Enterprise It at Cisco (2004)
Enterprise IT at Cisco (2004)
Question: How well did Solviks’ model work? Did it have the desired effect of turning managers into IT enthusiasts?
Answer: At Cisco, Pete Solvik was considered a “visionary” and a “cult-like figure” to many managers because of his innovative ideas on how to use IT to change the company. (Aungle video). During Solviks’ rein, Cisco was growing at an exponential rate and it was John Chambers’ attitude that as long as they were growing, the business units could spend whatever they wanted on IT. (Id.) Solvik wanted an enterprise IT solution to manage inventory and manufacturing so he chose Oracle, a single-vendor solution, to help manage Cisco’s inventory and manufacturing processes. (Id.) Unfortunately, while this made it easier to implement globally, it later created problems when Boston came on board and wanted to upgrade and streamline the system.
Prior to Solvik, IT was always an internally oriented cost center, but Solvik moved Cisco’s IT organization out of finance and into the customer advocacy group. (Case study, p. 3). This meant that IT spending was no longer thought of as “overhead” and now each business unit manager was responsible for their own investment decisions; it became a client-funded project system. However, Oracle didn’t have all the functionality required by each segment of the business and even though ERP systems are “designed to plan and integrate processes, enforce data integrity, and better manage resources”, managers needed to customize it to their needs. (Bendoly, p.79). Managers remained enthusiastic because they were given the freedom to purchase and install whatever they wanted to sit on the Oracle platform. As a result, inconsistencies developed between different business units and even within the different regions of a specific segment. (McAfee, p. 104). For example, the sales team in Europe and the sales team in the US each created different tools for the same process but they
Question: How well did Solviks’ model work? Did it have the desired effect of turning managers into IT enthusiasts?
Answer: At Cisco, Pete Solvik was considered a “visionary” and a “cult-like figure” to many managers because of his innovative ideas on how to use IT to change the company. (Aungle video). During Solviks’ rein, Cisco was growing at an exponential rate and it was John Chambers’ attitude that as long as they were growing, the business units could spend whatever they wanted on IT. (Id.) Solvik wanted an enterprise IT solution to manage inventory and manufacturing so he chose Oracle, a single-vendor solution, to help manage Cisco’s inventory and manufacturing processes. (Id.) Unfortunately, while this made it easier to implement globally, it later created problems when Boston came on board and wanted to upgrade and streamline the system.
Prior to Solvik, IT was always an internally oriented cost center, but Solvik moved Cisco’s IT organization out of finance and into the customer advocacy group. (Case study, p. 3). This meant that IT spending was no longer thought of as “overhead” and now each business unit manager was responsible for their own investment decisions; it became a client-funded project system. However, Oracle didn’t have all the functionality required by each segment of the business and even though ERP systems are “designed to plan and integrate processes, enforce data integrity, and better manage resources”, managers needed to customize it to their needs. (Bendoly, p.79). Managers remained enthusiastic because they were given the freedom to purchase and install whatever they wanted to sit on the Oracle platform. As a result, inconsistencies developed between different business units and even within the different regions of a specific segment. (McAfee, p. 104). For example, the sales team in Europe and the sales team in the US each created different tools for the same process but they