ISOM825 Enterprise Data Management
Céline Pahl
Feb 2023
Cisco Case Study Assignment
1. At the start of the case, Cisco’s information Systems are failing, yet no one
steps forward to lead the effort to replace them. Why is this? Why were no
managers eager to take on this project?
-
-
-
-
Management did not give the go for someone to take on a company-wide
project: One of the reasons, no single manager volunteered to take on the task
at first, is that Cisco’s CIO (Pete Solvik) was originally set on avoiding an
ERP solution. He felt that budget and IT expenditures should be made by
every functional area individually while IT organization would report directly
to him.
None of the leaders involved in the “by-function-approach” turned out to
be successful: Pete Solvic decided to let each function decide on their own
what application they would opt for and when they would implement it. They
did however need to decide on a common architecture and database. The
execution was fragmented and unsuccessful. Instead of coming up with viable
and strategic solutions that would solve the issues in the long-run, functions
opted for short-term “band-aid” fixes. Everyone came up with separate
decisions and no one actually went out to buy a package.
Before Cisco’s legacy environment failure, the urgency for someone to
take on the project, was not as obvious. It was only after, the major
technical shortcoming that Cisco’s management team realized how
desperately a unified strategic change was needed.
Everyone in the company continuously voiced their concerns about the
size and difficulties, related to the project. They knew that they would not
one to opt for a phased adaption and were well aware of the financial and
personnel cost necessary for implementation. Executives were worried that a
project of this size would spin off and deliver unsatisfying results.
2. Cisco was highly successful with its enterprise resource planning (ERP)
effort. What accounts for this success? What were the most important things
that Cisco did correctly?
-
-
They got management on board. The board and Morridge did not only give
the project a “go” but were fully engaged through the different stages of
implementation. The project had a steering board of high-ranking executives
overseeing the project. They ensured the project’s continual visibility,
sponsorship, and team motivation. Even after implementation, solving initial
difficulties was the number one agenda on executive staff meetings.
They made the ERP adaption priority. Morridge made sure that the entire
company knew the project was priority and was informed about what was
1
ISOM825 Enterprise Data Management
Céline Pahl
Feb 2023
-
-
-
-
-
-
happening. As a matter of fact, the project was one of the company’s top 7
goals of the year.
They realized that an ERP which effectively fills their business needs
would need heavy involvement from a broad range of people in the
business community. Successful implementation of an ERP system cannot be
attributed to the IT department alone. Instead, for an ERP system to
effectively execute business processes and store data, many minds in an
organization must come together to clearly define what the system ought to
and ought not to do. In Cisco’s case, five tracks from different branches in the
business ensured that all the relevant business know-how would influence the
final ERP structure.
They got the best people on board. Team members were handpicked and
only the best and the brightest became part of the project.
Cisco made team-based decisions and got the employees lean-in on the
project. The choice, of which ERP system they were going to use, for one,
was team based. Every team member saw this project as THE opportunity to
advance their career. As a result, people were highly motivated, gave the
project their utmost attention and worked over-time.
Cisco was also successful because they integrated strategic partners early
in the project. From the get-go, their strategy was to leverage the
knowledge and experience of others. KPMG came on early in the project to
facilitate Cisco’s move to an ERP system. They put together a team of
seasoned experts that had already accumulated actual professional experience
working with ERP systems. As Cisco’s integration partner, they helped not
only to select but also to implement the ERP system they finally opted for.
Moreover, KPMG supported Cisco with initial difficulties that arose
immediately after implementation. Cisco made sure to question other
companies about their experiences using various ERP systems and worked
closely with Oracle’s consultants throughout the entire process. KPMG and
Oracle executives were also part of the project’s steering board.
Cisco planned the project out and allocated the necessary time, budget,
and personnel to execute it. While there may have been some miscalculation
and (as with any other project of this scope) things did turn out to be more
complicated, longer, and more expensive than anticipated, they planned out
the process out from the get-go and were aware of the resources that would
need to be allocated and opportunity cost that would be incurred because of
the project. While they put in due diligence to plan the steps ahead, they also
made sure to not overanalyze their needs and stick to the timeline.
Cisco understood the urgency of ERP implementation and focused on the
potential the system would have in the future, instead of the difficulties it
posed in the present. Hitting their $5 billion target would exclusively be
possible if they built a data-base and process-system able to facilitate the
growth.
Cisco quickly adapted to changes during the project and didn’t let
setbacks get the best of them. While they did not plan for customization at
2
ISOM825 Enterprise Data Management
Céline Pahl
Feb 2023
Cisco Case Study Assignment
1. At the start of the case, Cisco’s information Systems are failing, yet no one
steps forward to lead the effort to replace them. Why is this? Why were no
managers eager to take on this project?
