Cisco ERP Implementation and related results about Systems Integration. Project Members: Rohan Kumbhar, Chris Moss, Dhanesh Gandhi, John Hicks and Gouthami Gurram

1. Cisco Systems Architecture: ERP
and Web Enabled IT
____________________________
Christopher Moss * Dhanesh Gandhi *Gouthami Gurram * John Hicks * Rohan Kumbhar

2. Agenda
 Company‟s History & Growth
 Strategy
 Current Application assessment
 Connectivity & Mobility
 Business Process
 Web presence
 Customer Relationship Management
 Conclusion

3. History
 Cisco was founded in 1984 by Leonard
Bosack and Sandra Lerner
 Principal product from inception was the
internetworking router.
 First product shipped in 1986
 Don Valentine, first major investor
◦ Secured investment by demanding a controlling
interest in company
◦ Promptly hired John Morgridge as CEO

4. Growth
 1990‟s companies began installing local area
networks (LANs)
 Tremendous growth opportunities
 John Chambers took over in 1995
 Adopted strategy of Systematic Acquisitions
and Strategic Alliances
 As of April 2008 Cisco had acquired 127
companies – 50% of the company

5. Growth
 The largest acquisition as of April 2008
was Scientific Atlanta
 Arguably the most important Acquisition
was StrataCom, Inc.
◦ $4.67 billion acquisition completed in April
1996
◦ Leading supplier of products capable of
handling voice, data and video

6. Growth

7. Strategy
 Guided by Market Transition
2008-Current
Collaboration
2006-2008
2000-2006 Web 2.0
Network as
Network of Platform Borderless
Networks networks
1997-2000 Mobile IP
All-in-one
(Voice/Video)
1990-1997
End-End and IP based
networks

8. Business Strategy
 Provide Networks and Communication
Solutions
Strategic Objectives
 Lead Cisco entry into key market
 Invest in strategic technologies and partners
 Partner with business units – a strategic advisor
 Talent Management

9. Business Strategy
Business plan
 Assemble a broad product line so Cisco can
serve as one-stop shopping for business
networks.
 Systematize acquisitions standards for
networking.
 Set industry wide software standards for
networking.
 Pick the right strategic partners.

10. Mission & Vision
Vision
“change the way world works, lives, plays and
learns.”
Mission
“to shape the future of the Internet by creating
unprecedented value and opportunity for its
customers, employees, investors and ecosystem
partners.”

11. Goal & Culture
Goal
 Become lead architect and provider for new Internet-based
infrastructure
 Change the way companies and industries operate
Culture
 Sustainability
 Quality team
 No technology religion
 Stretch Goals/ Continuous Improvement
 Teamwork
 Fun
 Trust/Integrity/Giving Back
 Drive change

12. Corporate Strategy
 Product Innovation
 Operations
 Customer relationship

13. Acquisition Strategy
Source: Scheinman, D (2004), „Corporate Development at Cisco‟ Senior Vice President, Dan
Scheinman Viewed at 14/07/06

14. Industry Structure
Bargain Power of Buyer
Potential Entrants • Buyer power in the low end and
•Capital intensive business residential products
•Barrier to entry is high • Other sectors – customer are
•Cisco – proprietary less potential to switch to other
standard in the market brands
•Need to strongly differentiate the
Industry Competitors product and service
•Nortel – VOIP
• Juniper – Internet Routing
• HP – Ethernet switching
• Avaya – Unified Communications
•Huawei Technology – Routers 7 switches
Substitutes
• Highly unlikely because of
Bargain Power of Supplier Brand & Market position
• In-house supply chain •Already an innovator with
• Dependent on Intel for IC customer services, total
customer solutions

15. SWOT Analysis
Strengths Weakness
• Innovation • Unsustainable High gross margin
• Robust financial performance • Weak presence in contact center
• Diverse customer base and product technologies and declining storage
offerings networking market share
• Market position • Relatively weak presence in China
• Extensive geographic reach
CISCO
Opportunities Threats
• Acquisitions • Intense competition
• Strategic alliances • Consolidation in the US
• Growing demand for unified telecommunication industry
communication solutions • Dependence on suppliers
• Growing enterprise security market • Uncertain Global Economy
• No constant innovation currently

