The document discusses Cisco's business process re-engineering efforts. It describes how Cisco's rapid growth led to inefficiencies in its manual ordering and tracking systems. This prompted Cisco to re-engineer its processes to create an online ordering system called Manufacturing Connection Online. This system streamlined ordering, reduced costs by $24 million and labor costs by $51 million, and cut inventory by 45%. Cisco's re-engineering proved more effective than earlier simplification efforts and better positioned the company for continued growth.
3. The company was founded in San Francisco and this led to the engineers’ decision to call is “cisco” an all capital letter spelling at the initial stage.
4. By 1990, “NASDAQ” stock exchange listed CISCO in their stock exchange.
7. REQUEST: - often the pattern of request from customers usually calls for a re-engineering of which a failure to do this could be detrimental to the organisation. Usually when a product or service begins to gain popularity, there is need for an increase in customer demand and this usually put a lot of pressure on the company because in an attempt to meet customer request, they often end up producing sub-standard products due to lack of available materials and time but with a business process re-engineering in place, they would re-structure the organisation to be able to accommodate such requests and in turn they maintain their customers and even acquire more and this would be an accomplishment of the organisations goals regarding to customers.
8. SUPERIORITY: - a desire and need fro sophisticated and high standard goods and services is also a call for re-engineering. This is because existing systems including processes and staff might not be able to meet up the sophistication in demands and this might be a source of breakdown or failure to the organisation. To this effect, a re-engineered organisation would be the solution as proposed constant improvement of the system might be expensive and a cumbersome task but a complete over hauling of the system would definitely solve the problems. Further explanation would be found under the benefits of re-engineering.
9. CHANGE IN CUSTOMER DESIRE: - in most cases, customer satisfaction is usually the sole aim of any organisation. Non satisfaction of customers means that the production cycle isn’t complete and the entire business process would be stuck since there are no consumers for the product.
11. LOCALLY: - local competition in the market would also be a reason for re-engineering as because as each day passes, the market becomes a competitive ground for all participants as they have to re-structure, overhaul, remodel etc. to meet up with the standards of other competitors in the market and it is only re-engineering that can provide such room.
12. INTERNATIONALLY : -products and services which have gone internationally and needed seamless communication channels irrespective of location made Cisco as a company thick of such in its re-engineering design. This led to Cisco’s modification of conference calling with its product called “TELE PRESENCE”. This product enables a conversation involving a large number of people across the globe to communicate with each other in video and with high speed. This is part of Cisco’s re-engineered process towards communication and uniting the entire populace.this was as a result of Cisco’s understanding the need for international competition and satisfaction and after strategically studying the market and comparing it with what it needs, it came out with this product and this has made Cisco a name to reckon with when it comes to telecommunication as a recent survey among companies saw that 89% of them had at least a Cisco phone in their organisation while some entirely depended on Cisco for their communication needs.
14. IN TERMS OF INFORMATION TECHNOLOGY AND SYSTEMS: - with the drastic turn around in technology and the globe gradually becoming a networked and wireless world, there is a crucial need for organisations to re-engineer the process to accommodate this trend as a proper business process re-engineering process well implemented would definitely cost a fortune to establish but would bring a lasting reduction in cost of production. This could be evident in Cisco’s launch of its product called “MCO” (manufacturing connection online) in 1999. The manufacturing connection online directly and immediately channelled orders from customers to manufactures as well as suppliers. This in turn drastically reduced operational costs for Cisco, reduced cycles involved in payment to the suppliers, eradicated cost of papers used for paper based purchases and this brought a total savings of $24 million (USD) for material costs and another savings of $51 million normally spent on labour and this also made a whooping 45% inventory reduction.
16. From my rigorous research, I found out that what basically requires re-engineering is not the organisation but the systems and processes in the organisation. Re-engineering is different from “re-branding” as the latter presents the same product and services but with a different look, feel and identity. This is meant to boost the market presence and acceptance of this product. This is for companies that are self centred and lack customer consideration.
17. The former seeks careful review of the product itself, “rethinking” and not “beautifying” to ensure that the benefits from it are multiplied and this multiplication comes from customers willingly accepting the services for the modernized output and not the good looking packaging as re-branding often targets.
