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  • 1. CISCO Systems: Implementing ERP Presented By:  Anand Bhatia 65  Payel Dey 68  Anshul Saxena 71  Achin Sehgal 72  Ajita Vishwakarma 80  Bindu Mishra 110
  • 2. Company Background Founded Primary in 1984, IPO in 1990 product at that time-router High growth company-return on revenues and on assets First acquisition –Crescendo communication in Sept 1993 By 1997, its first year on the Fortune 500 On July 17,1998, market cap passed the 100 bn. mark
  • 3. Continue… •In the next five years plans to create over 200 new training facilities in India, for networking and system engineers. •In the next 3-5 years plans to invest over $10 million into the Palestinian territories, for job creation and economic development. •Has spent a $2 million investment aimed at 9th-10th graders in the Mediterranean region, to train new business leaders.
  • 4. Company Structure  Three functional divisions: –Order Entry – Finance – Manufacturing  Initial IT Strategy: – Let division take care of themselves. – Overall architecture is shared, enabling sharing of data.
  • 5. History of IT at CISCO  UNIX-based software package to support its core transaction processing: – Functional areas supported: financial, manufacturing and order entry systems – Used common architecture and common databases  Growth of Cisco resulted in scalability problems.  Cisco was the largest single costumer of that vendor, resulting in a strategic weakness.
  • 6. Background - Cisco IT IT Problems “It had become too much spaghetti, too customized”-Pete Solvik The original upgrade/patch approach made little progress, system outage became routine, hard to recover from outage It would take too long to get applications in place by making decision and implementation separately within group It would take a lot longer to implement a too customized system to end up as a mega-project Systems were on the brink of total failure
  • 7. Training Programs •Communications Training: To complement Cisco Telephony solutions, Cisco has developed a range of learning offerings for these IT professionals and organizations. •Security Training: Cisco has developed a range of network security certifications for IT professionals and organizations. •Wireless/Mobility: For the need qualified professionals who can design, install, support, and operate a mobile wireless solution. •Routing and Switching Training: For professionals who can plan for, design, implement, operate, configure, and troubleshoot Cisco switches and routers in multiprotocol internetworks.
  • 8. Self Study Options Cisco Learning Connection Cisco Learning Connection helps Internet professionals learn more effectively. Applications Available * Application Networking Services * Broadband Cable * Networking Fundamentals * Network Management * Optical Networking * Routers Partner Education Connection Cisco Press * Routing Protocols * Security and VPN * Storage Networking * Switches * Voice and Unified Communications * Wireless
  • 9. Learning Partners In Texas alone Cisco has 11 partners authorized to give classes using official Cisco material.
  • 10. Continued… Network Deployment Mentoring •These training camps focus on: The integration of advanced technologies. Classroom Sessions include study on connectivity, config, and troubleshooting. Curriculum Planning Service •Identifies skill and knowledge requirements •Identifies potential areas of development •Prescribes a curriculum plan of formal training Technical Knowledge Library •Help avoid common difficulties and ease the training process. •Users access the knowledge content
  • 11. CASE STUDY
  • 12. A Big Need Recognized the need for change, but left actions to each functional division: Thus: – Little progress was made in the year – Each functional area was reluctant to replace the legacy system because of high risk involved – Systems outages became routine – Unauthorized method for accessing the core application database malfunctioned, corrupting Cisco’s central database Company was shut down for two days
  • 13. Selecting an ERP Product  The planning was driven only by timing constraints and panic. – There was no business case  Cisco emphasized the need for: – Strong team – Strong partners – Speedy decision making – Getting Executive & Board approval
  • 14. Project Team and Partners  Team: –– Know that very best people are needed –– Pulled best business & IT people out of their current jobs at Cisco  Partners: –– Important that partner could work on the selection as well as implementation of project –– KPMG as integration partner –– KPMG team of 20 (highly experienced; not “greenies”)
