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Enterprise Resource Planning (ERP) - Essay Example

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Cisco Systems has been widely acclaimed as an early adopter of ERP and being successful at it. Cisco has been credited with timely adoption of the e-mail, Internet and ERP technologies at the perfect opportunities that contributed to its growth and made it a widely acclaimed company…
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Enterprise Resource Planning (ERP)
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Enterprise Resource Planning (ERP)

While in college, they found that the inefficiencies of the existing infrastructure led to great difficulties in being compatible with the numerous mail clients in operation and served to go from there. They took their idea with them when left the campus and Cisco Systems was born.
Cisco grew rapidly and to cater to the company and product information distribution, launched an official website in 1991. It had a 50% share of the networking market and struggled to keep up with the calls it was receiving.
By 1993, Cisco boasted a growth of an astounding 270%, but its IT department was sorely lacking to cope with a half billion-dollar company growing by 50% each year. The initial budget was for funding IT was 0.75% of sales and this was inadequate. CIO Pete Slovik and Senior Executive, Doug Allred, brought a revolutionary concept that entailed that the IT spending was linked to the business units that in turn necessitated close alignment to the company goals. Cisco's internal network would play a strategic role in providing the connectivity needed for the business units to build applications creatively.
This new concept signified that a major upgrade to the existing infrastructure was needed if Cisco managers were to meet the customer satisfaction goals. Because it was a major decision that would cost millions, cash-strapped Cisco will find it quite complex. In 1994, Cisco's systems broke down unable to cope and Cisco was forced to close down for two days. There were other several minor troubles on the way.

The Solution
The board went ahead and approved the proposal for a $15 million Oracle ERP system. This would entail a 2.5 percent of the 1993 revenues, thrice the IT budget of the previous year. The total cost of completing the ERP was $100million. It is not an overstatement to say that the Oracle ERP system became the backbone of the Cisco E-Business. It unified all of the Unix Servers and became a source of centralized information.
(Complete case study details available from website
< http://mba.tuck.dartmouth.edu/pdf/2001-1-0001.pdf>).

Enterprise resource planning (ERP) is a system that integrates a number of the back office functions of planning, manufacture, distribution, accounting and human resources etc. into a single system ERP is a method of serving each individualized department with minimal redundancies and hence has several customized software applications integrated by a single interface.
Being vast and comprehensive, an ERP implementation can cost millions of dollars to create, and may take several years to complete. The advantages of the ERP system when properly implemented are tremendous.
The integration of information of the departments allows easy sharing of information. Typical Benefits would include reductions in inventory, material costs, and labor and overhead costs, as well as improvements in customer service and sales, improved customer service and sales and improved accounting controls. It can speed up the manufacturing process by automating processes and workflow, and as a result, it reduces the need to carry large inventories. If implemented properly it will provide the company a major advantage in the competitive market.

Contributing Factors to Successful ... Read More
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