18. Processes are the key areas to be re-engineered as this is where the activities are carried out and through processes, business outputs are achieved.
19. As defined above, processes are a group of independent or related activities structured to yield results and products. It comprises of both internal and external actions that yield the desired result.
20. These processes are often misunderstood as departments. Processes are actions carried out in these departments. A typical example is one from my case study company, “CISCO”. If Cisco had thought of terminating their current data entry clerk with excuses that he is slow and they want a faster person or decided to employ more data entry clerks, they might have improved the data handling department but did that improve the data handling process? Of course NO. My reasons are that employing more data entry clerks means more funds have to be budgeted and spent on them; more paper work would be handled in shorter time, accepted. Then the savings Cisco earned from a paperless ordering system, the cut in labour cost and other un-necessary expenses would still remain in the system and since there would be need for salary increase, more and more funds would continue to be channelled towards data entry alone.
21. As far as this manual process is involved, there would still be a limit as to how many customers and partners Cisco can handle because barriers such as: - working hours, public holidays, ill health, inconsistency, errors etc. would be limiting their output but with this automated system, the company (CISCO) has a 24-hour ordering system free of such limitations and as such there is no limit.
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23. Radical Business Enhancement.Business process is not all about radicalised change that brings about improvement. Sustaining this improvement is also vital and this has to be firmly implanted in the organisation so as to maximize the benefits of the re-engineering outcome.A detailed and “step-by-step” approach is necessary since to ensure proper implementation of the initiative since the change in this context is a “total” one and not an over-night or a one week process.
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25. Incorporated Modification.Process improvements have to be feasible and realistic. They don’t have to be documented improvements or virtual improvements neither do they have to be abstract. They need to be visible and physically implemented for the impact of the effect to be felt.There should be a realistic and balanced evidence of the process changes and the business improvements. These are evidence that there was an integral change and the impact is positive.
26. People Centred: - any business process engineering initiative must be centred on people. These people include the workers (organisation or company workers) and the consumers (the customers).It should also provide a medium for empowering the workers and carry them along so as to ensure their participation in the entire process.
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28. They were able to fully utilize the existing and experienced human resources and apply utilize their skills in re-engineering. The demanding nature of the system re-engineering meant that the existing work force would be useful as the re-engineering process continues. This reduces the cost of employing, training and catering for new staff as well as the time needed to get them.
29. There was less risk involved in re-engineering the system as the process involved positive modification and improvement of the processes rather than total replacement. Risks associated with loss of useful business information or acquiring a system that would need to be updated with existing information needed to commence the re-engineering was eliminated.
30. There is a structured positive and “stage-by-stage” modification which could be tailored and implemented based on available funds and resources. Since the re-engineering process is not a one time task, the steps can be performed whenever the resources are available.
33. Costs incurred due to errors and blunder committed by human beings was reduced.
34. More time was saved as information technology allowed multi-tasking as against the previous system where other activities would have to wait for the human being to finish first.
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36. An electronic payment option (cards, online) and electronic data exchange as in the case of file sharing and E-Mails.
37. A centralised server and database makes resources readily available instead of duplicating or queuing up for resources.
38. Information technology also provided backup for the process and related activities so that negative factors such as power failure, data redundancy and missing files no longer pose a threat to the organisation.
41. The customer should be the centre of consideration of the business process re-engineering.
42. Processes that yield poor result or hinder maximum output should be re-engineered.
43. The business process engineering must be run organisation-wide and not by a certain group.
44. Information systems and technology should be included in the business process re-engineering from the onset to enable its availability and support throughout and after the re-engineering process.
