MGB 207 – Team 3 Cisco ERP implementation case Joann Suen Seema Sangari James Sun Sekhar Varanasi. Founded in 1984, IPO in 1990 Primary product at that time-router High growth company-return on revenues and on assets First acquisition –Crescendo communication in Sept 1993
Cisco ERP implementation case
Primary product at that time-router
High growth company-return on revenues and on assets
First acquisition –Crescendo communication in Sept 1993
By 1997, its first year on the Fortune 500
On July 17,1998, market cap passed the 100 billion mark
Running a UNIX-based software package to support core transaction processing
Function areas supported by the separate packages -financial, manufacturing, order entry systems
Only core IT infrastructure spending was centralized and budgeted out of general overhead accounts
Most IT expenditures delegated to individual business unit-Client Funded Model
Background - Cisco IT
“It had become too much spaghetti, too customized”-Pete Solvik
The original upgrade/patch approach made little progress, system outage became routine, hard to recover from outage
It would take too long to get applications in place by making decision and implementation separately within group
It would take a lot longer to implement a too customized system to end up as a mega-project
Systems were on the brink of total failure
Background - Cisco IT
How did Cisco do……?
Expenditures (US$ Millions)
Company sales (US$ Billions) *source AMR research
Boy! How do I tell ya…Cost of ERP is like weather
% of respondents from 479 US manufacturing companies surveyed by AMR research 1994
By the way Cisco kept it to minimum
Structure of Project Team: Sought the best people;
5 Track teams -> PMO-> Executive Steering Committee
Implementation partner – KPMG
KPMG had both the technical skills and business knowledge; helped in selection and implementation of ERP solution
Incentives: Reward for the ERP Team - Over $200,000 cash bonus. Success had a huge upside while failure meant threat of job losses.
Prototyping: Rapid, iterative implementation was broken down into a series of phases called CRP’s.
CRP 0: Training and Configuration of Oracle package. Approach - 2-days offsite and 80-20
CRP 1: Detail documentation and analysis of each functional area. Needed another package to support after-sales.
CRP 2 & 3: Centralized data warehouse developed.
Final Testing with full load of users.
Pete Solvik, CIO of Cisco
KPMG –Implementation Partner