-
-
-
-
Management did not give the go for someone to take on a company-wide
project: One of the reasons, no single manager volunteered to take on the task
at first, is that Cisco’s CIO (Pete Solvik) was originally set on avoiding an
ERP solution. He felt that budget and IT expenditures should be made by
every functional area individually while IT organization would report directly
to him.
None of the leaders involved in the “by-function-approach” turned out to
be successful: Pete Solvic decided to let each function decide on their own
what application they would opt for and when they would implement it. They
did however need to decide on a common architecture and database. The
execution was fragmented and unsuccessful. Instead of coming up with viable
and strategic solutions that would solve the issues in the long-run, functions
opted for short-term “band-aid” fixes. Everyone came up with separate
decisions and no one actually went out to buy a package.
Before Cisco’s legacy environment failure, the urgency for someone to
take on the project, was not as obvious. It was only after, the major
technical shortcoming that Cisco’s management team realized how
desperately a unified strategic change was needed.
Everyone in the company continuously voiced their concerns about the
size and difficulties, related to the project. They knew that they would not
one to opt for a phased adaption and were well aware of the financial and
personnel cost necessary for implementation. Executives were worried that a
project of this size would spin off and deliver unsatisfying results.
2. Cisco was highly successful with its enterprise resource planning (ERP)
effort. What accounts for this success? What were the most important things
that Cisco did correctly?
-
-
They got management on board. The board and Morridge did not only give
the project a “go” but were fully engaged through the different stages of
implementation. The project had a steering board of high-ranking executives
overseeing the project. They ensured the project’s continual visibility,
sponsorship, and team motivation. Even after implementation, solving initial
difficulties was the number one agenda on executive staff meetings.
They made the ERP adaption priority. Morridge made sure that the entire
company knew the project was priority and was informed about what was
1
ISOM825 Enterprise Data Management
Céline Pahl
Feb 2023
-
-
-
-
-
-
happening. As a matter of fact, the project was one of the company’s top 7
goals of the year.
They realized that an ERP which effectively fills their business needs
would need heavy involvement from a broad range of people in the
business community. Successful implementation of an ERP system cannot be
attributed to the IT department alone. Instead, for an ERP system to
effectively execute business processes and store data, many minds in an
organization must come together to clearly define what the system ought to
and ought not to do. In Cisco’s case, five tracks from different branches in the
business ensured that all the relevant business know-how would influence the
final ERP structure.
They got the best people on board. Team members were handpicked and
only the best and the brightest became part of the project.
Cisco made team-based decisions and got the employees lean-in on the
project. The choice, of which ERP system they were going to use, for one,
was team based. Every team member saw this project as THE opportunity to
advance their career. As a result, people were highly motivated, gave the
project their utmost attention and worked over-time.
Cisco was also successful because they integrated strategic partners early
in the project. From the get-go, their strategy was to leverage the
knowledge and experience of others. KPMG came on early in the project to
facilitate Cisco’s move to an ERP system. They put together a team of
seasoned experts that had already accumulated actual professional experience
working with ERP systems. As Cisco’s integration partner, they helped not
only to select but also to implement the ERP system they finally opted for.
Moreover, KPMG supported Cisco with initial difficulties that arose
immediately after implementation. Cisco made sure to question other
companies about their experiences using various ERP systems and worked
closely with Oracle’s consultants throughout the entire process. KPMG and
Oracle executives were also part of the project’s steering board.
Cisco planned the project out and allocated the necessary time, budget,
and personnel to execute it. While there may have been some miscalculation
and (as with any other project of this scope) things did turn out to be more
complicated, longer, and more expensive than anticipated, they planned out
the process out from the get-go and were aware of the resources that would
need to be allocated and opportunity cost that would be incurred because of
the project. While they put in due diligence to plan the steps ahead, they also
made sure to not overanalyze their needs and stick to the timeline.
Cisco understood the urgency of ERP implementation and focused on the
potential the system would have in the future, instead of the difficulties it
posed in the present. Hitting their $5 billion target would exclusively be
possible if they built a data-base and process-system able to facilitate the
growth.
Cisco quickly adapted to changes during the project and didn’t let
setbacks get the best of them. While they did not plan for customization at
2
ISOM825 Enterprise Data Management
Céline Pahl
Feb 2023
-
first, they quickly adapted their project plan, when they realized that they
could not go without. While the “going live” of the ERP caused a wormhole
of difficulties in the first week, the project team put all hands-on deck to solve
them in a timely manner.
Cisco took the chance to sort and re-arrange their data. Throughout the
process, Cisco created the capability to report historical and future in an
integrated data conversion in a single data warehouse.
3. Did Cisco do anything wrong on this project? If so, what?
While Cisco did an exemplary job in ERP implementation, there are a few things
that can be learnt for the future.
