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? What is so different about ERP and Enterprise systems that make other managers wary of this project?

Question

Abraham Valencia

Business

6 February, 05:31

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? What is so different about ERP and Enterprise systems that make other managers wary of this project?

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Brando · Answer 1

When Peter Solvik joined Cisco in January 1993 as the company's CIO, Cisco was a $500 million company running a UNIX-based software package to support its core transaction processing, including financial, manufacturing, and order entry systems. At that time, Cisco was experiencing significant growth. However, the application didn't provide the degree of redundancy, reliability, and maintainability that Cisco needed to meet the business requirements anymore. The current systems may be good for $300 million companies, but they were not suitable for a $1 billion dollar company. Solvik let each functional area make its own decision regarding the application and timing of its move, but all functional areas were required to use common architecture and databases. However, in the following years, the functional area were facing dilemma. Anything Cisco did would just run over the legacy systems. It turned into an effort to constantly band-aid the existing systems. So the systems replacement difficulties of functional areas perpetuated the deterioration of Cisco's legacy environment. System outages became routines. Finally, in January of 1994, Cisco's legacy environment failed. As a result, the company was largely shut down for two days.

Why were no managers eager to take on this project?

Because if Cisco wanted to replace the existing legacy systems, the system in each functional areas had to make change accordingly. Take manufacturing for example, if manufacturing wanted to spend $5 or $6 million dollars to buy a package and by the way it will take a year or more to get it. It was too much to justify. Therefore, none of managers was going to throw out the legacies and do something big. In a word, because implementation a new system would cost a lot of money and take long time to be realized, no one was individually going to go out and buy a package.