Software applications provide a platform that supports various business practices. Therefore, it is vital for an organization to have efficient software applications. The efficiency of software applications determines the ultimate efficiency and competitiveness of the organization.
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Therefore, companies spend huge sums of money in implementing software applications that support their business operations. However, implementing IT projects is one of the most daunting tasks of any organizations. The rate of failure of IT projects is usually higher than for other projects within the company.
This necessitates a company to device an elaborate strategy that would lead to successful implementation of the IT project. Failure of IT projects may have dire consequences on an organization. It may lead to stalling of the operations of the company.
In addition, it may elicit negative publicity, which may damage the reputation of the organization.
Enterprise Resource Planning is one of the major IT projects that a company may implement. ERP helps in streamlining the workflow in an organization. ERP affects virtually all organization’s activities. ERP determines the ultimate efficiency of the organization’s activities.
Therefore, it is vital for an organization to have a suitable ERP vendor. The success or failure of the ERP implementation project would have significant effects on the business. This is because ERP systems provide the backbone of virtually all operations within the company.
ERP systems cost anywhere between hundreds of thousands of dollars to millions of dollars. Therefore, failure of an ERP implementation project would make an organization lose vast sums of money. In addition, failure may stall the operations of the organization making the organization lose vast sums of money.
The scope of ERP implementation projects increases the necessity to have elaborate procedures that would ensure the ultimate success of the project. In most instances, companies overlook certain aspects of the implementation process.
This is one of the major factors that contributes to the high rate of failure of IT projects. Successful implementation of ERP system would improve the competitiveness of an organization. Cisco Systems Inc. is one of the few companies that have successfully implemented an ERP system.
The inefficiencies of Cisco’s legacy systems necessitated the company to shift to an ERP system. The shift would provide a system that would support the company’s future growth. Prior to the implementation of the ERP system, the company’s systems were on the brink of failure.
Malfunctions of the systems resulted in shutdown of the company for two days. This made the company lose huge sums of money. The imminent failure of the company’s systems necessitated the company to develop a new system. Therefore, the company implemented the new ERP system out of necessity.
The success or failure of the ERP system would have far-reaching implications on the activities of the organization. The management of the company understood the need for the company to shift to a new ERP system. There was a consensus of the need for change within the organization.
In fact, the legacy systems failed on a day when there was a board meeting. Managerial support was one of the major factors that led to the ultimate success of the implementation ERP system. The management of the company was eager to implement the new system.
Incremental changes in the current system would not be able to solve the problems that the existing system faced. In addition, incremental changes of the legacy system by different departments within the company were not able to recover from the regular system outages.
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Having an elaborate plan on how to shift to the new system was one of the critical factors that led to the ultimate success of the ERP implementation process. Cisco undertook an extensive survey of the efficiency of existing ERP systems.
This enabled the company determine the vendors who would be able to offer an efficient ERP system. Spending more time studying the ERP vendor’s capability to understand the issues that the company faces reduces the time that a company takes in fixing problems within the system later. According to the company, Oracle was the only vendor that was able to meet the expectations of the company.
ERP leads to significant changes within an organization. Therefore, it is vital for the company to seek the support of the final users of the system. Resistance to change may lead to the ultimate failure of the system. The final users of the system may not use the ERP system in their daily activities.
This would make the company fail to reap the maximum benefits of the new system. This necessitates a company to have efficient change management. In addition, the company should train its employees on how to use the new system.
Training and efficient change management would enable the users of the system embrace the system. Cisco provided training to its employees on the new ERP system. This helped in reducing resistance to the system.
In addition, a clear understanding of the new system helped the employees provide significant contribution on how to customize the system to fit the needs of the company. This is because employees have intricate knowledge of the company’s activities.
Cisco convinced Oracle to compress a five-day training course into two 16-hour training sessions. This helped in reducing the time that the company spent in training employees. However, this posed a significant risk to the success of the implementation.
This is because two long training sessions are not as efficient as many short training sessions. Therefore, it is pertinent to say that the company lucky in this aspect.
Having knowledgeable, experienced, and dedicated people within the project implementation team is one of the critical factors for to the success of ERP systems implementation projects. Cisco had a team of experienced, knowledgeable, and dedicated staff in the project implementation team.