-
-
-
They underestimated the need for implementation. Cisco had complex
systems, processes, and data structures impossible to be addressed in a
standardized ERP. Planning for customization from the start, would have
saved them resources and trouble. At the end the project included major
customization and a sale support package.
They only realized that they would need a single “data warehouse” for
effective communication, after the project had already been rolled out. As
a result, the entire IT department had to put all other things aside and commit
to the ERP project only.
The hardware architecture and size were deficient. What they had done
well here, however, is to purchase equipment based on capability. The
additional cost, thus, was incurred by the vendor and not Cisco.
They did not test the system with big enough databases. As a result, the
new ERP, crashed at least once a day in the beginning.
4. We often hear that senior management commitment is important for projects
like Cisco’s ERP implementation, but senior management commitment to do
what? What can top managers do to maximize chances for success here?
Senior management involvement is essential for ERP adaption for several
reasons. ERP is a strategic and structural change that affects the entire company.
This Cisco case study depicts how single functions (prior to Cisco’s companywide ERP decision) can only solve fragmented problems with short-term
solutions. The necessary resources and personnel to realize the move, can only be
set aside for the project by the management and board itself. Moreover, an ERP
adaptation can only be successful if it is continuously backed and supervised by
high-ranking executives. They must at all times, ensure the visibility of the
project, realignment with corporate strategy and team’s motivation.
5. Cisco went live with ERP in a big-bang fashion, which is inherently risky.
How did Cisco mitigate this risk?
3
ISOM825 Enterprise Data Management
Céline Pahl
Feb 2023
Cisco mitigated the risk, by doing their due diligence prior to going live. They made
sure to make an informed decision on which ERP product to choose, set aside time
and the relevant people to design the process and data systems, cleaned up their data
and tested the system. They also prepared the necessary resources to solve the many
problems that did in fact arise, such as IT personnel and external consultants. The bigbang change was not only supported by the staff, but also the management itself,
making the ERP adaptation a first priority agenda in every one of their meetings.
Lastly, they moved some of the financial risk on other vendors, by holding them
accountable to the functionality and capacity of the products sold, rather the quantity.
4
ISOM825 Enterprise Data Management
Céline Pahl
Jan 23
Case Study: The Diet Center: The SAP ERP Decision
Specific organizational and operational challenges faced by DC
-
-
-
DC operates through a functionally managed business model with very poor
communication between departments. DC’s reporting line is untransparent and
responsibilities among managers are blurred. An overwhelming number of business
functions directly report to Wazzan and her husband. Wazzan and her husband also
delegated tasks and decision-making power to managers, which are formally outside of
their job description and expertise.
While the couple rigorously plans all aspects around the company’s services and
products the business side of things is largely ignored. There seems to little awareness
around the importance of internal governance, standard procedures, and policy
implementation. As a result, DC’s processes are untransparent and ineffective.
The company’s (financial) data is largely not reported for, unstructured or not fully
consolidated. While DC has implemented as much as four independent softwares to keep
track of the company’s main departments’ (financial) data, there are no real-time
financial data and reports to base analytical decision-making off. To make things worse,
the independent softwares cannot or do not communicate with one another. This results in
operational inefficiencies leading to excessive and unnecessary daily operational costs.
More generally speaking, there seems to be little financial literacy and poor bargaining at
DC.
Macro-environmental and cultural situation in Lebanon and association with DC’s
challenges
-
-
Ongoing post-war conflict and various major national setbacks (assassination of the
Prime minister, Israeli invasion, large influx of refugees, economic crisis of 2012) is
keeping the Lebanon unstable. Moreover, the countries small size and lack of stable
basic infrastructure makes internal business difficult. The country’s GDP is low and
political unrest and inflation are slowing growth.
As of 2008, Lebanon’s obesity rate was 27.4% and growing leading to the
development of a weight loss management industry in Lebanon and beyond. While
1
ISOM825 Enterprise Data Management
Céline Pahl
Jan 23
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DC owned a lot of the weight loss industry’s market share in the beginning, competition
is growing rapidly, significantly affecting DC’s bottom line.
In 2015, the Ministry of Health in Lebanon unveiled wide non-compliance to
security norms among many F&B and food outlets in the country. It is likely that DC
will be affected by the many new laws on food safety, licenses, and authorizations, which
they will need monitor and account for.
As a result of both DC’s organizational and operational challenges as well as Lebanon’s macroenvironmental and cultural situation, the company is incurring high operation cost, excessive
waste, and an unsuccessful bottom line.
The two most important factors to consider before DC adopts an ERP system, risks and
challenges that may arise during implementation and possible solutions
Factors to
Consider
An ERP
system
imposes its
own logic on a
company’s
strategy and
culture
Risks and Challenges
Possible Solution
DC may not be ready to implement
ERP just yet. Their hierarchy is
functional, processes are
inefficient, and culture is
untransparent. A sudden
implementation of an ERP system
may superimpose cultural and
organizational structures (push
towards full integration and generic
processes). While both could well
result in significant reduction of
cost and improvement of
efficiency, the abrupt turnaround
may be too much for DC’s
management and team to handle.
