describes the need for cisco ERP iplementation and its effects on organization

1. ERP Implementation at
CISCO
Group 8
Saili mane (12IT113)
JAY SHAH (12IT126)
ANURAG PATEL(12IT117)
CHINMAY JOSHI (12IT112)
BHARGAV PATEL (12IT118)

2. The Concept of ERP
 ERP software ties all departments in a
company together into one common
system
 ERP allows Information Technology to
integrate with your company's core
business processes to achieve specific
business objectives
 Information Technology
 Core Processes
 Specific Business Objectives

3. Major ERP Suppliers
The Top Five ERP Vendors
1. SAP
2. Oracle Corporation
3. Peoplesoft, Inc.
4. JD Edwards & Company
5. Baan International

4. Benefits of ERP
Improve productivity
Increase customer demand (sales)
Increase competitive advantage
Increase market share
Position company for sale

5. Business Drivers for ERP
improving
productivity
31%
customer
demand
24%
competitive
advantage
16%
others
29%

6. How Does ERP Improve the
Business?
ERP helps improve information sharing,
enhance business performance, and
promote service efficiency
1. Allow companies to better understand their
business.
2. Helps companies standardize business
processes and more easily enact best
practices.
3. More efficient processes enable companies
to concentrate their efforts on serving their
customers, maximizing profit, and building a
competitive advantage.

7. ERP Cost/Benefit Analysis
 Average Cost for ERP
Among the 63 companies surveyed—including
small, medium and large companies in a
range of industries—the average cost for an
ERP implementation was $15 million.
 Average Payback for ERP (Time & Dollars)
Among the 63 companies surveyed, it took
eight (8) months after the new ERP system was
implemented to see any benefits. The median
annual savings from a new ERP system was
$1.6 million.

8. ERP Strategies
1. The Big Bang-companies cast off all their legacy
systems at once and install a single ERP system across
the entire company.
2. Franchising-Independent ERP systems are installed in
each unit, while linking common processes, such as
financial bookkeeping, across the enterprise.
3. Slam Dunk-ERP dictates the process design in this
method; where the focus is on just a few key
processes, such as those contained in an ERP system's
financial module. The slam dunk is generally for
smaller companies expecting to grow into ERP by
initially purchasing only a few modules.

9. ERP Implementation
Procedure
Steps for ERP implementation
 Cost analysis
 Blueprinting of Business Processes
 Staff Training
 Integration
 Data Conversion
 “Going Live” with ERP

10. CISCO Systems Inc.
 It was founded by two Stanford computer scientists in
1984.
 It subsequently went public in 1990.
 It manufactures routers.
 With rise in internet usage, the demand for Cisco
products grew rapidly.
 Fortune 500 ranked Cisco among top 5 for return on
revenues and assets. Microsoft and Intel were the
other big companies in this list.

11. Company Structure
 John Morgridge was appointed CEO in 1988.
 Worldwide leader in networking for the
Internet
 Provide Internet Protocol-based (IP)
networking suite of solutions
 Cisco solutions are in most corporate,
education, and government networks
worldwide

12. Core Product Offering
 Cisco provides the broadest line of
solutions for transporting data, voice,
and video within buildings, across
campuses, or around the world
 Primary products are “routers” and
“switches”
 Main competitors are 3Com and Dlink
 Market share leader with over 75% of the
market

13. Time for a Change
 January 1993, Cisco was $500 million company running
a Unix-based legacy software package
 CIO Pete Solvik saw the need for change
 Initially, Cisco avoided an ERP solution
 They wanted to grow to a $5 billion-plus
company.
 They were not able to make changes to
the application to meet our business
needs anymore. The application had
become too customized.

14. Problems faced with the
legacy applications
 Company’s annual growth rate was 80%.
 Transaction rate had increased drastically.
 The legacy systems did not have the capacity to
handle the load.
 Any attempt to improve the applications would crash
the system.
 IT department would spend its time repairing the
legacy systems.
 One day, it was corrupted and thus shut down for 2
days.

