The document discusses a case study analysis of Cisco Systems' implementation of an ERP system. Cisco's CIO Pete Solvik had $200,000 remaining in the ERP budget to reward the implementation team for their work. Cisco had a history of decentralized systems that failed dramatically in 1994, showing the need for an ERP system. Cisco selected Oracle as its ERP vendor after an RFP process, prioritizing Oracle's manufacturing capabilities, promises of functionality development, and proximity to assist with implementation. The team delivered the new ERP system, replacing all core systems, in an unprecedented short timeframe of just five months.

1. Cisco Systems, Inc.:
Implementing ERP
Case Study Analysis by:
Djadja Achmad Sardjana
STMB -Biztel
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2. Case Facts: Introduction
• Pete Solvik, Cisco Systems ClO,
considered the last remaining line item of
his ERP implementation budget.
• Cisco had a history of rewarding
performance with cash bonuses.
• The amount allocated for rewarding the
ERP team, over $200,000, was
unprecedented.
• To be sure, they had delivered a lot in a
time frame that no one had believed
possible It had not been easy either.
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3. Case Facts: Cisco History
• Cisco Systems, Inc.:
– Founded by two Stanford computer
scientists in 1984
– Became publicly traded in 1990.
• By 1997, its first year on the Fortune 500,
Cisco ranked among the top five companies in
return on revenues and return on assets.
• On July 17, 1998, Cisco’s market
capitalization passed the S100 billion mark
(15 times, 1997 sales).
• In 1988, Valentine (One of major
shareholder) hired John Morgridge as CEO.
• Morgridge believed that many Silicon Valley
firms decentralized too quickly Loosing
Control
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4. Case Facts: Cisco History
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5. Case Facts: Cisco IT History
• Pete Solvik joined Cisco in January 1993 as
the company’s new CIO.
• At the time, Cisco was a $500 million
company running a UNIX-based S/W.
UNIX-
• Solvik’s initial inclination was to avoid an
ERP solution planned to let each functional
area make their own.
• Keeping with Cisco’s strong tradition of
standardization functional areas use
common architecture and databases.
• Solvik’s objection to ERP solutions was also
born out of concerns about the types of
“megaprojects” that ERP implementations
often became.
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6. Problems:
• Just run over the legacy systems had in
place Constantly band-aid existing
band-
systems.
• The systems replacement perpetuated
the deterioration of Cisco’s legacy
environment.
• January of 1994, Cisco’s legacy
environment failed so dramatically the
company’s systems were on the brink of
total failure.
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7. Recommendation:
Selecting an ERP Product
• Cisco’s realized that implementing ERP would require
heavy involvement This could not be an IT-only
IT-
initiative.
• Consistent with the need for a strong Cisco team, the
company would also need strong partners KPMG
• With KPMG on board, the team turned to the software
market with a multi-pronged approach for identifying
multi-
the best software packages.
• The team spent 10 days writing a request for proposals
(RFPs) to send to the vendors Oracle win.
• Selection of Oracle was based on three of the major
decision points:
– First, this project was being driven pretty strongly
by manufacturing and Oracle had a better
manufacturing capability than the other vendor.
– Second, they made a number of promises regarding
the long-term development of functionality in the
long-
package.
– The other part of it was the flexibility offered by
Oracle’s being close by.
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8. Strategic Questions:
• How much would it cost?
• How long would it take?
• How long should it take to do a
project to replace all of our core
systems?
• As requested by systems
production, can do it in five
months?
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