Enterprise It At Cisco 2004 Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction:

Two enthusiastic computer scientists Len Bosack and Sandy Lerner founded Cisco in 1984; the base office of the company is in San Joes, California, the company enjoyed a very high profitability for several years. Cisco has also topped the Forbes list of 20 best performing initial Public Offering of the 1990s. The first product of Cisco was a multiple-protocolrouter. However, Cisco was not the first company to offer these routers, but Cisco is the first company to be commercially successful with types supporting multiple network protocols. When the various router market starts to decline, Cisco moved into Internet Protocol (IP) router market in which it is quite successful till now.

Cisco followed an aggressive acquisition strategy to bring the innovation and diversity in its products and investment portfolios, in the year 1995-96 Cisco acquired 11 different companies. The positive result of these acquisitions can also be seen from the financial statements of Cisco and the products of these companies are still leading the market. Some of the acquisitions of Cisco are regarded as one of the biggest acquisitions in the industry. In the year 1999 Cisco acquired Cerent Corporation for $7 billionan acquisition later exceeded by that Scientific Atlanta. Several purchases of Cisco are valued at more than $1 billion including LAN switching business, Enterprise Voice over Internet Protocol (VOIP) businesses and home networking company Linksys.

Significant autonomy was given to the managers in acquisition which prove to be so successful for the company; the compensation of the managers is based on the achievement of their financial targets which also motivates them and put Cisco ahead of its main competitors. In early2000,the company was valued as the most valuable company in the world, with amarket capitalization of more than $500 billion and also in 1999 Cisco has almost 75% share of Internet traffic share.

Enterprise It At Cisco 2004 Harvard Case Solution & Analysis

Answer Number 1:

IT Governance Model of Cisco under PeterSolvik:

Governance model provides theboard of directors and senior executives with a set of framework for making the decisions and setting the policies in managing the business. The governance model defines the role and responsibilities of the board of directors, senior management and key employees of the organization. The governance model also receives reports regarding the various sensitive areas such as finance, operations, and risk management. The Governance model is also responsible for the compliance with different laws and regulations.

When PeterSolvikjoined Cisco, IT was an internally oriented cost center. The appointment of PeterSolvik results in the several changes in the fundamental role of IT at Cisco. PeterSolvikseparated the IT department from thefinance department and merged it into customer advocacy group. He also reallocated the budget of IT department to all the departments of the organization and derecognized the IT expenditure from general administrative overheads. Furthermore, he also decentralizes the IT departmentOn the other hand, there were many discrepancies due to this fragmentation, firstly, there were many inconsistencies in implementing the ERP system which proved to be very dangerous for Cisco, and secondly the autonomy that was given to the heads will result in the culture of lack of accountability. The senior management relied heavily on the heads of the departments; somemanagers did not have enough competency to deal with the systems,which increased the inefficiency throughout the organization which ultimately resulted in the decline in sales and profits.....................

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