2. 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.
3. Company Structure
John Morgridge was appointed CEO in 1988.
He thought the firms in Silicon Valley decentralized
too quickly and subsequently lost control.
He maintained a centralized organization.
Only product marketing and research and
development were decentralized.
Finance, human
resources, manufacturing, IT, customer support, etc.
were centralized.
4. IT at Cisco
Cisco was a $500 million company using a UNIX-
based software package for its core transaction
processes.
This software package was suitable for companies
with $50 million to $250 million revenue and not
$500 million.
Finance, manufacturing and order entry were
supported by this software package.
CIO knew the company’s growth prospects were very
good. So thought the software package wasn’t
enough.
5. Apprehension towards ERP solutions
CIO thought the budgetary decisions IT expenditure
should be taken by the functional areas not the IT
dept.
Unless they ask, IT won’t do anything.
ERP solutions’ implementations often turned into
“mega” projects and take up lot of time and money of
the organization.
6. 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.
7. 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.
8. 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.
9. 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
10. 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.