Cisco Case Study

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About CISCO

• Established in 1984
• Primary product was Router
• In 1997 entered into elite club of fortune 500
• Among top 5 companies in return on investment and in return on assets
• Exceptional growth in 1998 as companies’ market capitalization passed $100 billion mark (15 times 1997 sales)
• Financial year divided into four quarters starting from 1st August

IT Department at CISCO

• Pete Solvik joined as CIO in January 1993
• Running a Unix based software package to support core operating and transactional process of the company
• Package was majorly supporting three functional areas

• Financials
• Manufacturing
• Order Entry

• Biggest customer of the software vendor

WHY ERP

• Company was able to sustain an annual growth rate of 80% and legacy system was not able to handle such load
• Frequent system outages
• Due to inability of system to perform a workaround caused corruption of database which resulted in SHUT DOWN OF COMPANY for  two days

This was the defining moment for the company as after this top management decided to implement ERP. About a month after the shutdown they created a team to do an investigation to replace the application.

IMPLEMENTATION OF ERP – APPROACH

1. Selection of an ERP Product

Major decision which they took and reason behind that:

1. Whom to give responsibility from company

1. It was critically important project
2. Requires heavy involvement from business community to make project successful
3. DECISION → CISCO management pulled out very vest people from their team to do the work

1. How and how many partner to select from Industry

1. There help was needed for the decision of selection and implementation of software
2. Great technical skills and industry knowledge was must
3. DECISION → Chose KPMG as integration partner. KPMG gave their best people for this project. i.e. Program manager for this project was their director of IT.

1. Which software to select

1. One of the most important decision
2. Approach → 

1. Took help from large corporates
2. Guidance of research sources like Gartner group
3. By tapping existing user of package

1. Vendor selection process

1. Systematic and standard procedure
2. RFP

1. DECISION → Oracle was selected as vendor

1. Strong and better manufacturing capability
2. Promise Long term sustainable relationship
3. Flexibility as office was very near by

1. Approval from Board

Two key decisions need to be taken before approaching board

1. COST of the project
2. Timeline / END – DATE of the project

By Systematic thinking and involvement of all partners, taking all factors into consideration they approached board and convinced for project.

Cost: $15 million

 Duration: 9 months

1. Implementation of Building team

Factors need to be considered

• Size of the team
• Role and responsibility of the team
• Organization of team

DECISION

• They picked best and brightest from the firm
• FIVE Tracks
• 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

• Training on oracle to understand technical specification of project
• Two week training
• One small tiger team working on getting application up and running

Result at the end of phase

• Some changes are required in product to fulfil the gap
• Priority of changes

1. CRP1

• Each track to make system work within specific area
• Generate detailed documentation for each process/issue/workaround
• Finding of gaps

Result at the end of phase

• Identified what all modification were required
• Standard document to understand the product
• Feasibility of product to handle the modification

1. CRP2 and CRP3

• Include major modification
• Decide on after sales support package

Result at the end of phase

• A centralize data warehouse to use all CISCO application
• Changed company structure and process according to product

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

• Green signal to System GO-LIVE

1. GO LIVE

• Issue of hardware
• Inability of software to handle volume of transaction

Workaround and solution by Team

• Responsibility of vendor to solve hardware issue (Didn’t increase cost)
• Stress testing was not done which resulted in data leak
• All IT team worked together for next two months to solve all technical issues

Key Reason Behind success

1. No.1 agenda for the company, gave priority across all functional area
2. Company believe in standardization
3. Best people across the industry in the project
4. Team organization and culture
5. Systematic and structured approach in selection of vendor and software
6. Correct estimation and high class project management
7. Highly centralized and top to bottom approach by the company
8. Company adaptability → changed its process where it was difficult to modify the software
9. GAP Analysis, except volume testing they did a good gap analysis