ERP+Systems

Tuesday, September 27, 2011 <>
 * Enterprise Resource Planning (ERP) Systems **

Topic overview: Enterprise Resource Planning (ERP) systems are some of the largest, most complex, and most important enterprise information systems that companies own. For many manufacturing firms, these systems literally run the operations of the entire firm. They tie key business processes together from across the organization - purchasing to manufacturing to distribution and logistics to accounting to human resources. This integration across the full enterprise brings both great power to insure that the enterprise works efficiently, and also great complexity and sometimes rigidity.

Although ERP systems originated in manufacturing firms, over the past decade they have become popular in service firms as these companies try to run their operations more efficiently. The ERP vendors have responded to the market need and now offer versions of their systems specifically geared towards many different industries.

By the end of today's class you should:
 * Understand what an ERP system is, what it does, and why it is sometimes described as the backbone of the company's operations.
 * Understand how an ERP system ties the different functions and business processes of an organization together.
 * Be able to recognize and reason about some of the challenges an organization faces as it rolls out a large new information system and revisions to its business processes to support the new system.
 * Have improved your ability to analyze a case study and discuss it in class.

**Preparation for class:** In class today we will explore and analyze the case study of Cisco's efforts to implement an ambitious new ERP system as described in the Harvard Business School case study previously distributed: [ANC02] Robert Austin, Richard Nolan, Mark Cotteleer, Cisco Systems: Implementing ERP, Harvard Business School case study 9-699-022, May 6, 2002.

You should come prepared to discuss the case in detail and to take a position on whether the team made the right decisions at the key points described in the case. Regardless of whether you have submitted a case analysis for assignment #1, you should be prepared to answer and discuss the following questions in class:

1. Identify the three most important decisions that Cisco management made in the case. For each of these decisions, identify:
 * Who made the decision
 * How risky the decision was (high risk, moderate risk, low risk)
 * The consequences of that decision, both positive and negative

2. Answer the questions that Pete Solvik poses at the end of the case:
 * What were the most important factors that made the difference between success and failure of the Cisco ERP project?
 * Where had the Cisco ERP team been smart?
 * Where had they been lucky?
 * Could they do it again if they had to?

3. What aspects of the Cisco team’s approach to implementing ERP would you recommend that other companies emulate? Which aspects would other advise other companies to approach differently?

We will, of course, cover many additional aspects of the case but these questions should help focus your thinking about the case.

** Reference materials: **
The case study that we covered is available through Harvard Business School publishing at: [|http://cb.hbsp.harvard.edu/cb/web/product_detail.seam?R=699022-PDF-ENG]

There are no slides for today's class.

Pre-class exercise:
Prior to class today, you should briefly identify one lesson you learned, or recommendation that you can take away, from Cisco's ERP project (as reported in the case study). This could be a lesson that is applicable to you personally, to an organization that you work for, or as a good rule for all enterprise software projects to follow. Please pay attention to the word 'brief'. Your response should take no more than a few sentences and definitely no more than one paragraph.

[Ayah Abujarbou] whenever a company wants to try a new software the company should make the employees try it and then figure out ways to make it work for their company by experimenting with the software instead of over analyzing the software for a long period of time. That shows the employees the exact abilities of the software and to what extend it can be useful for them.

[Meshail Al Misnad]: When very large corporations and companies plan to implement an Enterprise Resource Planning system, one of the most important phases is the testing phase. However, we learned from Cisco that you should make the testing process as real as possible. Hence if the company has a very large database, they should, where possible, test the systems with a representative size of database for more accuracy.

[Fatima Fikree]: An interesting lesson learned from Cisco's case is the importance and effectiveness of a well drafted contract. Cisco was rescued from incurring further expenses simply because the contract with the ERP vendor stated that they would offer a system that met Cisco's capacity and not a specific configuration. Companies should put into consideration that the system they purchase will not fit perfectly with the company and prepare in advance. This helped cut major additional costs.

[Nasser Al-Khori] Form the case, I learned that when integrating a new ERP system into a business we need to ensure that the new system is throughly tested. Only then can we incorporate the new system alongside the businesses existing system. If the new ERP system performs better than the existing system we then can replace them.

[Fatima Al-Khayat]: One of the important lessons other companies can learn from this case study is when testing the new ERP system, each company should test and run all of the processes together and at the same time, and not run each process individually. This would make sure that the attached database to the system is big enough that will eventually help the company avoid having a system that lacks the capacity to process the required load for the company’s growing business.

[Maryam Al-Subaie]: Time and speed evidently played predominant roles in the implementation process of Cisco’s ERP. A good recommendation to all enterprise software projects would be to recognize the fact that things do go wrong from time to time. Therefore, to minimize the impact of those unforeseeable events, enterprises should expect and be prepared to face delays in their target dates. One way of being prepared is to create a contingency plan that identifies all possible adverse scenarios and their alternative course of action.