15. Expected Benefits of ERP
Implementation
 They wanted an ERP that could maintain centralized
structure of the company.
 They wanted to put manufacturing, order entry and
finance in one place. They wanted an ERP that could
do it.
 Capacity of the ERP could be improved in the long-
run as the size of the business increases.
 They wanted an ERP that wouldn’t have to be
modified according to the business needs.

16. Pre-implementation Steps
 Select a good integration partner to help in selecting a
good ERP solution and vendor.
 They chose KPMG.
 Do market research and ask other companies what they
know about ERP systems.
 Based on market research and KPMG’s advice, they
selected Oracle.
 Decide a price and time needed for implementing the
ERP.
 Get board approval for funding the project.
 Build ERP implementation team one each from KPMG,
Oracle and Cisco.

17. Project Approval
 Target timeline was 9 months
 Projected cost was $15 million
 Largest capital project ever approved by Cisco
 Steering committee at top to ensure project
visibility, sponsorship, and motivation
 Split into 5 key areas (Order Entry, Manufacturing,
Finance, Sales/Reporting, and Technology)
 All areas consisted of internal Cisco
employees, KPMG consultants, and
Oracle consultants

18. Cisco ERP Implementation Team Structure
Executive Steering
Committee
Project
Management Office
Sales/Reporting TechnologyFinanceManufacturingOrder Entry
IT Lead
Business Lead
Business
Consultants
IT Consultants
Users
Business Lead Business Lead IT Lead IT Lead
IT Lead IT Lead Business
Consultants
IT Consultants
Business
Consultants
IT Consultants
Users
Business
Consultants
IT Consultants
Users
IT Consultants

19. ERP Rollout
Broke into phases called CRP’s
(Conference Room Pilots)
CRP0 = Training and technical
configuration
CRP1 = System works for each specific
area
CRP2 = Modifications (red, yellow, or
green), continued training, and initial
testing
 CRP3 = Full system testing “preparation
to go live”

20. List of Modifications
 Packout-custom barcoding, queues,
inventory, and shipping modifications
 Canada-separate set of books for
separate currency
 Product Configurator-enables Cisco to
enter “rules” for product ordering
 OE Form-discounts, cost data,
multinational orders, etc.
 Net Change Bookings-daily log of all
order activity

21. Initial Challenges
 Hardware failures
 System instability
 Software unable to handle initial volume
 Team effort-overcame problems within 3
months

22. ERP Results
 Project completed on-time
 Project completed on budget
 Cisco ERP team bonus totaling $200,000
 Overall successful systems replacement
 Minimal company interference

23. ERP Implementation Dates
 Project Kickoff
 Prototype Setup Complete
 Implementation Team
Training
 Process, Key Data,
Modification Designs
Complete
 Functional Process Approval
 Hardware Benchmark and
Capacity Plan Validated
 Critical Interfaces,
Modifications and Reports
Complete
 Procedures and End-User
Documentation Complete
 CRP Pilot Complete-Go/No
Go
 June 2, 1994
 July 22, 1994
 July 31, 1994
 August 31, 1994
 September 30, 1994
 October 15, 1994
 December 1, 1994
 December 16, 1994
 December 22, 1994
 January 3, 1995
 January 27, 1995
 January 30, 1995

24. Critical Success Factors
 They tested it thoroughly and made the required
modifications immediately wherever needed.
 They knew what the software could or couldn’t
support.
 They worked together in a tight team and stuck to the
schedule.
 Employees gave their 100% in the project to make sure
they did quality work

25. Why was Cisco’s ERP
Implementation a Success?
 Recognized the problem & developed a
realistic plan of attack
 Project was a high priority in the company
 Upper management supported the project
 All areas of the company were involved
 Diligent vendor/consultant selection
 Limited customization
 Meet target implementation dates
 Stayed within the initial project budget

26. Areas Where Cisco Was
Lucky
 On the day of the presentation to board for project
approval, the legacy system crashed. It helped the IT
dept. to convince the board members faster.
 Cisco’s contract with the hardware vendor for
capability of hardware rather than specific
configuration helped in keeping costs low.
 The Oracle and KPMG teams were always with them
and put in their 100% even when they weren’t
required to.
 Hardware company’s president sponsored the final
stage. All the additional costs were borne by the
hardware vendor company from its own pocket.

27. THANK YOU