Posted at 10.07.2018
Ting Cheuk Sze
Topic: How do you think ICT / Information System infrastructure and IT strategy at Cisco is encouraging the business? (1451words)
A) A short summary of Nolan's (1973) phases of development model
Nolan represents a learning curve in the development of data control in 1974 Harvard Business Review. Nolan believes that organizations need to understand the development characteristics associated with each stage of development. Understanding this curve is conducive to help organizations effective implementation of it. The first version consisted the levels of initiation, Contagion, Control, Integration. It eventually widened to six periods in 1979, which include "Data administration" and "Maturity".
Nolan's main content of the level model:
Stage I, Initiation
The organisation presents computer system to increase its competitiveness. Data processing costs are lack of control, the establishment of information systems often do not pay attention to economic efficiency in this level.
Stage II, Contagion
Information technology applications started to disperse in the company. The organisation professionals began to focus on the economic benefits of information systems investment, however the real control does not exist.
Stage III, Control
The management information system became a formal division to regulate its interior activities and launched a task management plan and a system development methodology. The existing application began to formal, and lay down the foundation for future years development of information systems.
Stage IV, Integration
Organizations began to work with directories and telematics solutions to combine existing information systems. Which can be the level that previous systems are included with the newer systems.
Stage V, Data administration
The organization starts to examine and evaluate the various costs and great things about information system engineering, and analyzes and resolves issues of balance and coordination in every areas of information systems investment.
Stage VI, Maturity
At this stage, the information system can meet up with the needs of businesses in any way levels. the business will assimilate the management process alongside the internal and external resources, thus enhancing the competitiveness and development probable of the venture.
B) Apply Nolan's Level of Development Model (1973) in Cisco case
In this essay, I'll discuss the Cisco case by using Nolan model level by level and show how Cisco was following a Nolan model through the system develop process. Moreover, discuss about the condition when Cisco tried to process to the next stage. For the Cisco circumstance, I will give attention to the first version of Nolan's Level of Progress Model (1973) as the article question require, which is only consider four stages, "Initiation'', "Contagion'', "Control'' and "Integration" stages. In addition, the fifth stage will be discussed which because it may appropriate in the Cisco case, which is "Data administration'' stage. I will not discuss about the sixth stage. In my view, Cisco hadn't process to the sixth level form the case study(2004).
Cisco is one of the example can be clarify by Nolan's Periods of Progress Model. Nolan's (1973) levels of expansion model framework is suitable in the Cisco development process because they are similar which Cisco development process is also following a stage that refer to in Nolan's model. The model summarises the experiences and legislation of development of management information systems. It is generally assumed that the stages in the model are not jumpable, because the organization needs some experience before finding your way through the next phase of work. The development process in Cisco is nearly same as the Nolan's model. its basic idea for the engineering of management information system is instructive. In-depth understanding of Nolan model can help organisations more effectively manage the process. Although these phases contain some natural progress processes, these progress processes can be effectively coordinated and monitored, so that each stage represents a change in the order of planning and management. The first two phases: Initiation and Contagion
Cisco had been experience first two stage before Peter Solvik joined Cisco as its CIO in 1993. 1984, Cisco Systems was founded in america, the founders are two computer scientists from Stanford School. Computer was introduced when the business was founded. Computer is a required equipment for the company because the products and computer are match in the creation line. However, there were just a few individuals can use the computer, for example, both computer scientist founders. Following the growth of Cisco, Businesses acquired a certain knowledge of the computer. They wish to use computers to resolve problems at work, such as more data control, management and business to bring convenience. Thus, the application form started to increase demand, IT applications began to generate involvement in enterprises, and the introduction of software enthusiasm, investment began to increase significantly. It is simple to blindly purchase, blind development of custom software phenomenon, the lack of planning and planning, so the application level is not high, the overall effectiveness of computer can't be highlighted as Nolan (1974) has been discussed on his paper.
Until Peter Solvik became a member of Cisco, he known the situation from the second stage(Contagion), such as data redundancy, data inconsistency, and the date was hard to share. Business managers came to the realization that the utilization of computer systems applications was out of control, IT investment growth was fast, however the benefits weren't satisfactory. He tried out to begin to regulate the entire development of personal computers, like the reorganize the IT budget planning, substituted committee and change the reporting relationship. However, Cisco was still stunning in the very beginning of the third level.
The third level: Control
Boston joined Cisco as a new CIO after Solvik still left in 2001. He sees that there is an ineffectiveness investment on the personalized tools. There have been nine different tools to access the client order which create multiple data and different definition on reason with the order. He thought the conflicts and redundancies is occur because there have been not centralized team looking at for the business systems which lead to a rise of unneeded tools. As Nolan (1974) discuss, for the need to control the price tag on data processing, professionals started to convene users from different industries of the Committee, to jointly plan the development of information systems. The management information system became a formal department to regulate its inside activities and launched a job management plan and something development methodology. The existing application commenced to formal, and place the foundation for the future development of information systems. Inside the Cisco circumstance, Boston ended the investment of the new tools applications and upgraded its ERP (Organization Resource Planning) system, fixing the reporting and intelligence problem and expanding its customer data source.
The fourth level: Integration
Boston also centered on funding IT project. It makes the company process to the fourth stage, which is Integration stage. Organizations from the management of computer management information resources. In the first stage to the third level, usually a lot of unbiased entities. Predicated on control, enterprises started to re-planning and design, the establishment of basic data source, and build a unified information management system. Enterprise IT construction started out by the dispersed and single-point development into a system. At this time, corporate executives commenced unified different venture IT organizations systems into an individual system for management. People, financial, materials and other resources can be integrated in the venture sharing, lead to more effective use of existing IT systems and resources. Nolan regarded such integration costs will be higher, much longer, and the machine is more unstable. However, Cisco didn't in the event. Boston encouraged his team being carefully in the enterprise project, tried to reduce the multiple data and various explanations of the order problem to avoid the future large level of cleanups. It was because it will increase the unnecessary spending if it is useless.
The fifth stage: Data administration
In this level, the organization started a comprehensive analysis and evaluation of the many costs and great things about information system construction. The challenges experienced happened in Cisco, the process of funding budget in a pool from different groups across the world is complex. It really is hard showing the advantage of the new venture task to every group. Boston began to consider about the communication between your group on order to increase efficiency when starting a new project. This stage, enterprises began to select a unified database program, data management system and information management program, unified data management and use of various departments, the basic realization of the system integration of resources, information posting. IT system planning and reference utilization more efficient.
Nolan level model summarizes the experiences and rules of management information system development, and its basic idea has guiding relevance for the building of management information system. it could be apply in the Cisco case. Nolan's (1973) levels of growth model framework is suitable in the Cisco development process because they're similar which Cisco development process is also following stage that refer to in Nolan's model. Cisco was experience from the first level when it's been founded in 1984 and continue steadily to the fifth stage in 2004. (1451 words)
Andrew Mcafee, F. Warren Mcfarlan, Alison Berkley wagonfeld (2004), "Organization IT at Cisco". Harvard Business School Posting, Boston, MA 02163.
Nonna, Richard. "Managing The Problems In Data Processing". Harvard Business Review. 57 (2): 115-126.
Nolan, Richard (1973). "Managing The Computer Resource: A Level Hypothesis". Communications of the ACM. 16 (4): 399-405