I recommend that DC makes a thorough
internal analysis of their organizational
structures and process flows prior to
ERP implementation. Formulating
strategic solutions on how organizational
structure, reporting lines and processes
should best be arranged before
implementing ERP, will allow them to
determine their non-negotiables and
value proposition as a company and gain
a better understanding of their ERP
needs. A phased implementation (rather
than a “big bang” approach) will ease the
significant organizational and cultural
changes and allow DC’s staff to
accommodate to the new processes more
easily.
2
ISOM825 Enterprise Data Management
Céline Pahl
Jan 23
Implementing
an ERP system
is very costly
and lengthy.
In some cases, not having an ERP
might even result in a competitive
advantage for another firm.
Moreover, the figure spent on the
actual system itself is likely to be
doubled, when you consider the
consulting cost associated with it.
While implementing SAP would
save DC significant costs and
personnel resources associated with
poor process management, DC’s
current slim profit margin, might
not be enough to sustain SAP’s
lengthy implementation potentially
leading to bankruptcy.
While adapting a less customized version
of SAP would require a lot more
organizational and process adaptation in
their organization, DC is likely to save
money on a more standardized ERP.
While the alternative local system
(Noria), may not be as appealing to
Wazzan at first, the price difference may
make it worthwhile to consider.
Regardless of which ERP version the
company choses, they must make sure to
generously budget for both the capital
investment and personnel cost to support
the process over the next couple of years.
Sources
Naji Morkos, “New Flavors: The F&B Industry Sees Plenty of Room for Development in 2015,”
Executive Magazine, December 18, 2014.
Davenport, T. H. (2014, August 1). Putting the Enterprise Into the Enterprise System. Harvard
Business Review. Retrieved January 26, 2023, from https://hbr.org/1998/07/putting-theenterprise-into-the-enterprise-system
El Haij Sana, “The Diet Center: The SAP ERP Decision,” Harvard Business Review, May 9,
2018.
3
ISOM825 Enterprise Data Management
Céline Pahl
Feb 2023
-
first, they quickly adapted their project plan, when they realized that they
could not go without. While the “going live” of the ERP caused a wormhole
of difficulties in the first week, the project team put all hands-on deck to solve
them in a timely manner.
Cisco took the chance to sort and re-arrange their data. Throughout the
process, Cisco created the capability to report historical and future in an
integrated data conversion in a single data warehouse.
3. Did Cisco do anything wrong on this project? If so, what?
While Cisco did an exemplary job in ERP implementation, there are a few things
that can be learnt for the future.
-
-
-
They underestimated the need for implementation. Cisco had complex
systems, processes, and data structures impossible to be addressed in a
standardized ERP. Planning for customization from the start, would have
saved them resources and trouble. At the end the project included major
customization and a sale support package.
They only realized that they would need a single “data warehouse” for
effective communication, after the project had already been rolled out. As
a result, the entire IT department had to put all other things aside and commit
to the ERP project only.
The hardware architecture and size were deficient. What they had done
well here, however, is to purchase equipment based on capability. The
additional cost, thus, was incurred by the vendor and not Cisco.
They did not test the system with big enough databases. As a result, the
new ERP, crashed at least once a day in the beginning.
4. We often hear that senior management commitment is important for projects
like Cisco’s ERP implementation, but senior management commitment to do
what? What can top managers do to maximize chances for success here?
Senior management involvement is essential for ERP adaption for several
reasons. ERP is a strategic and structural change that affects the entire company.
This Cisco case study depicts how single functions (prior to Cisco’s companywide ERP decision) can only solve fragmented problems with short-term
solutions. The necessary resources and personnel to realize the move, can only be
set aside for the project by the management and board itself. Moreover, an ERP
adaptation can only be successful if it is continuously backed and supervised by
high-ranking executives. They must at all times, ensure the visibility of the
project, realignment with corporate strategy and team’s motivation.
5. Cisco went live with ERP in a big-bang fashion, which is inherently risky.
How did Cisco mitigate this risk?
3
ISOM825 Enterprise Data Management
Céline Pahl
Feb 2023
Cisco mitigated the risk, by doing their due diligence prior to going live. They made
sure to make an informed decision on which ERP product to choose, set aside time
and the relevant people to design the process and data systems, cleaned up their data
and tested the system. They also prepared the necessary resources to solve the many
problems that did in fact arise, such as IT personnel and external consultants. The bigbang change was not only supported by the staff, but also the management itself,
making the ERP adaptation a first priority agenda in every one of their meetings.
Lastly, they moved some of the financial risk on other vendors, by holding them
accountable to the functionality and capacity of the products sold, rather the quantity.
4