Cisco chose KPMG as the integration partner. KPMG was one of the most experienced firms in the industry. KPMG provided experienced professionals who helped in the implementation of the project. KPMG was involved in the project from the selection of the right software vendor up to the end of the implementation process.
Therefore, Cisco attributes the success of the ERP implementation process to the support of KPMG. In addition, Cisco benefited greatly from the support of Oracle, the ERP software vendor. Cisco was the first major company to use the new ERP system from Oracle.
The success of the new ERP application in the market was highly dependent on the successful implementation of the system by Cisco. Therefore, Oracle was desperate to ensure that the implementation process was a success. The company provided all the technical support that Cisco needed to ensure that the implementation process was successful.
In addition, Oracle offered Cisco a good deal on the ERP system. This is because Oracle desperately wanted to win the tender for the provision of the ERP system and prove that the new ERP system release was much better than the previous versions. In addition, the hardware vendor contributed to the ultimate success of the ERP system.
Cisco used the hardware capabilities rather than specific hardware configuration in negotiating a deal with the hardware vendor. This necessitated the hardware vendor to ensure that the hardware was capable of meeting the capability that was necessary for efficient operation of the ERP system.
Therefore, the hardware vendor provided technical assistance to enable the ERP system meet the capabilities that were necessary for the efficient running of the ERP system. This led to great financial losses to the vendor.
Teamwork is one the major factor that determines the success of virtually all projects within an organization. Implementation of an ERP system affects all divisions of the organization. Therefore, it is vital to ensure that there is teamwork among various departments within the organization that will be affected by the ERP system.
Teamwork is one of the major factors that resulted in the ultimate success of Cisco’s implementation of a new ERP system. Teamwork helped in making critical decisions that led to the success of the project. In the new ERP system, communication would take place via a data warehouse.
Teamwork was necessary for the creation of the data warehouse. The data warehouse was one of the most important features of the ERP system. Teamwork enabled Cisco to create an efficient data warehouse.
Prior to the implementation of the ERP system, an organisation should undertake extensive tests to determine the efficiency of the syste. Testing helps in detecting red flags in the ERP system before the system goes live.
Therefore, testing helps in fine-tuning the ERP system to enable it cope with the demand of the company activities. Cisco faced several problems in the implementation process. The ERP system was unable to handle to transaction volume in Cisco’s business environment.
Failure to test the system using a big database during the implementation process was the major factor that contributed to this problem. In addition, hardware capability problems amplified this problem. Luckily, the company successfully overcame these problems due to the support of Oracle and the hardware vendor.
A company may use two ERP implementation strategies. A company may for a ‘big bang’ or the sequential phase implementation strategies. In the big bang implementation strategy, a company removes all its existing legacy systems and replaces them with the new ERP system simultaneously.
This strategy is usually resource-intensive. A fault within the system would lead to amplification of the problem. Therefore, the big bang approach is not suitable for large companies as it exposes the company to great risks in case there is failure of the new ERP system.
A company may also use the sequential phase implementation strategy. In the sequential phase implementation strategy, the company implements modules of the ERP system one at a time. Therefore, there is usually integration of the ERP system with the existing legacy systems during the interim period.
This is one of the major problems of this implementation strategy. However, it is easy to manage the implementation strategy.
Cisco used the big bang approach in implementing the new ERP system. The company launched all the modules of the ERP system simultaneously. This exposed the company to great risks in case of failure of the ERP system. However, the company overcame the initial problems that the ERP system faced.
Support from KPMG, Oracle and the hardware vendor is one of the major factors that led to the ultimate success of the ERP system. Oracle was one of the major parties that provided technical support to ensure the ultimate success of the system.
The success of the new ERP system release was highly dependent on the success of the implementation of the system by Cisco. Therefore, the situation would have been different if Cisco was not the first major company to use Oracle’s new ERP system.
Oracle may not have provided the high level of technical assistance if Cisco was the first major company to adopt the system. Therefore, timing of the ERP implementation process played a critical part in the ultimate success of the project.
The successful implementation of Cisco’s ERP implementation project is a clear illustration of some of the factors that are critical for the success of an ERP implementation project.
The success of the project highlights the importance of management support, teamwork, and choosing the right software and hardware vendor in the ultimate success of the ERP system implementation project.
However, in Cisco’s case, luck also played a critical part in the success of the project. Timing of the ERP implementation process was one of the major aspects where luck played a critical part in the success of the project.