[Maryam Al-Thani]: Realizing business needs and seeking involvement from the business community proved to be essential to Cisco. They realized that they both needed a strong team and strong partners. KPMG proved to be a successful partner as they helped Cisco in many ways. They assigned Mark Lee, an experienced director of IT for a company in Texas, as Cisco's program manager. They helped Cisco strategize, use their business connections and conducted research. As a result of KPMG's input they increased decision speed and were able to make more informed decisions.

[Ahmad Al-Sarraf]: An important lesson is that when a company wants to apply new software, such as ERP system, it should form a strong team, from the business community, while testing the software to make sure that it is applicable in all departments. Also, the company needs strong partners to help the company in the selection and implementation of the best software. We have seen how Cisco formed the team of about 100 people, representing Cisco’s business community, and both business and IT consultants from either KPMG or Oracle.

[Dua'a Althabatah]: A lesson that I learned is team work is very important and effective, also asking for help from experienced specialists would be a great help to the company's team. Also, always have plan B for any plans that a company's make.

[Haya Al-Mannai]: to be presistent with plans and to act patiently is an important lesson that I learned from Cisco. When Cisco came up with the 80-20 recommendation on how to configure the ERP system, the implementaion team rushed and reduced the training classes from 5 days into 2 days. I think that if CIsco was persistent onto its planning, it was going to avoid many of the problems that has appeared regarding the scope and the capacity of data.

[Sara Al-Mannai]: a lesson that i have learned from the reading is that to achieve a big significant change you need help and support, whether they are work mates or other external forces, the combined work and effort of more than one person is able to effectively produce more.

[Mohammed Al Ahmadani]: One very important lesson I learned from this article is that a firm wants to implement a new system, such as an ERP, which usually has huge implications on how the firm will operate in the future, the company needs a clear and concise plan of action in order to make sure that all the different parts of the firm will not be negatively impacted by such a switch and it should do so before any major cracks start showing up. It should also take great care when it comes to picking who will be part of such a switch in in enterprise systems and making sure that all the parties are on the same page.

[Hussain Hejji]: A very important lesson to learn from this article about Cisco Inc. is that when the company is about to implement some new strategy or system, it is always better to get a hand from experienced consultants in that field. Like how Cisco took some advice from KPMG and Oracle. Another lesson, we should also not surrender quickly but actually get up on our feet and take decisions quickly.

[Al-jawhra Al-Mana]: A lesson that I have learned from this case is that any enterprise thinking of implementing an ERP system should consider testing the system at each step to avoid any mistakes or error that might occur during the process of implementation, This will help the enterprise cut down some costs as it will minimize the number of updates and the maintenance they have to do in the future.

[Hind Al Khulaifi ]: What I learned from this case is that not everything in a business can be measured precisely, especially when in difficult situations. It takes brave and bold decision making to get the process going and afterwards patching up mistakes can make a company reach its goals as well.

[Nahan Arif]: Cisco saw the upcoming downfall from its existing system therefore they should have had a contingency plan ready in advance and thought about the new ERP system [all happening simultaneously] so even before the disaster strikes, they would have had a better and more efficient organization of their business through IT software.

[Amal Osman]: A lesson that i have learnt from the case is that in-order for an enterprise to implement an ERP system successfully, they should keep in mind three key factors while planning. first, allocation of the members that would be involved, its crucial to have the right people with the right mentality working on such a project. second, having a strong partner that would provide the company with the support needed to complete the project. Third is testing the system before running it, this prevents the company from wasting a lot of money in consequence of the system failing to achieve its purpose.

[Fatima Abdulla]: One of the most important lessons that I had learned from this case is first, company should think about all the possible problems that they could encounter in the future and so, they should base their testing phase on these possible problems. Also, I learned from this case, a company success is not only because of it's information systems, or it's business plan but because of the support and help it gets.

[Orkhan Rustamzade]: It was really interesting to see how Cisco dealt with the problem because the companies future was dependent on the outcome of ERP future performance. One of the main lessons i learned from this Case study was that you have to deal with the problem when it is in its early phase. As we can see in the beginning the constant outrage and system failures were problematic however the company did not implement an immediate action when the problem got really worse there was a need in immediate action.

[Mohammed Kamal]: I learned that, especially when you are implementing a software such as an ERP system, you will need strong partners to back you up and share their experience with you. Cisco was successful because they had a good partner such as KPMG who believed in the opportunity and possessed the business knowledge to implement the ERP system.

[Hamsa M Al-Massri]: a great lesson learned from the reading would be the amazing results that a team can come up with. However, the more determined the team is, the more benefits it gets to its company. Also, I believe that Cisco needed a back up plan or a testing phase before getting the system up and running.

