Week 6

Q.3 Can an informed ERP adoption and selection decision be made without fully understanding the problem? Why or why not – justify your answer.

The answer to this question is no, because it would be difficult to make a selection and adoption decision without having a fundamental understanding of the state of the organisation, the change management impact, acceptance and the macro environment.

ERP selection decisions are difficult to make without consideration of financial position, size, structure, critical success factors, experienced human resources and assessing market competition. Depending on the scope and complexity of the business processes, the project manager should explore the system’s software functions in order to maximise the selection of the software that was chosen by the contractual company (Lozinsky 1998).

Top management need to identify if there really is a problem and a need for change and if so, they need to effectively communicate any forthcoming change to all involved. Without careful planning, modeling, learning and understanding the fundamental business processes, systems and legacy systems and functions within the organisation, it may be difficult to best match the current business with the ERP best practice vendor to best fit the organisation. Systems problems are not always detected immediately and corrected, however problems are more likely to be identified if the business processes are understood.

Re-engineering the business process is important for implementing an ERP but there is no guarantee of success because research shows that an ERP system is a high risk project for any organisation. Forward planning and a current work plan will assist in meeting milestones for the life of the project, but everyone needs to be enthusiastic and committed to make the chances of future successes higher.

Even the best of the decision makers available must be careful in selecting an ERP, because the same one system does not fit all markets in the world. The involvement in implementing an ERP should not be underestimated and there must be no misunderstanding of what steps need to be taken. Plan first, not later only to find problems requiring customisation will cost the organisation time and money.

Following on from the previous week provide a rough skeleton of what you are going to put in your conclusions and recommendations.

CONCLUSION

Cisco is a financially stable company that is capable of expansion risks. The research indicates that technology markets are continuing to innovate and the global affects will force growth in order to survive. Cisco’s executives will need to unify and work towards the vision in order to grow and stay afloat in rigid economic times. This also means that Cisco will need internal robust and efficient information technology systems to provide effective and efficient internal and external customer service.

The successful ERP implementation may provide many benefits……..

• a foundation for improved business processes and consolidate Cisco’s information services that enhance internal and external flow;
  
• cost reductions of future efficiency initiatives through a restructured and consolidated environment;
  
• a single source of truth;
  
• organisational behaviour;
  

Cisco’s shift to the server market will require the training and development of internal human resources and other resources that are capable of innovating products that are differentiated, rare, valuable, non-substitutable and costly to imitate. The company will need to develop best-cost provider strategies for their quality products to keep abreast with global change in order to leverage competitive advantages that achieve long term sustainable above average returns.

Cisco Systems has been successful after the implementation of its first ERP system with noted improvements in customer service, sales productivity, financial management and partnerships, but the risks of implementing ERP II must not be underestimated.

RECOMMENDATIONS

That Cisco Systems select and adopt an ERP system subject to the following,

• a) A value proposition and risk analysis is undertaken for a big picture view of the current state of the organisation to measure against re-engineering the current or re-engineering to a new ERP solution. Cisco’s current ERP technology is around fourteen (14) years old and may be at the end of its useful life. It may incur increased ongoing information technology maintenance and upgrade costs if the “do nothing” option is taken;

• b) An evaluation be undertaken to assess that a new standard ERP system cost compares favourably against Best of Breed systems and/ or reengineering the current Cisco ERP system;

• c) Expansion into the server market is proved a viable option and consideration given for the benefits, the competition and market stability;

• d) Key stakeholders including a change manager be identified and involved in all the above.
  

The following to be further investigated,

• Research strategies are developed (i.e. employee’s idea of the company vision, change, cultural issues);
  
• Emergent strategies are developed (move quick for rapid change)
  Research and development (drivers for change);
  
• The outsourcing cost viability be conducted for vertical integration options (review vertical integration options for economies of scale). Cisco does not own all products in the value chain. Investigate the feasibility of acquisitioning a fully integrated service company to strengthen competitive position;
  
• an analysis of viability and continued sustainability be examined;
  
• a confrontational marketing and advertising strategy be developed with a view to maximize customers to maintain competitive edge over rivals;
  
• Best-cost strategies be developed for quality at the best price and tatics to maximise customers;
  
• an ERP Information Systems (IS) auditor is appointed that has technical expertise to efficiently utilise the ERP functions in an audit engagement. The IS auditor is to play an active role in the emerging audit process change at the implementation phase to ensure controls are not compromised during the early phase and risk controlled after the implementation phase;
  
• Competitive strategic decisions, securing and sustaining competitive advantage
  
• Strategies using partnerships
  
• Implementation and action plan for Cisco
  
• Establishing standards and reinforcing Cisco’s quality control system
  
• Evaluating and modifying Cisco’s current strategies
  
• Human resource functions
  

REFERENCES

Avery, S 2009, Cisco invades partners’ turf, The Globe and Mail, viewed 13 December 2009, http://www.theglobeandmail.com/news/technology/cisco-invades-partners-turf/article1378000/

Beheshti, HM 2006, What managers should know about ERP/ERP II, Management Research News, College of Business and Economics, vol.29, no.4, pp.184-193, Emerald Group Publishing Limited, viewed 13 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0210290403.pdf

Cisco Systems, Inc 2007, How Cisco IT Systematically Upgrades the Network to Support Future Technologies, viewed 10 December 2009,
http://www.cisco.com/web/about/ciscoitatwork/downloads/ciscoitatwork/pdf/Cisco_IT_Case_Study_FleetManagement.pdf

Donovan, M 2001, “Successful ERP Implementation the First Time“, Performance Improvement, viewed 12 December 2009, http://idii.com/wp/donovan_erp_success.pdf

ERP Implementation 2007, Cisco ERP Implementation, viewed 13 December 2009, http://www.implement-erp.com/cisco-erp-implementation.html

Huang, S-M, Chang,I-C, Li, S-H Lin,M-T 2004, Assessing risk in ERP projects: identify and prioritize the factors, Industrial Management & Data Systems,vol.104,no.8,pp,681-688, Emerald, viewed 13 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0291040807.pdf

Lozinsky, S 1998, Enterprise-wide software solutions: integration strategies and practices, 1st edn, Addison Wesley, Reading.

Markus, ML & Tanis, C 2006, The Enterprise System Experience—From Adoption to Success, Free University of Bozen, viewed 10 December 2009, http://pro.unibz.it/staff/ascime/documents/ERP%20paper.pdf

Møller, C 2005, ERP II: a conceptual framework for next-generation enterprise systems?, Journal of Enterprise Information Management, vol.18,no.4, pp. 483-497, viewed 13 December 2009, http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0880180406.pdf

Selvaraj, N 2009, Cisco Reveals Makeover Plans, As Network Spending Recovers, Gridstone Research, CA, viewed 13 December 2009,
http://seekingalpha.com/article/171925-cisco-reveals-makeover-plans-as-network-spending-recovers

Sumner, M 2005, Enterprise Resource Planning, 1st edn, Upper Saddle River, New Jersey.

Vathanophas, V 2007, Business process approach towards an inter-organizational enterprise system, Business Process Management Journal, vol.13, no.3, pp. 433-450, Emerald, CQU, viewed 13 December 2009,
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