1. Introduction
Implementing an Enterprise Resource Planning System in time and budget seems to be a formidable task to many experts. The size and complex nature of this popular type of information systems brings along the difficult decision whether providing the necessary resources is worth the effort. To fully achieve the benefits suggested by researchers and consultants alike, a carefully planned implementation phase is of crucial importance. How this process can become a success story will be highlighted in the following case study.
With the rise of the internet in the mid 1990s, Cisco Systems Inc. established a strong position in the market for network and communication devices such as routers and switches. Today the company is the clear market leader for network equipment with a net income of $5.6 billion in 2006 (see exhibit 1 and annual report of Cisco Systems, 2006). After it became publicly traded in 1990, Cisco faced enormous growth options which become obvious by looking at a number of key indicators in the financial statistics of the firm (see exhibit 2). For instance, net sales almost quadrupled in the period between 1995 and 1998. While many firms put quite some effort in assessing the need for an ERP system, decision makers at Cisco did not have to bother with that question for too long: The persistent growth could not be handled with the only loosely-interlinked legacy systems of the various departments. Management decided to implement an Enterprise Resource Planning System with the manufacturing department as point of departure right after the firm was largely unable to conduct business for two days in late 1994 due to Cisco’s corrupted central database caused by workarounds used for the legacy systems.
In contrast to many other compa ...