cisco was choosing KPMG as their vendor who assisted the company in the selection and implementation of the ERP (Austin et al., 2002). Cisco leveraged on the knowledge and competence of KPMG to integrate the ERP system with the entire business processes. Besides, KPMG had talented experts who were dedicated not only in the financial gains paid by Cisco but who also viewed this as an opportunity to put their best foot forward and deliver extra ordinary results to the client. Besides, Cisco also involved Oracle as a vendor in this project, and this enabled the company to get an excellent deal from Cisco (Austin et al., 2002). By partnering with the best players in the market, Cisco increased its chances of success at ERP since it was dealing with firms that had previously dealt with many businesses and therefore had the resources, the competence, and the talent to ensure successful completion of the ERP project. The partnership between Cisco and KPMG led to a strong team composed of business leaders, KPMG consultants and Cisco and KPMG business process managers (Kumar & Thapliyal, 2010). The partnership also bore a steering committee that ensured that there was optimal cooperation between the two business partners. The cooperation and well-coordinated activities of these two business partners acted in favor of Cisco ERP project.
Ultimately, the cooperation of KPMG and Cisco bore fruits since the two companies were able to complete all the CRP objectives related to each of them. Even when things did not go their way, the two teams worked together to resolve problems within the stipulated deadlines. Despite encountering a few changes in scope, the Cisco team put extra effort and remained focused and on track all the way to the end (Austin et al., 2002). After cut over, Cisco briefly experienced a few issues with ERP due to various mistakes they made while testing the system. However, KPMG and Oracle helped them out, and within a short time, they were able to stabilize the system.
The impact of the board of directors on the strategic decisions of a company cannot be underrated. Therefore, the management at Cisco was able to convince the board of directors to approve ERP implementation at the Company (Kumar & Thapliyal, 2010). It is worth noting that without the board's approval, the ERP implementation at Cisco would have remained a dream. Therefore, it took creative persuasion by the top management to convince the board that implementation of ERP would result in greater operational efficiency and increased profitability.
Cisco also avoided phased implementation by preferring a one-time overall ERP implementation (Austin et al., 2002). A phased implementation could have created a major disruption of operations at the company and would not get the company to the desired state. Therefore, Cisco's decision of avoiding phased implementation acted in favor of the company, and this greatly influenced the success of ERP implementation. Besides, the company created a sense of importance and urgency around the ERP implementation project, and this motivated the team who felt they were doing something greater than themselves (Kumar & Thapliyal, 2010). This level of motivation created synergy among the team members, and therefore everyone was psyched towards achieving a common goal. This level of cooperation was vital for the success of ERP implementation because, despite great plans and systems, one needs a dedicated team to implement such an ambitious plan.
To keep implementation costs in check, Cisco signed a contract with the hardware suppliers based on committed capacity and not on the amount of hardware (Austin et al., 2002). Therefore, when additional hardware was required to handle extra capacity, Cisco did not have to pay for it. The software's vendor had to deal with his under sizing mistakes. This ingenious contract helped Cisco to keep costs of ERP implementation in check, and this played a key role in the successful implementation of the ERP system at Cisco.
Through the cooperation, diligence and hard work of all the teams involved, Cisco was finally able to accomplish the $ 15 Million project within 9 months.
Did Cisco do Anything Wrong on this Project
Despite the success of ERP implementation at Cisco, the company made several mistakes that are worth discussing. For instance, Cisco made a mistake during implementation phase by failing to test the system with the full load (Austin et al., 2002). During the testing phase, Cisco ran individual processes in sequences instead of at the same time. Besides, Cisco only used a part of the database during the testing phase and therefore failed to conduct a fully-fledged system test (Austin et al., 2002). Therefore, they were not able to know the capability of the ERP system, and as it finally turned out, the system was not yet fully prepared to take on the variety of tasks that Cisco had anticipated it would perform. Cisco should have performed a feasibility test on all the individual activities it wanted the ERP system to handle, and this would have enabled the company to seal the loopholes before it rolled out the project on a full scale (Austin et al., 2002). The mishap of Cisco not testing the ERP capacity illustrates that the company was not willing to make any adjustments at all and this was the greatest mistake since it is very unlikely that a big company like Cisco would not modify a business process to fit their operations and business model.
Besides, Cisco failed to design the ERP system to handle its full load. This meant that the capability of the ERP system did not match to the needs of Cisco Company (Austin et al., 2002). It is no wonder that upon the full load, the ERP system at Cisco was unable to handle the individual tasks and it took the intervention of Oracle and KPMG to achieve full operability of the system. A business ought to customize a business process to meet the intricacies of that business, and therefore failure to do so usually leaves the business process vulnerable to failure since it may not achieve the intended results of increasing operational efficiency and coordination in the firm (Shatat, 2015). This is the scenario that was experienced at Cisco when the ERP system was unable to handle the full load of the tasks and activities at the company. Cisco should have customized the ERP system to meet its unique activities.
Also, Cisco had failed to prepare adequately for the full-scale implementation of the ERP system. The IT team at Cisco was not properly prepared to fully adopt the ERP system, and this is why the IT department at the company had to deal with the technical problems resulting from the new system (Austin et al., 2002). This happened especially during the early stages of the ERP implementation when the system had not yet stabilized, and thereby system failures were experienced from time to time (Shatat, 2015). Especially due to the short time allocated for the project, it is undeniable that the team members were usually stressed as everyone was asked to work harder than they used to deliver the project on time.
