Cisco Systems Architecture

1. Cisco Systems Architecture ERP and Web-enabled IT Eric Nguyen JericaCandalla Duane Gonzales Matthew Wurst Roman Troyano David Allen

2. Background • Founded by 2 Stanford computer scientists in 1984 • 1997 – First year in Fortune 500 • Brought public in 1990 • Passed $100 billion in 14 years • Core focus is routers

3. Cisco Top Management Business Strategy • Don Valentine, initial VC for Cisco • Reserved right to bring in professional management • After 1990 IPO both founders sold their stock and left Cisco • John Chambers became CEO in1995 after coming from Wang Laboratories in 1991 • Plan with 4 elements: • Broad product line • Systematize acquisitions • Set industry wide software standards for networking • Pick the right partners

4. Building Cisco’s IT Infrastructure Peter Solvik Changes • Came from Apple in 1993 • Gave 2 key challenges • IT department was too traditional • Too internally oriented • IT reporting went to Senior VP of customer advocacy • IT budget was returned to functions • Central IT steering committee was disbanded

5. A Defining Moment • Cisco’s legacy system failed in 1994 • Shut down for 2 days

6. Discussion • How should Cisco proceed? • Should they make adjustments and improve their current system? • Should they outsource to a different company? • Should they begin development of in-house software? • Why?

7. Question • With such a large company, changes to the legacy system could potentially cripple their business structure. Did Cisco decide to implement changes one at a time or all at once? And why? Answer • Implementation wouldn’t be phased • Would be done all at once • No customization to make implementation a priority

8. Selecting an ERP product Vendors • 10 days writing Request for Proposals • Given 2 weeks to respond • Invited in for 3 days to demonstrate software • Given sample data • Entire decision process took 75 days

9. Discussion Answer Who are some of the vendors Cisco considered and why? • Oracle:stronger manufacturing capability, made long term development promises regarding functionality, flexibility offered by closeness • SAP AG: one of the largest business software companies • PeopleSoft, Inc. : HRMS, FMS, SCM, CRM, & EPM • J.D. Edwards & Co: OneWorld ERP system

10. Going to the Board Questions Posed Board’s Reaction • How much would it cost and how long would it take? • Negative initial reactions • Board eventually approved the project. • Next step was to incorporate the internet • Original proposal was 15 months, then 5, but started in Q3 and wanted to be stable by Q4 • Officially committed 9 months and $15 million for the project

11. Discussion Would the strategy employed by Cisco at the time work successfully today? Would such a budget and stringent timeline give trouble to a modern company?

12. Applications and Benefits Internet & Extranet • Began development in early ‘90s • Shifted from Mosaic to Netscape browser • Cisco connection online • 3 year investment • $115 million • $100M for web enablement • $15M for ERP

13. Internet Cisco’s Supply chain management • 5 initiatives to automate • Single enterprise • Used networked apps • New product introduction • Automated process for gathering product data • Autotest • Inventory displayed in real time • “Global Networked Business Model” • Extranet supply chain • Information transparency • Outsourced manufacturing

14. Internet • Customer self service through website • 80+% tech support delivered electronically • Saved $506M annually • 70% employees have a bonus multiplier that are attached to customer satisfaction surveys • Marketing through web • Net commerce through web • 90% software upgrades via internet • Productivity gains of 60% for Cisco & 20% for customers • Any place access through the web

15. Intranet Applications • EIS & DSS • Executive & decision support, sales tracking & reporting went through the intranet • Employee self service • Cisco Employee Connection (CEC) • Resources for 40k+ employees • Web browser interface • Collaboration & workflow management • Web-enabled legacy systems

16. Question Answer • Communication & distance learning • Cisco tailored version of My Yahoo! • Used “push” technology • Strengthened culture • Whose website format did Cisco have their intranet tailored to?

17. Integrating Acquisitions into IP-based IT Architecture KPMG acquisition • 2/3 technology internally developed • 1/3 from partnerships/ acquisitions • 70% CEOs from acquired companies were retained at Cisco • Acquired companies for their R&D • Acquisitions integrated 60-100 days • Purchased ~20% KPMG’s global consulting arm • 1.05 Billion

18. Beyond Cisco KPMG acquisition • KPMG retained 80% equity • Used capital to build 6 tech. centers • 4K consultants for Cisco’s clientele • KPMG was part of the decision process with Oracle so it was only natural for the acquisition.

19. Where is Cisco now? Acquisitions Key Acquisitions • Focused on 3 pillars: Build, buy, & partner • Growth strategizing on identifying and driving market transitions • Acquisitions are segmented into: • Market acceleration • Market expansion • New market entry • 1993 – Crescendo • Ethernet market entry • 1999 – Monterey Networks • Optical transport market entry • 2003 – Linksys • Consumer networking • 2005 – Scientific Atlanta • Set top boxes for Cable TV • 2012 Litewire, Inc. • Optical interconnect tech.

20. Where is Cisco now? Core Competencies • Kept design and fulfillment throughout economic struggles until 2009 • Set 30 core focuses to take advantage of new opportunities of other companies who were cutting back • 2011 Cisco realized it wasn’t meant to be a consumer company • At the beginning of 2012, Cisco narrowed down their list of 30 to 5

21. Where is Cisco now? Intranet 2002-2006 Intranet 2006-2008 • Unified Intranet • Consistent UI • Unified navigation • Integrated enterprise news • Streamlined intranet development • Period enabled: • Informed workforce • Corporate communications • Efficiency • Collaboration tools • Democratizing publishing • Communication vehicles • Blogs • Personal • Project/Team • Executive • Discussion forums • Wikis • Enabling communication & collaboration

22. Where is Cisco now? Intranet 2008-2011 Intranet 2011- Present • Focused on personalization and customization • Integrated workforce experience • “Me” is the key focus • New Work • Find projects & initiatives they want to work on advertized in a marketplace • Activities within workplace community • Flexibility & adaptability

23. Where is Cisco now? Extranet • My Cisco • Platform module • My Cisco pull down • My Cisco Workspace • Multiple access levels • Accessible 24/7 for 83 countries • Training & Events • 5 levels of IT certification • 8 different paths • 3 distinct markets • Enterprise • Small business • Home

24. Where is Cisco now? Extranet • Support • Product support • Downloads • Contact • Tools • Forums • Security Advisories • Partners • Channel Partner Program • Resale channel • Managed services channel • Outsourcing channel • Cloud partner network • Global partner network

25. Question • Where are the other competitors that Cisco was considering presently? • J.D. Edwards & Co. was purchased by PeopleSoft, Inc in 2003 • PeopleSoft, Inc. was purchased by Oracle in 2005 • SAP is currently one of the largest business software competitors and in the top 3 of highest revenue independent software provider. Answer

26. Discussion If Cisco had decided to go with another company that was acquired by Oracle, would Oracle still consider providing support for the original implementation methods? Or would they have Cisco convert all together? What would be the reasoning behind each?

27. Discussion SAP vs. oracle: Which would’ve been the better choice? • SAP • Mostly in-house solutions • Enhancing core product offerings • Standardized • Leader in actual business benefits realized • Oracle • Solutions mostly presented through acquisitions • Moving toward Fusion middleware (OFM) • Flexible • 20% cheaper • Highest satisfaction (2008 study)

28. Discussion Should Cisco be moving towards SOA if they aren’t already?