Cisco Systems Inc Implementing Erp Case

8760 Words Feb 20th, 2013 36 Pages
9-699-022
REV: MAY 6, 2002

ROBERT D. AUSTIN RICHARD L. NOLAN MARK J. COTTELEER

Cisco Systems, Inc.: Implementing ERP
Pete Solvik, Cisco Systems chief information officer (CIO), considered the last remaining line item of his ERP (Enterprise Resource Planning) implementation budget. Cisco had a history of rewarding performance with cash bonuses, but the amount allocated for rewarding the ERP team, over $200,000, was unprecedented. To be sure, they had delivered a lot in a time frame that no one had believed possible. It had not been easy either. The team members, Solvik included, had taken a risk in joining the project. Rewards should, and would, be generous. The size of the bonus pool, though, made Solvik think: they had done well, but
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Morgridge believed that many Silicon Valley firms decentralized too quickly and did not appreciate the proven ability of the functional organization to grow without sacrificing control. Accordingly, Morgridge maintained a centralized functional organization. While Product Marketing and R&D were decentralized into three “Lines of Business” (Enterprise, Small/Medium Business, and Service Provider), the manufacturing, customer support, finance, human resources, IT, and sales organizations remained centralized.

History of IT at Cisco
Pete Solvik joined Cisco in January 1993 as the company’s CIO. At the time, Cisco was a $500 million company running a UNIX-based software package to support its core transaction processing. The functional areas supported by the package included financial, manufacturing, and order entry systems. Cisco was “far and away” the biggest customer of the software vendor that supported the application.3 Solvik’s experience and the company’s significant growth prospects convinced him that Cisco needed a change. We wanted to grow to $5 billion-plus. The application didn't provide the degree of redundancy, reliability, and maintainability we needed. We weren't able to make changes to the application to meet our business needs anymore. It had become too much spaghetti, too customized. The software vendor did offer [an upgraded version], but when we looked at it we thought

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