Week 7

Q.3 Imagine that in the ERP implementation you are involved with, users that are reluctant to get involved with phase 2. What issues, problems and risks, both short and long term, does this present?

If there are doubts about moving a project to Phase two (2) because Phase one (1) has a problem, risks are high and it may be because the project consultants lack enough experience to draw necessary conclusions. Uncertainty may cause delays, reworking, user frustration, underutilisation of the chosen package and potentially package rejection.

Phase 2 puts ideas and theory into practice and is about doing the necessary activities to get the ERP system from acceptance into production. If all is transitioning smoothly from Phase 1 to Phase 2, the project team deploys the software, re-engineers the business processes and ideally involves the key users to participate. The users are involved to watch the way the system processes the data step-by-step and how the new work tools will deal with their daily activities in order to help them gain an understanding and their acceptance for implementing changes.

The short term issues, problems and risks:

There are risks if the employees are not prepared and trained and consequently users are reluctant to get involved with phase 2. The user expectations of the system may not be what expected, for example, how the system deals with the information and their current procedures not fitting to the new information flow and this may likely cause dissatisfaction. There are other considerations, issues and obstacles some of which are typical to the modeling and simulation process as follows:

• there will not be adequate procedures,
  
• the system has a new way of dealing with the data opposed to the previous,
  
• the expected information may not exist,
  
• not enough budget to cover training costs,
  
• not enough staff in the project team for various simultaneous activities when implementing the system,
  
• access, security and control and business continuity
  
• increased manual labour is necessary; and,
  
• other aspects may not be addressed by the package for the business resulting in potential customisation of the product which is undesirable, however may be necessary.
  

The long term issues, problems and risks:

As an outcome of the short term, the long term effect may be that users are not engaged in the ERP implementation because they do not perceive the system to accommodate their current business processes and eventually become dissatisfied, causing resistance to using the new system. This type of organisational behaviour is considered high risk, because they may reject the system and the project will fail as a consequence.

It is critical for the success of the project to educate users about change and as it happens.

Following on from the previous two weeks provide a rough draft of your introduction and your executive summary. Dot points are fine.

The executive summary will be brief one-two page summary that notes Cisco’s mission and the fundamentals to achieve the mission. It will cover the main issues discussed in the body of the report as well as the conclusions reached.

EXECUTIVE SUMMARY
Cisco Systems vision is to change the way people work, live, play and learn and the latest mission is to ……

In the past, Cisco had adopted an ERP …..

Since 1994, Cisco has upgraded its ERP purchasing module relating to the move from Oracle 10.7 to Oracle 11i software. The scope of the project ……

It is now 2009, 16 years later and the company ……

The effective way of achieving Cisco’s goal is to transition the business towards ……

The options investigated have been considered

• 1.Do nothing
  
• 2.Remain with the current ERP, legacy and other systems
  
• 3.Implement and integrate Best of Breed (BoB) systems for each core functional area,
  
• 4.Implement an ERP hybrid solution combining an ERP solution with BoB solutions for specific functions implemented as modules independently,
  
• 5.Implement a new vanilla ERP solution, taking into account the learnings from the last ERP implementation.
  

The option ?, ERP solution aligns with strategic priorities and provides a foundation for the delivery of others and attracts a number of key drivers for the business as follows:

• Efficiencies gains through best practice business processes
  
• Ability to share common business processes and maintain information
  
• Quality and timely information from a single point of truth
  
• Total quality management through a Customer Relationship Management (CRM) solution
  
• Mitigation of risks relating to the current state of the organisation (i.e. supporting hardware, maintenance)
  
• Reduction in IT and IS costs through system validation and process efficiencies
  

The new ERP 11 solution will service Cisco Systems for xx years

The costs associated with options 1-5 presented in the case study are:

• Option 1 $ etc
  

If the Net Present Value (NPV) is positive, the investment will return a better than market investment rate. The comparison of costs and NPV is calculated using a discounting rate of x.x% for options 1-5 presented in the following table.
Option 1-5
Do Nothing, Upgrade existing systems, Best of Breed Solution, Hybrid ERP best of breed solution, Integrated ERP solution

Procure and Implement a new Solution

• Costs
  
• Benefits
  
• Net Value
  
• NPV
  
• Rank
  

Table 1: Comparison of Costs and NPV

The recommended option in the case study is to proceed with the implementation of option ?:

• Technology costs $xx.mil
  
• Resource Costs (includes contractors) $xxMil
  
• Solution provider implementation costs of $xxMil
  
• Continguincy $xxMil
  
• Operational costs $xxMil
  

Recurrent costs as a result of implementation is approx $xxMil per annum commencing YYYY/YY

• One of and ongoing benefits $xxMil per annum commencing one (1) year after implementation consist of the following:
  
• Efficiency gains of $xx per annum
  
• Bankable Savings of $xxxx per annum prior to an in the year of implementation
  
• Avoided costs of $xx per annum
  
• Cumulated discounted benefits delivered by YYYY are estimated around $xxMil.
  

The NPV for the recommended option ? is $xxMil with an internal rate of teturn (IRR) of approximately xx%. The return on investment (ROI) will be reached by the YYYY/YY financial year.

INTRODUCTION
Cisco’s mission is to …….

The CEO of Cisco Systems, John Chambers has ….

Research shows that global competition is forcing manufacturing and service organisations to use technology to improve information flow, etc….

The ERP systems market is fast growing in the software industry and it is a large and complex system that warrants …

The intended new ERP 11 will be ……

Information, Communication and Technology Strategy and Enterprise Architecture

Cisco Systems initial Information Technology strategy was as follows:

• Let division take care of themselves.
  
• Overall architecture is shared, enabling sharing of data.
  
• UNIX-based software package to support its core transaction processing
  

The ICT strategy opportunities needed to support the business goals of Cisco are as follows:

• Efficient business operation
  
• Improving financial sustainability of Cisco Systems services through improving the ICT environment
  
• Reducing and maintaining future ICT risk within tolerances
  

Background to the ERP Program
Cisco was founded in 1984 in California by a group of computer scientists from Stanford University, publically traded in 1990, the primary product was a router and the company ranked number 5 in the world for return on revenues by 1997. ….

Cisco Systems provides internet business solutions and assists customers with productivity improvements. ….

Cisco contributes a key element in the underlying infrastructure of the internet, ……

AIM/ PURPOSE
The purpose of this report is to …… for expansion into the server industry. The report will provide ……

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

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.

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,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/1570130307.pdf

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