45. Regular and stable communication and opinion should be maintained throughout the process.
46. BUSINESS PROCESS METHODOLOGY.According to Short & Davenport (1990), there is a recommended “Five step” guide towards business process re-engineering. They include: -<br />Build up the organizational fore-sight and objectives and processes. Business process re-engineering has vision as its driving force. The vision in this case could be a faster and efficient process as in the case of CISCO, speedy production, reduced cost, improved quality products and services.<br />Recognition of activities to be re-engineered.Identifying the areas and processes to be re-engineered is the next approach. An “exhaustive” approach is recommended as it concentrates on identifying all the organisational processes and then prioritizes them to suit the re-design necessity.<br />Study and evaluate the existing processes.To ensure that earlier mistakes are not repeated again, the existing system should be properly studied and evaluated to pin point and tackle old problems while integrating the solutions into the re-engineering process.<br />Determine the Information technology lever.A thorough evaluation of the available and procurable IT systems and solutions should be considered in structuring the process and this could also influence the business process re-design itself.<br />Develop an archetype of the New process.<br />The conceptual design or prototype should be considered as a basis for the re-engineering and should be evaluated against customer requirements and satisfaction to ensure it conforms to the standard and meets the aims and objectives.<br />WHAT MAKES BUSINESS PROCESS RE-ENGINEERING PROJECTS FAIL?<br />An internet based research, publications and journals prove that about 70% of business process re-engineering projects fail. These failures were further attributed to the following factors: - <br />Lack of continuous dedication, management and control.<br />Undefined and poorly structured aims & objectives.<br />Refusal to change. <br />Quoting a research published on the internet, authored by “Bashein et al” (1994), there are positive and negative pre re-engineering conditions for the process to succeed. <br />The positive pre re-engineering conditions include: - <br />Full dedication, support and commitment of the top level management and sponsors.<br />Reasonable prospects.<br />There should be a shared vision and mission.<br />Proper and updated management practises.<br />Tactical framework of development and growth.<br />Empowered and combined team members.<br />Involvement of the appropriate staff and participants.<br />Sustainable funds and budget.<br />The negative pre re-engineering conditions include: -<br />Full focus on cost reduction.<br />Wrong management staff.<br />Limited technical foresight<br />Self centred and “bossy” sponsor.<br />Poor optimism<br />Some negative pre re-engineering conditions attributed to the organization include: -<br />Poor finance<br />Multiple concurrent projects<br />Poor foresight<br />Fear of re-engineering<br />Lack of skilled employees<br />Poor support from “top level” management staff.<br />PROPOSED SOLUTIONS.<br />To reverse the negative pre-conditions, organisations need to: -<br />Handle their projects in an organized manner and smaller projects and tasks should be carried out first.<br />Proper budget should be done to ensure a hitch free process.<br />All traces of fear and elements of doubt should be cleared to ensure totally support by all members of staff as this brings about the desired unity required to successfully implement the re-engineering process.<br />Consider their objectives and let the re-engineering process be geared towards it.<br />Aside the above listed points, the over all success of business process re-engineering depends on the people involved and how they perform the tasks associated to the re-engineering and re-engineered process, how they could be inspired to utilize their broad knowledge to properly re-structure the re-engineering and use their expertise to maintain it.<br />SUMMARY.<br />Re- engineering is basically a dramatic change achieved from fundamental re-consideration of existing business plans and strategy to ensure the required improvements.Assumption should be avoided like wise “haste” as re-engineering involves a total “re-think” and re-consideration of the business processes not simplification.<br />For Cisco to successfully implement their re-engineering purpose without failure or setbacks, they ensured the following was done which I would also recommend as a suitable “re-engineering process work breakdown structure” to be used.<br />They chose the processes that needed re-engineering and appointed a team to ensure that. The fact that re-engineering needs to occur doesn’t necessarily mean it has to be the entire process. In the case of Cisco, their web portal was okay but not sufficient so they had to re-engineer the processes involved in handling customer request so that it could be received by both suppliers and contract manufacturers and as such everyone in the supply chain gets the request at once instead of waiting for it to go through several un-necessary administrative review or spend too much time getting to Cisco during the manual data entry.<br /> They reviewed the objectives of their business and devised a new strategy not only to simplify the process but to also give room for more customers and partners. They had the customer and partners in mind which is a very vital point to consider whenever re-engineering. They selected the vital processes, ensured proper understanding of the customers requirements, they never allowed fear of anything hinder them from re-engineering and every form of assumption or prediction was totally avoided.