How Cisco Mitigated Risks in the ERP Project
Cisco's ERP implementation was a grand scheme and should it have failed; it would have left the company shaken both financially and reputation wise. Therefore, the company used several strategies to mitigate risks that were inherent in this project. To start with, the company was aware that they were short of time and therefore put 16 hours a day towards the project to ensure that the implementation of the project did not lag behind at any cost (Austin et al., 2002). This strategy ensured that the ERP Projects implementation remained on course and that the deadline would be hit no matter what. Also, the company mitigated the risks by engaging KPMG and Oracle as vendors, and this allowed the company to leverage on the knowledge of these two market leaders to rapidly implement and run the ERP system. Even when the ERP could not take a full load of activities at Cisco, Oracle and KPMG worked day and night to stabilize the performance and functionality of the ERP program (Austin et al., 2002). Therefore, by using KPMG, the company was able to utilize the organizational competencies its partners and this played a key role in the overall success of the ERP project. Besides, the Steering Committee ensured that there was coordination among the three business partners and this ensured that all the teams from the three companies were working towards a shared goal and this was crucial in ensuring that there was no wastage of time or resources in activities that were not related to the main project.
The morale and the synergy of employees at Cisco during this time were super, and this was also a mitigation strategy since the dedication and the cooperation among employees were so strong that they could not tolerate seeing things go wrong. Getting people committed to a cause is difficult, but when it finally happens, it allows moving faster towards set goals since people are working as a team to achieve a shared goal (Shatat, 2015). The top management also realized that their support was paramount towards the successful implementation of the project and therefore it supported the IT team wholeheartedly. The top management plays a key role in determining the success or failure of a project due to their strategic decisions and therefore could be an impediment to successful completion of a project (Austin et al., 2002). Therefore, by fully supporting the IT department, the top management reduced the chances of failure of the project.
Another mitigation strategy is that Cisco contract on the supply of hardware was based on capacity and not on the number of hardware's required (Austin et al., 2002). This was important as it helped the company to eliminate increasing cost of implementation and this played an essential role in the eventual success of the ERP. Increasing costs is one of the inherent risks that face many projects and therefore mitigating against this problem increases the chances of success of the project.
Whether Cisco was Smart or Lucky with its ERP Implementation
When the Cisco team and their partners finally delivered the project on time, Solvic wondered where the team had been smart and where it had been lucky. Therefore, it is a clear indication that the success of ERP implementation at Cisco was a mixture of smartness and luck. The decision by managers at Cisco to implement the ERP was sheer smartness, and it illustrated a willingness to embrace changes (Hota, 2012). If the managers had not decided to implement the ERP system at Cisco, then it is undeniable that there would have been no ERP implementation at the company. Strategic decisions determine the projects that a company undertakes to increase its competitive advantage and operational efficiency. Therefore, it takes smart brains to make effective decisions that place the organization in a place where it is able to reduce the costs of production and sustain a competitive advantage. Besides, the managers at Cisco were particular on the business partners who they would welcome on board to achieve their ambitious plan (Austin et al., 2002). Business partners affect the success of a business project in a significant way and therefore having dedicated partners is one of the greatest assets any business could have while implementing its projects. Therefore, it takes wits to select the right business partners and this was illustrated by Cisco when it selected Oracle and KPMG as its business partners. KPMG and Oracle played a significant role in the successful implementation of the ERP system at Cisco, and without them, the project would have failed. The Conference Room Pilots applied by the Cisco team during implementation enabled better control and on-time completion of the project (Austin et al., 2002). Due to the hierarchical nature of many organizations, strategic alliance efforts are not usually successful. However, having a team that comes between the partners to promote focus and interests on the shared goal increases the chances of success of the project. This is the role the steering committee at Cisco was playing, and it is worth emphasizing that it requires wits and smarts to select the right people for a steering committee.
It is also notable that luck played a part in the successful implementation of ERP at Cisco. For instance, it is plain luck that Cisco did not suffer from an accident which could have derailed the implementation plan. Despite good plans and mitigation strategies, sometimes accidents one had not foreseen happens and this greatly affects the effective implementation of a plan. Therefore, the absence of any form of accidents during ERP implementation at Cisco can only be described as sheer luck (Hota, 2012). Cisco was also lucky to have hard and smart working team who did not stop at anything until they got things done. The efforts of a great team were coupled by a great steering committee that coordinated the activities of all business partners. One may argue that Cisco had recruited a great team but then sustaining focus and goodwill among team members is not easy, and it takes a mixture of effort and luck.
References
Austin, R. D., Nolan, R. L., & Cotteleer, M. J. (2002). Cisco Systems, Inc: Implementing ERP. Boston: Harvard Business School.
Hota, J. (2012). Implementation of ERP SaaS option for HRIS reporting practices. Browser Download This Paper.
Kumar, P., & Thapliyal, M. P. (2010). Successful implementation of ERP in a large organization. International Journal of Engineering Science and Technology, 2(7), 3218-3224.
Shatat, A. S. (2015). Critical success factors in enterprise resource planning (ERP) system implementation: An exploratory study in Oman. Electronic Journal of Information Systems Evaluation, 18(1), 55-89.
Austin, R. D., Nolan, R. L., & Cotteleer, M. J. (2002). Cisco Systems, Inc.:Implementation ERP. Harvard Business School.