[Noof Al-muzaffar ]: i learned from this case how can the company implement a new ERP system and make sure that it meet the business needed. Moreover, i learned how the company must pick a strong, challenged , and trained group to assist in implementing the new system. The team members should have a good business knowledge and skills to support and solve the system problems that they might face. In addition, the company should not hesitate on finding a good partner for the project or getting help from expertise because that will support the project team more and encourage them to work hard.

[Layal Al-Alami] : What I found interesting is not the great results the company achieved, but rather the cost of time that they wasted while trying to teach people everything at the same time. I believe the system was too complex to be taught all atone go. I think the firm would have reached the same goal, with less time and efficiency costs, if they had implemented the system slowly.

[Najla Al-Madhadi]: What I have learned from this case is that gathering the information needed, employing the right people and putting too much effort on the work don’t necessarily ensure a successful business plan or outcomes. A successful business plan needs solid and bold contingency plans to be implemented in worst-case scenarios. One more thing is that the success of the work shouldn’t be only measured based on quantifying the working hours or the number of the people involved. In other words, more working hours and more people involved don’t always lead to better results especially when the quality, the efficiency, and the effectiveness of the work are not very consistent with the difficulty and the complexity of the desired outcomes.

[Anas Ali Chaudry]: Cisco asked other companies to offer them help with their system. This was beneficial for them because the other companies were instrumental in providing them help and keeping Cisco on track. So if a company is unable to control things that they do not specialize in they can ask other companies to help them in such cases.

[Aisha Al-Zaman]: What I have learned and loved from case is assuring to select the right people. From the beginning of the project Cisco's management team eager to select the right people to be part of the project. Even though, the company was in the weakest condition, you still can see that the team is selective and want select the right people. They did not allow their weakness to control their selection.

[Khadeejah Al-Husseiny]: What I thought was interesting, was the concern that in MRS systems people tend to want systems that mirrored their methods of operation. What we learn here is that its good to takes those big steps and call for a huge changes, and retrain people to do things according to how the system intended them, which takes up more time, but nevertheless avoids future risks.

[Noor Al-Mohannadi]: What I have found interesting in the case is the importance of researching before the implementation process, also it's important of introducing the basic functions and processes an ERP systems consist of to the members of the company.

[Dalia Saleh Hassan]: what I learned from the CISCO systems is that companies in their transmission process and by transmission process I mean the process of start implementing a new system or mean of production should hire a consultant who experienced the transmission process.

[Mohammed Hadi Takiddin]: one of the lessons I learned is that companies should not spend a lot of money and time on analyzing the new software of hardware that they are going to use as their mean of production; however, they should experiment it on its employees and see how can they react to it and see if it is going to increase the effectiveness of the company.

[Jevika Shetty]: It is important to involve the business community when implementing an ERP. Leaving all the work to the IT department can lead to unsatisfactory results for the entire company, as the ERP is mainly directed at meeting business needs.

[Patrick Steinhagen]: One of the dangers for companies building an MRP or ERP system is too much customization. Employees will try to keep a system that is similar to the one they currently work on. While this is understandable, it destroys the possibility of improving the system at the cost of retraining.

[M Hammad Abbasi]: One of the challenges of the ERP system is ensuring that testing goes smoothly and accurately relfects the real time struggles of the system. In the case, when the CISCO's new Oracle system went online, it crashed continuously because the new system was not properly tested with ALL the database inputs. It only had a few so the full load was not tested.

[Firas Bata]: One of the most important lessons I learned from the article was that when a company wants to implement a new Enterprise Resource Planning, the following steps should be taken: First, set out a clear, well-defined plan for the developers to follow. After it’s developed, it should be tested on a day or two of operation before it is implemented wholly.

[Nijat Ibrahimov] I have learned that dividing implementation into two parts which is called "rapid iterative prototyping" made it possible to successfully implementation Oracle. The purpose of each CRM was to built on previous work to develop a deeper understanding of the software and how it functioned within the business environment.

[Ognjen Popovic]: The most important lesson for me personally is summarized in the exhibit 4, Cisco ERP Implementation Team Structure. I am amazed by how 'simple', yet effective, their team structure was. The importance of having right people in the right place at every position really proved itself in here. At one point Solvik explains how they choose the people that their respective businesses didn't want to give up, which in my opinion was probably the best decision they made.

[Mohammed Al-Rawahi]: The most important lesson that I have learnt from this case is that as soon as you see that problems might occur in the future, try to find solutions to the problem immediately, do not wait till the problem occurs, or the system to fail, especially if the solution will affect a large part of the organization. As we have seen from the case, implementing a new application needs time and effort, and better decisions will be made if there is a more time to think and test the new solution.

[Jim Briggs] Cisco ERP implementation was boosted by proper planning and direct support from the top management. Despite all this, the most important aspect of their success was having the right people and partners involved.