<br />They never assumed they were satisfying their clients (customers and partners) as this assumption would have hidden the dissatisfaction encountered by them. They kept their desired competitive advantage and this made them seek the opinions of their clients via meetings and research. Again the clients were the major point of concern not necessarily profit. A very vital aspect to always consider. <br />They also considered their short comings (excess time required for data entry alone). They maintained the original business concept (data entry) and re-engineered it to an automated and direct process instead of finding a way to avoid the data entry process or simplify it to a way that would serve short term benefit as their current solution turned out to be.<br />They maintained good communication with their clients which enabled them to inform them of the necessity of the re-engineering, the benefits and acquainted them on the usage of the system. Their acceptance of this gave Cisco a guarantee that the re-engineered process would be successful and as such, they implemented it.<br />CONCLUSION.<br />Customer satisfaction, timely delivery and a sophisticated business process are the key ingredients for the success of any organisation . Business process re-engineering is the catalyst that organisations need in order to achieve the above mentioned.<br />Business process re-engineering is an attitude through which necessary and required improvements are derived through dramatic changes and attitudes in company as can be seen in the case study on CISCO.<br />The process of re-engineering requires an incremental change in the work pattern, available skills and resources to match the required one, the organisational values. It is a process that requires a lot of time, resources (human and material) and information technology to be achieved and sustained.<br />Information technology assisted CISCO in achieving the required back up and several cost reduction even though a bulk of the cost reduction was done by the re-engineered process. <br />The research results showing failure rate of projects clearly stated that 70% of projects failed and not that they will or could fail. This is enough reason to cast away any fear or doubts associated with re-engineering. The fact that 100% improvement was predicted and 70% was achieved is not a reason to back out after all implementing a strategy and achieving 70% of the expected 100% is far beneficial and different from not trying at all and having a total business failure.<br />Business process re-engineering is not a quick fix. This simply means that immediate success shouldn’t be expected. As everything in life has risks and failure rates, so also does the re-engineering process. Errors from the organisation could make the re-engineering fail but this doesn’t’ mean the re-engineered process would fail. Identifying these errors, correcting them and implementing the process again would definitely yield a successful re-engineered process. This further implies that business process re-engineering must be successful and yield positive results if no stones are left un-turned in the processes and steps towards the re-engineering.<br />.<br />RESEARCH METHODOLOGY.<br />In order to properly write this essay various forms of research were carried out which included “question and answer” based interview with Cisco, online research on Cisco, journals I obtained at the Cisco premises, books available in my school library, online publications and journals, revising my lecture notes and also tasking myself to collate all these materials into a meaningful output (this essay).<br />The primary aim of the research.<br />This research was carried out based on the necessity to acquire information to serve as contents for this essay and provide me with basic understanding of what the essay topic meant. I also wanted to get diverse perspectives of business process re-engineering and make sure that information I acquire from my case study company were not provided just for marketing purposes but true facts about business process re-engineering.<br />Research Task.<br />The task I performed during my research includes: -<br />Selecting a company relating to my topic so as to acquire the right data and idea.<br />Drafting out my questions for the interview.<br />Interviewing the company.<br />Comparing the results of the interview to what they presented to the public via their journals, publications and online.<br />Reading books covering the business process re-engineering topic.<br />Visiting internet sites relating to Cisco and business process re-engineering.<br />Subscribing to journals and websites that run forums on this topic.<br />Research Materials.<br />My research materials include: -<br />LIBRARY BOOKS<br />WEBSITES<br />JOURNALS<br />PUBLICATIONS<br />QUESTIONS TO CISCO<br />FORUMS<br />EDUCATIONAL PORTALS<br />LECTURE NOTES AND RECOMMENDED BOOKS.<br />STUDYING CASE STUDY SAMPLES I COME ACROSS.<br />Benefits.<br />After I carried out my research, I was able to obtain the necessary information I required, I had selected and “straight-to-the-point” materials to read at my finger tips so that I could have maximum concentration instead of visiting numerous sites while working or carrying voluminous books that would scare me. I was able to read and write my essay in my own words thereby avoiding plagiarism.<br />