| | Assignment: Enterprise IT at Cisco Case Write-Up |
Summary:
Enterprise IT at Cisco Systems is an interesting case that demonstrates what happens when a company’s IT infrastructure is decentralized. In the case of Cisco, the word decentralized was demonstrated in how the individual departments conducted business in their own ways and not in conjunction with other business functions. At one point, this approach was encouraged as it was believed to allow departments, and the people running them, the ability to avoid company politics, to ensure their priorities were met, and to encourage each department and individual the opportunity to be creative and innovative, which is a fundamental component of Cisco’s company style. Brad Boston, CIO of Cisco, believed that it was possible to retain that company attitude of innovation in a more centralized manner to decrease redundancy and formally integrate systems. While there was a great deal of pushback from employees, and the full centralization will take a great bit of time, Boston was making the best choices for the company.

1. How did Cisco find itself in such trouble with regard to its internal IT in 2001? Why didn’t the single ERP system help more? Why didn’t this ensure more consistency? As briefly mentioned above, Cisco found itself in such trouble as a result of allowing every department and employee operate freely and with little regard for what others were doing. As stated on page 4 of the case study, “Boston also discovered that IT decisions were made in functional silos, with no centralized group checking for conflicts and redundancies.” If employees had checked to see if specific applications had been created to measure various areas, they would have seen multiple applications already in existence. Instead, each time a particular function or application was needed, a new one was created that added to the build-up within the system. Not only did it add to the build-up within the system, but also it wasted money on repeating functions.

The single ERP system did not help Cisco’s troubles or ensure more consistency. Cisco had a single ERP system that housed and stored all of the data inputted company-wide and was chosen primarily to manage inventory and manufacturing. The data included custom reports, applications, and more. However, the single ERP did not turn the information inputted into data that was usable or consistent for everyone. As a result, reports measuring similar data would yield different results. This led to initial studies providing some value for the person or team who requested the information, but when information was needed from a “big picture” viewpoint, the numbers did not add up. 2. Would you approve the call center project? Why or why not? The call center project certainly has an appeal and should be approved, but it should only be approved on a contingent basis. The goal of the call center is to fully integrate Cisco’s technology to be able to take calls, route them, and escalate them to the necessary personnel. In order for this to work, Cisco must be fully centralized and have all of the tangled webs from the old system undone and fully worked out. This would then support customer input in a measurable and easily attainable way that can be tracked company-wide. Boston’s new system is a massive overhaul and one that costs significant money and time to roll out. Part of his proposed changes is to centralize project management, as well, in terms of funding, board-member involvement, project importance, and expected results of each project. Once Boston’s work is done and assuming the requests are not met as a result of the e-customer solution, and if the customer advocacy group can support their request, then it is absolutely a viable project to consider and one that will benefit Cisco. 3. What was Pete Solvik’s approach to IT decision making at Cisco? Did he think that line managers should get to make all IT decisions? If not, which ones did he want the IT function to make, and which did he want the business units to make? Peter Solvik’s approach was the opposite of what Boston was seeking: a decentralized IT decision maker. But, he made necessary changes at a time when Cisco’s operations were vastly different from the point in time of the study. His approach was to change the notion that IT was considered overhead. As noted on page 3 of the case, he did this by moving IT to the customer advocacy group, reallocating the IT budget to the individual department or function, and made it so that IT investment decisions on application projects were “pushed out to the line organization but still executed by the centralized IT organization.” Solvik did believe that line managers should get to make all the decisions. This was evidenced by the creation of the silos, which led to no one checking for redundancy or inefficiency. What this created was a buildup of information that did not allow for cross-department utilization. Additionally, it led to overspending on redundant application needs and an increased difficulty for Boston when it cam to sorting out the sizeable data in the legacy ERP. 4. What is ‘shadow IT’? Why would a CIO want to control/minimize it? Are there effective ways to do so? Do you think Boston’s amnesty program will work? Does it stand a good chance of uncovering all or most of Cisco’s shadow IT projects? The “shadow IT” projects mentioned in the case refer to the teams and employees who were averse to the change initiative Boston was performing. Rather than comply with his request to cease any new application development until things got sorted out, some teams continued to call on IT employees to develop their needs. These shadow projects typically came out of the shadows when the projects grew too large for one person’s capabilities. The existence of the shadow IT makes the change initiative Boston sought more difficult to implement, and thus he would want to minimize it so that the problems do not continue to worsen. Once Boston’s goals of a company-wide fully integrated system become clearer to staff, the amnesty program should work. As with most situations, change is not generally handled well. Thus, it is up to Boston and his supporting staff to communicate effectively to all employees at all levels, and work with those who express significant resistance to open their mind to the new idea and show them how the new measures will benefit. Additionally, the amnesty program will work as long as it is enforced and violation of the program results in clear consequences and is strongly enforced.

Works Cited McAfee, Andrew; McFarlan, F. Warren; and Wagonfeld, Alison. “Enterprise IT at Cisco (2004).” HBS No. 9-605-015. Boston: Harvard Business School Publishing, 2007.