  • 15. Team Selection Strategy  Teams strategy – use experiences of other companies and best practices to accumulate knowledge Selected five packages within 2 days After a week of high level evaluation – two packages selected: ORACLE and another major player in the ERP market 10 days on request for proposals
  • 16. Continue…  Oracle & other vendor given two weeks to respond to RFP  Current vendor customers were visited by the team during these two weeks  After response, received a 3-day software demonstration by each vendor (used Cisco’s sample data)  Goal is to show how software meets or does not meet Cisco’s requirements
  • 17. Vendor Selection Strategy  Three main criteria used: – Manufacturing capability – Long-term development of functionality of package – Flexibility of Oracle’s being close by (location wise)  Other motivations – Oracle’s first release of new ERP product – if Cisco project goes well, favorable product launch of Oracle ERP package  Oracle chosen – team decision, no management approval at this point
  • 18. Costs involved and Time Costs: – Software 16% – Hardware 32% – Headcount 14% – System integration 38% Time: Three main criteria used: – Manufacturing capability – Long-term development of functionality of package – Flexibility of Oracle’s being close by (location wise)
  • 19. Taking Approval of the Board  Met with CEO – comment about ‘jobs lost over much lesser amounts of money’  Got CEO’s support  Met with Board of Directors – chairman says ‘show me the money’ as first thing  Board approves project  Single largest project ever undertaken by company  CEO makes project priority for Cisco
  • 20. Implementation Methodology  Prototyping: Rapid, iterative implementation was broken down into a series of phases called CRP’s. •CRP 0: Training and Configuration of Oracle package. •CRP 1: Detail documentation and analysis of each functional area. •CRP 2 & 3: Centralized data warehouse developed. Final Testing with full load of users.
  • 21. CRP 0 Two parallel efforts: – Training the team in the Oracle applications normal 5 day training pushed to two 16-hour days! – Getting the application up and running by a small “tiger team” Configuring the Oracle package  Team members “locked” together for two days  1 % effort with 80 percent accuracy
  • 22. CRP 1  Each track makes the system work within its specific area  Details and procedures were created, for a process  Realized that a lot of business processes were not supported by the software needed modifications Modifications were classified into: • Green •Yellow • Red, needed to go to the steering committee for approval  there were few reds
  • 23. CRP 2  Continued scope change  Major technical issues  Creation of data warehouse for centralized data communication  100-person IT department started recommitting from other projects
  • 24. CRP 3  Focus on testing the full system  Assess readiness to ‘go live’  Captured one day’s worth of actual business data and ‘rerunning’ it on a Saturday
  • 25. The Aftermath  The new ERP system went live on January 30, 1995, but it took two months before it was operating at a reasonable level of quality.  Problematic areas were hardware architecture and sizing.  The point of concern-How is it possible that no one in the team noticed this before?
  • 26. CISCO Systems, until recently  John Chambers, president and CEO: – “Our strong position in the core switching and routing business continues to be complemented by positive momentum especially this quarter in storage, security, wireless and IP telephony.”  Positive Q2 2007 figures: – Q2 Net Sales: $34.9 Billion (24.5% increase year over year) – Q2 Operating Cash Flows: $41.7 Billion
  • 27. Wrap Up Total system replacement: $15 million, 9 months  Initial Problems with Cisco ERP System:  Decrease in Business Performance due to an unstable system  Database lacked capacity to process the required transaction load/volume  Resolution  ERP project status and complete implementation became top priority for the company  Commitment from Oracle, hardware vendor  Long Term Effects:  Added capacity to the system  ERP system would fulfill the promise of supporting the rapid growth that the company expected and desired
  • 28. Wrap Up Continued… Why Successful?  Implementing an ERP system was top priority Best people were on the project  Strong vendor relations and vendor’s determination for success  Very timely Cisco then and now Cisco in 1998 Cisco in 2007 Employees: 14,500+ 61,500+ Market Cap.: $100 Billion+ $194.56 Billion Sales $8.45 Billion+ $34.9 Billion