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CISCO SYSTEMS, INC.

CISCO SYSTEMS, INC. Implementing ERP. Hector Ocegueda The Contemporary Firm Dr. Minder Chen MBA – November 2010. CORPORATE HISTORY. Founded in 1984 by Len Bosack & Sandy Lerner, Stanford computer scientists. Creators of the Router.

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CISCO SYSTEMS, INC.

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  1. CISCO SYSTEMS, INC. Implementing ERP Hector Ocegueda The Contemporary Firm Dr. Minder Chen MBA – November 2010

  2. CORPORATE HISTORY • Founded in 1984 by Len Bosack & Sandy Lerner, Stanford computer scientists. • Creators of the Router. • By 1997 Cisco was ranked among the top 5 in Return on Revenues and ROA by Fortune 500. • By 1998 its market capitalization reached the 100 billion mark just behind Microsoft and Intel. • Don Valentine, venture capitalist hires John Morgridge as CEO. • Cisco becomes public in 1990, original founders depart from company.

  3. HISTORY OF IT @ CISCO • Peter Solvik joined Cisco in 1993 as the company’s new CIO • Cisco was a 500 million Co. running a UNIX based • software package to support Manufacturing, Finance and Order Entry systems. • Solvik’s experience and company’s significant growth prospects convinced him that Cisco needed a change.

  4. DEFINING MOMENTS • Richard Pond, Director of Manufacturing was concerned in regards to the current legacy systems, system outages became routine. • Legacy Environment fails dramatically. • Solvik, Pond and other managers concluded that another approach was needed.

  5. SELECTING THE ERP PRODUCT - Consistent with the need of a strong Cisco team, the company would need strong partners and vendors. • Mark Lee, PM for KPMG helped select the ERP product. • The team’s strategy was to build as much knowledge as possible.

  6. ORACLE’S ADVANTAGE VS. OTHERS Better manufacturing capability. Deep commitment for long-term development of functionality of the product. Flexibility offered by Oracle’s being close by.

  7. GOING TO THE BOARD • - Cisco had little choice but to move. • We replace our current systems with one ERP solution. • Commit in a time frame between 5 to 12 months. • At 15 mil. the single largest capital project ever for Cisco. • The board ended up approving the project.

  8. $15 MILLION BREAKDOWN IMPLEMENTATION DATES

  9. BUILDING THE TEAM • Increase from 20 to 100 team members. • Team divided in tracks, and supervised by personnel from KPMG & Oracle. Executive Steering Committee Program Management Office Order Entry Track Manufacturing Track Finance Track Sales/Reporting Track Technology Track Business Lead Business Lead Business Lead IT Lead IT Lead IT Lead IT Lead IT Lead Business Consultants Business Consultants Business Consultants Business Consultants Business Consultants IT Consultants IT Consultants IT Consultants IT Consultants Users Users Users

  10. IMPLEMENTING ORACLE - STRATEGY: Conference Room Pilots (CRP) CRP0 OBJECTIVE: Training the implementation team on the Oracle application and setting up the technical environment. CONCLUSION: Cisco would not avoid modification of the ERP software, some changes would be require to fit its business.

  11. CRP1 OBJECTIVE: Making each track made the system work within their specific area. CONCLUSION: There were huge number of business processes that the software could not support which led to unplanned changes in the project plan and budget. CRP2 OBJECTIVE: Expanding project scope to include major modifications, and a new aftersales support package. Utilizing data warehouse would allow all of Cisco applications to access a single course for their information needs. CONCLUSION: Deepening its understanding of the Oracle and service packaging.

  12. CRP3 OBJECTIVE: Testing the full system with a full transaction load and all users involved and assessing the company’s readiness to GO LIVE. CONCLUSION: Ready for Cut-over!

  13. CUTTING OVER TO THE ORACLE • - Performance plummeted as users dealt with a new system. • - The Hardware architecture and sizing. • The ability of software itself to handle the transaction volume required in the Cisco environment.

  14. AFTER STABILIZATION • Problems proved to be short lived. • 3 months to stabilize system w/addition of capacity. • New information system would fulfill and support the rapid growth of the company. • Big Celebration party and a bonus of over 200K for the team!

  15. ANALYSIS AND CONCLUSION RISKS • Very complex project. • Limited time for implementation vs size of ERP system. • Invest heavily in a new ERP system. • Insufficient testing due to very few data. SUCCESS • Efficient decision making. • CRP phase procedure helped revise and improve their decisions. • Selection of effective professional partners like KPMG. • Effective team management contributing on meeting deadlines on such a tight schedule. • Efficient modifications and re-engineering to fit the system for better performance.

  16. QUESTIONS • Which functions did Cisco’s previous application package supported mainly? • Project Marketing, R&D • Supply Chain Management • Manufacturing, Finance, Order Entry • Purchasing, Inventory Control • - Which was NOT an advantage from Oracle to implement Cisco’s ERP system? • Better manufacturing capability • Development and functionality of the product • Proximity to the company’s headquarters • Largest vendor interviewed • - Mention which Conference Room Pilot (CRP) had to include major modifications to the overall ERP project? • CRP2 • CRP1 • CRP3 • None of the above

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