Nowadays Information System (IS) has become a vital component of successful organisation particularly for manager in order for organisation to grow and survive.

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.0 Introduction.

'As Information system (IS) can be defined technically as a set of interrelated components that collect (or retrieve), process, store and distribute information to support decision making, coordination, and control in an organization.' (Lauden, Lauden, 2003, pg7) However, Information System has to go through three basic activities, which include input, processing, and output in order to transform its raw data into essential information. Meanwhile, from the business prospective, IS represents an organizational and management solution based on information technology to a challenge posed by the environment. (Lauden, Lauden, 2003, pg31)

Information System is useful for helping organizations to deal with changes in global economies and business enterprise. Firms use Information System on communication and analytic tools for conducting trade and managing business on a global sale. Besides that, Information System is the basic of service in knowledge economies; new knowledge based products and help firms manage their knowledge assets. By using Information System, a business can adopt flatter, more decentralized structures and more flexible arrangement of employees and managements. (Laudon, Laudon, 2003 pg30)

Nowadays Information System (IS) has become a vital component of successful organisation particularly for manager in order for organisation to grow and survive. With Information System, it can provide companies with require practical and functional information that leads to efficient, operation, competitive advantage and effective

management. On the other hand, Information System can critically damage and negatively effect it prospect as well as bring dissatisfaction and unable to fulfill all the requirements for success and survival if Information System appropriately sustain the business objective operation strategy of an organisation. Therefore, this report contains the result of research about a real case study. - " Cisco Systems: Poster Child for the Digital Firm?"

Significantly, the purpose of this report is to critically analyze why an Information System is commonly designed to be efficient, as opposed to effective and thus evaluate why it fails to deliver in practice what business managers require from their system .It is particularly important in an attempt to increase the efficient and improve performance of Information System in organization's operation.

Therefore, the objective of this report can be summarizing as the following:

. To analyze the reason why an Information System is designed to be efficient as opposed to effective

2. To evaluate the reason why Information System fails to deliver in practice what business managers require from the system.

.4 Methodology.

The information for this report which obtained from secondary research was conducted through online/electronic sources, magazines and reference books. In conjunction with this case - 'Cisco System: Poster Child for the Digital Firm', it will be enclosed in the appendix.

2.0 Context

2.1 Summary of the Case

Cisco System advertises itself as the company on which the Internet runs. Cisco has been very successful under the leadership of CEO John Chambers. The key to its success is that Cisco uses information systems and the Internet in everyway it can as well as using the two main strategies which enhance Cisco's growth. Besides, Cisco is using Internet to drive its business and promoted itself as a model to other companies.

In 1995, Cisco started selling its product through Internet. However, in the year 2000, the Cisco Connection Online (CCO) is established in order to make the delivery process more efficient and convenient to both suppliers and customers.

Besides that, Cisco also uses Internet to establish a business-to-business supply chain extranet which is called Cisco Manufacturing Connection Online (MCO). MCO is established for the manufacturer and suppliers to share information and communication. Moreover, it also helps Cisco and its manufacturing partners to reduce the inventories.

Eventually, Cisco shows a great deal of knowledge on its intranet. According to Peter Solvik, CIO of Cisco and the senior vice president state that, the purpose of admitting many customers, suppliers and distributors of its Intranet is to create good relationship with them.

Other than that, Cisco also establishes Cisco Employee Connection through Internet which is used by the Intranet employees and managers. Employees use it to enroll in company

benefits and file expense reports. On the other hand, manager can review the employees, monitor the sales, and collect information of the competitors and other functions through Internet. This is the reason that maintains the low turnover rate of Cisco.

'Virtual close' is then develop by Cisco which rapid its growth. On the other hand, it also helps executives on analyzing performance at all level of the organization effectively. Cisco's Information System is also used to forecast sales; information of bookings, short falls in supplies and delayed product deliveries.

During the market decline in 1994 and 1997-98, when the sales of networking devices slowed, Cisco had continued to expand and increase its market share which lead to the continuing success until now.

However, Cisco experienced a decline of two-third in the technology-laden NASDAQ stock market at this time. Cisco projected telecommunications sales would be double in 2000-2001 but it resulted a sharp decline in Cisco's stock. In summer of 2000, Cisco received an outpouring of orders, which caused substantial delays in fulfilling orders. In order to enhance the delivery process, Cisco has launched a two-fold strategy to resume filling order quickly.

Meanwhile, there is a decrease of sales in Cisco where many sales to newer companies did not grow and most of these companies that had declared bankruptcy could not return their

debts to Cisco. According to Chambers, the order had increased as compare to previous years and the sales are expected to be increased.

At the end of January 2001, Cisco's sales to young telecom companies and 'dot.com' have fallen. There were a layoff around 5,000 to 6,000 of employees, and Cisco is only selling to about 180 young telecom companies and had a written off of $2.5 billion of swollen inventories. Therefore, a quick fall of dollar of network equipment has occurred in the market by 15 cents.

Further, Cisco was suffering from over ordering. This is because many customers ordering from many suppliers to avoid delays in shipments after ordering, and it has caused the backlog increase. Customers cancelled the others suppliers once a certain order by certain supplier had arrived and it has caused the backlog to decrease in sudden. This situation cannot take account by Cisco Information Systems, which Cisco's forecasting software has ignored the macroeconomic factors. Therefore, it causes a misleading and inaccurate information lead to bad decision.

Moreover, the overconfidence of the remarkable sales growth of Cisco that they had before has led to its failure, as Cisco did not consider the possibility of sales might decline.

Cisco is totally over depending on the forecast technology, leading people to undervalue or ignore human judgment and intuition. According to Volpi, "We haven't seen any sign of
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slow down." besides, Volpi also states that he will not be too optimistic against the future of Cisco.

According to Chambers, the sudden and unexpected economic determination is suffering by Cisco, as the company is too dependable on its software. Chambers admitted that this system will do a great job of telling them where there are today but it will not estimate their future by using this system.

In the late August 2001, Cisco underwent a major reorganization, abandoning its "line of business" which had been place since 1997. However, Cisco has replaced the ...

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