16. IT operating Model

17. Current Application Assessment
 Poorly implemented original software
platform.
 Unix-based software package to support
Financial, manufacturing & Order Entry.
◦ Care System
◦ Metrix System
◦ Calico foundation technology

18. Current Application Assessment
 Initial approach to  ERP Solution
Upgrading
◦ Robust
◦ Functional area
responsibility ◦ Reliable
◦ Band-Aiding ◦ Efficient
◦ January 1994
system crashed
Connectivity Needed?

19. Connectivity & Mobility
 What is needed
◦ Standardization
◦ Flexibility
◦ Extensibility
 What are the options
◦ Custom Integrated Systems Architecture
◦ ERP

20. Connectivity
Integrated Architecture
◦ Separate lines of development - EAI
 Systems Integration Plan
 Low-level Connectivity
 IT Infrastructure
◦ Advantages
 Custom solution
 Potentially highly efficient
◦ Disadvantages
 Building a patchwork architecture
 Middleware

21. Connectivity
Integrated Architecture
◦ Separate lines of development - SOA
 Systems Integration Plan
 Low-level Connectivity
 IT Infrastructure
◦ Advantages
 Custom solution
 Potentially highly efficient
 Less middleware
◦ Disadvantages
 Building a patchwork architecture

22. Connectivity
ERP
◦ Systems Integration Plan
◦ Advantages
 All-in-one solution
 IT infrastructure and connectivity baked in
 Less middleware
◦ Disadvantages
 Limited customization
 Difficult (and expensive) to extend

23. Connectivity
Keys to Success
 Open standards
 Proper planning and involvement
 Scalability testing

24. Business Process
 Integrated systems and real-time environment
Infrastructure Challenges
 Traditional IT department did not operate optimally
 Inflexible current systems couldn‟t support Cisco‟s growth
Solution
 IT reporting relationship changed from Accounting to Senior VP
of Customer Advocacy
 Conduct IT budgets at functional level (better funding for all IT
projects)
◦ Disbanded central IT steering committee
◦ IT investment decisions on application projects pushed to line
organizations but executed by central IT

25. Business Process
Business Process
 Convincing Management and many engineers – Change
Management
 End-to end and big bank approach - a great risk
 Need to access the impact of the change and manage user
expectations
Solution
Internal Involvement
 Heavy involvement from the business community – Not just IT
initiative.
 Get very best people and who know the business.
External Involvement
 Strong partner to help the selection and implementation – KPMG
 Get knowledge and experiences from other “Big Six” firms.
 Team training

26. Business Process
Analysis and Process Design
• External Partners – KPMG
• Best people who knows the business
• Oracle –ERP training
System Integration
Review & enhance • Set the parameters for
• Unable to handle the load Oracle to be integrated
• 3 months to enhance and • Focus on getting the
stabilize the system application up and running
Pilot & Testing
• Conference Room Pilot

27. Process
 Oracle ERP
◦ Manufacturing capability
◦ Long-term development of functionality of package
◦ Flexibility of Oracle‟s being close by (location wise)
 15 million budget and 9 month to implement

28. Oracle ERP

29. Analysis & Recommendations
 No proper Business case or Cost
Analysis
 Downtime not considered
 ERP Implementation time frame of 9
months?
 Big bang approach of critical systems
 1% effort gave 80% accuracy
 Impact of pulling key resources from the
projects?
 Oracle first implementation of the new

30. Analysis
 Standardization promoted flexibility
◦ R&D and marketing reorganized from multiple business units
to 3 lines of business
◦ Changes completed in less than 60 days for less than $1M
◦ Completion of IP-based open standards architecture initiative
provided centerpiece of Cisco IT architecture
◦ Next phase of strategy - incorporating the “Internet”

31. Web Presence
 Internet Strategy
◦ To create a business ecology
◦ To coordinate a virtual organization
 Concentrate on product innovation
 Outsource other functions
◦ To showcase its own use of the internet
as a marketing tool

