Cisco System Architecture: ERP and Web-enabled IT Essay
Cisco System Inc. is the leading company in the computer communications and networking industry. It became a public company since 1990, was founded in 1984 by two Stanford computer scientists, and the core business began with multi-protocol routers. It later continued to dominate the “Internetworking” market, which in turn reflected in its first year on Fortune 5000 in 1997 and its market capitalization passed $100 billion in 14 years’ establishment. Once John Chambers became CEO in 1995, he noticed the signals of accelerated trend of transmitting three independent phone network, data network and broadcast network into one integrated IP-based network. So he continued to execute 4 elements plan, which are
1) broad product line
2) systematize acquisition
3) set industry software standards for networking
4) choose the right partners. In consistent of goals, when Pete Solvik became CIO, in order to build Cisco’s IT infrastructure, he repositioned IT department internally and also work with KPMG as an integration partner in helping of choosing Oracle and implementing ERP project. The completion of the IP-based architecture also provided the foundation of web-enablement. Cisco developed both Intranet and Internet application involved business partners, suppliers, customers and also employees. Over the years, it increased customer satisfaction, shareholder values
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Cisco is fundamentally different from other Industrial-Age Companies; it has several factors that define itself as Information-Age Company. First of all, it has a different business interaction process. The web-enabled Intranet and Internet interface allow interactions with customers, business partners, employees and suppliers, who can navigate to the information needed and contribute directly to do business in hence to enrich the knowledge database. This efficiently and effectively encouraged the interactions among both internal and external parties compared to industrial age company. Secondly, Information-age Company distributes and communicates
information more easily. For example, Cisco Employee Connection (CEC) provided centralized access to the resources and tools required to encourage knowledge sharing and increase employee productivity. In addition, the Distance-Learning functionality not only provide a tool for employees to facilitate the learning process but also allows Cisco to easily track the progress and effectiveness of its employee’s learning level. Thirdly, E-commence concept heavily invested with customers. Cisco’s 92% of revenue generated from e-commerce site which was accessed nearly 3.8million times monthly by 600,00 registered users in 2001. A traditional industry-age company would not be able to compete in this business channel.
Cisco’s ERP solution replaced the legacy system, totally optimized the way of company and industry operates. After its implementation, Cisco’s IP based IT architecture, provided a cost-effective, more flexible and more scalable acquisition process to quickly and efficiently eliminate non-standard business process. There was a specific team that would help to eliminate non-standard technology, and specialized in integrating process. Cisco successfully completed an acquisition within 60 days with a cost less than $1million, and still continued to commit to remove barriers that affect the whole process. It matched to one of the elements that CEO Chambers mentioned, to build a systematize acquisition process to be more efficient. ERP process helped to achieve that particular goal.
The successful implementation of ERP project provided the groundwork for Cisco’s next phase of strategy – Web-enabled Intranet and Internet. Cisco increased its reliance on IT across different business areas including e-commerce, supply-chain management, employee self-service, e-learning application and customer relationship management, executive information systems (EIS) and decision support system (DSS). For the internal application, employees can facilitate data exchange by accessing the CEC intranet, which maximize employee productivity. Employees also had their version of personalized home page, which was also the platform that they would communicate easily. For the external application, faster responses are provided to customers to ensure high standard services are delivered to maintain satisfaction, not only reflected in the faster shipping process but
also the critical account list communicate problems with senior staff members. Therefore customers can obtain the smooth online order support from the system, as well as the satisfaction of less turnover time if thing goes wrong. Furthermore, Cisco also maintained an efficient Supply-Chain by outsourcing its manufacturing but only performing testing. All of those web-enabled solutions collaborate together to let Cisco operate profitably and stay competitive.
Overall, Cisco’s IT infrastructure support its business strategy and operations, it also increased the efficiency of using information across all different business functions.
Pete Solvik, as CIO, his responsibility was to ensure the implementation of IT was efficient and the integration of IT systems was effective. After he joined Cisco, he concluded the two challenges that he was facing, which were “too traditional and too internally oriented”, and current system was not robust enough to fit Cisco’s growth. Therefore, Solvik reacted immediately to address the first challenge and meanwhile a crash of legacy system for two days allowed Cisco’s top management to decide the change of new ERP system. Furthermore, his firmed decision of taken faster action, as a result, designed a large-scale project in terms of size and cost. He also quickly assembled Cisco’s team with skilled employees and collaborated with the integration expert KPMG to select the ERP vendor and also the implementation of future IT infrastructure. Then he successfully convinced the board to approve their proposal and transformed the legacy system into the new infrastructure within the designed time frame. He had to work closely both with executive team to report the progress of project, and field expertise to understand any obstacles they were facing. He played a vital role in terms of designing and implementation as well as monitoring IT infrastructure in Cisco. As a CIO, Solvik refined the needs of IT infrastructure, encouraged collaborations between business units and eventually increase business operation effectiveness.