Enterprise Resource Planning

Institute of Management

Nirma University

Enterprise Resource Planning

Case write up- Cisco Systems, Inc.: Implementing ERP

Submitted By: Meesha Chatterjee (137135)

                        Vibhu Malaviya (137165)

Submitted to: Prof. Nityesh Bhatt

About CISCO

• Established in 1984 with Router as their primary product.
• By 1997, entered into elite club of fortune 500 and became one of the top5 companies in retur on investment and return on assets.

IT Department

• Pete Solvik joined as CIO in January 1993
• They were running a unix based software package to support core operating and transactional process of the company.
• Package was majorly supporting 3 functional areas –

• Financials
• Manufacturing
• Order entry

Why ERP

• The company was able to sustain an annual growth rate of 80%, and legacy system was unable to handle such load because of which there were frequent system outages.
• This inability of the system to perform a workaround, caused corruption of database which finally resulted in shutdown of the company for two days.
• This became the defining moment for company’s top management to take the decision of implementing ERP.

Implementation if ERP

1. Selection of an ERP product

Major Decisions Taken –

• Pulled out very vest people from their teams for implementation
• Chose KPMG as integrated partner. KPMG saw the opportunity and gave their best people for this project.
• Took the help and guidance of large companies and research sources like Gartner group and sending out RFP to vendors, finally selected Oracle as a vendor.

1. Approval from Board

• Two decisions necessary to be put in front of the board –

• Cost of the project
• Time line of the project

Through systematic research, taking all factors into consideration the cost was estimated to be $15 million and the duration was taken as 9 months.

1. Implementation of Building Team

• 5 Tracks (Process area teams)
• TRACK –

• Cisco Information system leader
• Cisco business leader
• Business and IT consultant (Oracle/KPMG)
• Additional personnel from business as team member
• Project Manager

Implementation of Oracle

1. CRP0

• 2 week training on oracle to understand technical specs.
• One small tiger team working on getting application up and running

Results –

• Changes were required to fulfil gaps.
• Priority of Changes

1. CRP1

• Each track to make system work within specific area
• Generate detailed documentation for each process/issue.

Results-

• Identified all the required modifications
• Standard document to understand the project
• Feasibility of product to handle the modification

1. CRP2 and CRP3

• Included all the major modifications
• Decide on after sales support package

Results-

• A centralised data warehouse to use all Cisco applications
• Changed company structure and process according to product

• Renumbered the product
• Changed Bill of material structure
• Changed most data according to new system

• Green signal to system GO-LIVE

1. GO LIVE

• Hardware issues
• Inability of software to handle the volume of transactions.

Workaround by team

• Responsibility of vendor to solve hardware issue (without increasing the cost).
• Stress testing not done, which resulted in data leak.
• All IT team worked together for the next two months to solve all technical issues.

Q1. What factors had made the difference between success and failure of Cisco ERP project?

• No shortage of funds, since the growth rate was huge and so were the revenues.
• Enthusiastic employees; agreed to change and adapt to the new environment along with putting great efforts to make the ERP project work.
• Support from the top management became one of the major reason for success of the project.
• Choice of selecting KPMG as the integration partner as well as Oracle as the implementation partner. Both were keenly interested in building up a successful ERP system.

Q2. Where had they been smart?

• The initial decision to implement ERP project became a major decision
• Selection of the team for implementation of the project.
• Selection of KPMG as an integration partner.
• The program manager from KPMG that headed the project was previously the director of an IT company that had put in various parts of the ERP system.
• Proper planning was done in phases (CRP) which enabled better control and timely completion of the project.

Q3. Where had they been just plain lucky?

• No major accident took place from the loss or leakage of data during cut-over.
• The team they chose proved to be very efficient and hardworking.
• The failure of legacy system at the time when the team approached board for approval of ERP project.

Q4. Do you think the CISCO team can do such a project again if they had to?

• Yes I think Cisco can handle such a project again. Few of the major reasons are –

• Smart and hardworking workforce.
• Support of the top management
• Technical Knowledge
• Huge amount of resources

ERP Life Cycle – Implementation and Support Activities at CISCO Systems

1. Pre implementation Activities

• Selection of integration partner - KPMG
• Seeking guidance from “Big Six” and the Gartner Group
• Preparation of RFP to send out to vendors
• Conducted due diligence by visiting a series of reference clients
• Demonstrations conducted by each vendor
• Deciding on a budget of $15 million
• Getting the budget approved by the boards

1. Project preparation

• CISCO chose the best people to be a part of the implementation team
• Establishing Project Management Office and the Steering Committee
• Well defined structure of the team
• The project was made as the company’s top seven goals for the year.
• The implementation strategy was to do everything at one, instead of going for a phased implementation.
• The first task of the teams was to undergo rigorous “immersion” training in two 16 hour days for the entire application suite

1. Business Blueprinting

• The team realized during CRP 0 that they needed significant number of changes for the software to run effectively.
• Documentation of all issues.
• Modifications tagged colour coded (Red, Yellow and Green) according to the severity.
• Each of the modifications went to the track leads and anything that was Red had to go the Steering Committee for approval.
• Customers and products were renumbered and bill of material structure was changed

1. Realisation

• Customization of the system.
• As a development for gaps another service support package for after sales support was chosen and its implementation also began.
• Testing of the system, both hardware and software, to see how well it would stand up to the processing loads and the transaction volumes required to run Cisco’s growing business.
• A final test was conducted with a full complement of users to see how the system would perform front to back, with a full transaction load.

1. Final Preparation and Go live

• The cut over was scheduled for February after complete testing.
• The functional leads presented their piece of the process and said “yes” or “no” on whether they were ready to go.

1. Support

• Continues vendor commitment and support from Oracle, the hardware vendor, and KPMG, the integration partner led to an eventual stabilization of the software and improved performance.
• The president of the hardware vendor was their executive sponsor