32. Web Presence
 Benefits
◦ 24*7
◦ Improved customer service
◦ Reach new markets
◦ Automation, Productivity and Profitability
◦ Customer feedback
◦ Improved advertising

33. Web Presence
 Conceptual framework
Strategic focus Competitive Competitive success Structure and
environment factors management
Product Innovation First mover advantage Innovation, new Focus resources on
product introduction, R&D and acquisition
Strong brand
Operational Decreasing or Execution is the key Increase scale and
Excellence constant returns geographic scope
Customer High customer Keys are to attract and Focus resources on
relationships acquisition cost. retain customers. marketing, sales and
Possible increasing customer service.
returns from loyal
customers.

34. Web Presence
 Cisco‟s web-based applications
Intranet Extranet Internet
Employee self-service for Supply chain integration, marketplace for net commerce
travel, benefits, product sharing of forecast, order and by customers, resellers,
information inventory information partners
Communication and distance New product development Technical Assistance, software
learning sharing of design, test ramp- Library and Open Forum for
up, quality specification customers, resellers, partners
information
Collaboration and workflow Customer service for non-
management technical issues
Executive information Internetworking Product
systems and decision support Center online ordering by
systems authorized customers and
resellers

35. Collapse of 2001
 Reasons
◦ Collapse of many internet companies.
◦ Decline in demand for IT equipment
 Analysis
◦ IS took time to pick up the market
changes.
◦ Inability of sales forecasting system to
offer any advanced warnings.

36. Customer Relationship
Management
CRM is a business strategy directed to
understand, anticipate and respond
to the needs of an enterprise's current
and potential customers in order to grow
the relationship value

37. CRM Success Factors

38. CRM - Acquire
How Cisco
 Obtained executive sponsorship
◦ Extensive interactive sessions with CEO‟s
◦ Providing customized deliverable
solutions
◦ Aligning business processes with right
technology

39. CRM - Retain
 One stop solution for communication
needs www.cisco.com
◦ Tutorials
◦ Trouble shooting
◦ Catalogs
◦ Purchase orders
◦ Forums

40. CRM - Extend
 Investment in R&D
 Combined solution- Buying 20% of
KPMG
 Social media presence
 Investment in Research Analysis

41. CRM – Key Problems
Acquire
• Competition
• Targeting smaller customers
• Cost effective solutions
• Compatibility issues

42. CRM – Key Problems
Retain
• Antiquated solutions?
• Delays in integration
• Arm twisting techniques
• Accelerated innovation lacking

43. CRM – Key Problems
Extend
• Innovation
• Moving beyond legacy solutions
• Adaptability

44. Conclusion
 ERP and web enabled applications led
to +$550 million in savings
 $2.5 billions write off in parts inventory
in its warehouse

45. References
 http://www.technewsworld.com/story/35961.html
 Cisco Systems company SEC filings 1995-2011
 www.cisco.com
 http://www.forbes.com/sites/panosmourdoukoutas/2011/09/13/two-
strategy-lessons-for-cisco-systems/
 http://newsroom.cisco.com/dlls/2009/ekits/PublicCorporateOverview_Bl
ackBackground_Eng_2010Q1.pdf
 http://airccj.org/CSCP/vol1/csit1235.pdf
 http://gsbapps.stanford.edu/cases/documents/EC%2015.pdf
 http://www.personal.psu.edu/users/b/j/bjb261/ist110_bjb/In%201994-
2.html
 http://www.cisco.com/web/about/ciscoitatwork/business_of_it/erp_manu
facturing_and_finance.html
 http://hbswk.hbs.edu/archive/3141.html
 http://www.ciol.com/Networking/Feature/HP-3Com-merger-marks-end-
of-Cisco-dominance/121109127626/0/
 http://www.huffingtonpost.com/2011/04/06/ciscos-ceo-vows-bold-
changes_n_845623.html
 http://marketingteacher.com/lesson-store/lesson-crm-business-
strategy.html

46. Thank You!