Cisco implemented an ERP system to address issues with its existing systems, including a corrupted database that caused a two-day shutdown. The $15 million ERP implementation was completed in nine months by forming a dedicated team, narrowing the vendor options quickly, and working closely with Oracle as the selected vendor. Cisco also invested $100 million to enable the ERP system through a web-based architecture for benefits like improved employee and customer services. While security was a risk, the $506 million in cost savings justified the overall $115 million expenditure.

1. PRAXISBUSINESSSCHOOL
CASE REPORT ON
CISCO
Submitted to
Prof. Charanpreet Singh
PRESENTED BY:
AVISHEK MEHRA
GANESH AGARWAL
GAURAV AGARWAL
PRASHANT MADHOGARIA
SOURAV MADHOGARIA
ZEESHAN MOHAMMAD

2. The decision to implement ERP:
The reason which acted as a catalyst, forced Cisco to no longer ignore the loop holes in its
existing system and implement ERP was the fall out of its existing system. The decision to
implement ERP is justified as it has increased the operational efficiencies to the optimum
level by standardizing the whole process, making the system robust and thus increasing the
scalability of the system making it almost future proof. The other reasons that cement the
stance taken by Cisco to implement ERP are as follows
Traditional IT department did not operate optimally.
Inflexible current systems couldn’t support Cisco’s growth.
Corrupted Cisco’s central Database (Two-day company shutdown)
Exposed need for alternative approach (autonomous approach to systems
replacement deemed insufficient)
Autonomous approach to systems replacement was slow and insufficient.
To overcome all the above reasons were a hurdle for Cisco’s goals which were to become
lead architect and provider for new Internet-based infrastructure and change the way
companies and Industries operate.
Therefore, Cisco’s decision to implement ERP was justified.
Key factors that enabled Cisco implement the system in nine months:
Team strategy
Build as much knowledge as possible (leverage experience of others)
Ask for help from large corporations and big 6 accounting firms.
Tap research sources (i.e. Gartner)
Cisco narrowed field to 5 packages in 2 days
Evaluated packages at a high-level.
Chose between Oracle and another major player.
Decision based on size (did not want a company smaller than Cisco)
Worked with business community (not an IT-only initiative)
KPMG = integration partner
 KPMG saw project as opportunity to build a business around
implementing these applications.
 Brought very experienced people into the project.
Internally, Cisco pulled best people out of their jobs into the project.
RFPs (request for proposals)
Spent 10 days on RFP, vendors had 2 weeks to respond.
Cisco team researched on client past performance (reference clients)
Vendors invited to 3-day software demonstration.
Candidates had to show how they could meet Cisco’s requirements.
Oracle won the project
Decision based on 3 major points.
 Project was manufacturing driven & Oracle had a better manufacturing
capability.
 Oracle promised long-term development of functionality.
 Flexibility offered by oracle’s being close by.
Cisco believed that Oracle was motivated to make the project a success.
 Cisco project is 1st major implementation of a new release of the
Oracle ERP product.
 Oracle touting new version as having major improvements.
 Success would be favorable for both parties.

3. Benefits of the Web Enabled architecture at CISCO:
Employee Self-Service – Internal Applications.
 Majority of internal applications web-enabled.
 Corporate Intranet (Cisco Employee Connection, CEC)
- Provided centralized access to information.
- Provided tools and resources needed to streamline processes.
- Facilitated knowledge exchange.
- Maximized employee productivity.
 Leveraged web to revolutionize existing processes and create new end-to-
end capabilities.
 By 2001, virtually every application in the company used a web browser as
the only user interface.
Communication and Distance Learning
 Network enhanced ability to communicate with employees and added
important dimension to training.
 Distance learning was made available to Cisco employees.
 Tracking capability effective as a measure of as organization’s changing
needs.
Customer Self-Service – Electronic Connection with Customers
Customer as the focal point.
 Cisco.com
1. Answers customer questions.
2. Diagnoses network problems and Provides solutions.
3. Provides expert assistance worldwide.
80% of technical support for customers and resellers delivered electronically.
Improved customer satisfaction.
Net Commerce – Shipping product over the Internet
Cisco = Pioneer at using internet for full electronic commerce.
Allow customers to place orders from anywhere in the world.
Order status can also be obtained online.
Productivity gains for all online commerce players.
Cisco’s Supply Chain Management Initiative
(1992) outsourced much of its manufacturing to contract manufacturers while
performing final assembly and test.
Recently, focused on core competencies in design and fulfillment processes
rather than physical transformation of product.
Formed partnerships with suppliers that performed physical transformation as
their core competency.
Automated supply chain involved 5 initiatives.
Single Enterprise.
New Product Introduction.
Auto test.
Direct Fulfillment.
Dynamic Replenishment.
EIS (executive information systems) and DSS (decision support systems)
Employees use web browser as front end access to all executive and
decision support information in the company
Web-based EIS system used by all sales managers and executives

4. Drawbacks of the Web Enabled architecture at CISCO:
Security breach was a threat as this interconnected model was vulnerable
to internet hackers.
Cost involved in web enabling was $100 million which was huge compared
to the cost involved in ERP implementation which was only $15 million.
As a CIO I would have definitely gone the same way but also ensured that the security
issues are given priority and tackled properly.
Cisco’s expenditure incurred in implementing the web enabled architecture:
Cisco wanted all their processes to be standardized and robust so that the scalability is
improved. They decided to implement ERP for this and chose to enable it using web
instead of EDI. The cost they incurred was $100 million dollars and another $15 million
dollars for implementing ERP.
This expenditure, though at a large scale, is justified as the cost saving amounted to
$506 million which is more than 5 times the expense incurred. Also, the following
advantages were the result of this decision:
It gave Cisco a direct competitive advantage over others as implementation
of internet business solutions put them ahead of time and made them
technologically very advanced.
Employees could be trained in a cost effective manner through the use of
self service applications.
Dynamic Replenishment reduced delays and errors, and saved them $275
million through increased profitability.
The approach was correct in the sense that the implementation of this required huge
investment and called for risk taking ability but the company went ahead with this keeping
the long term benefit in mind.
Breakdown of Implementation Costs for Cisco ERP Implementation
Hardware 32%
Headcount 14%
System Integration 38%
Software 6%