CISCO Case Summary

MBA (EE2) Program Dubai Information Technology Management Ahmed Elghannam
Company information Cisco Systems is a leader in the information technology (IT) world. Cisco founded by two Stanford scientists in 1984 / went public in 1990. In 1997 Cisco ranked in the top five companies in return on assets and revenues. In 1999, over 75% of Internet traffic traveled through one or more of Ciscos products. In March, 2000, Cisco overtook Microsoft as most valuable business on earth (market cap of $531 billion). Cisco Started by producing routers. Then started challenging world of three independent proprietary networks Phone networks (voice), Local and wide area networks (data) and broadcast networks (video) Cisco emphasis on maintaining structure through periods of growth it follows two methodologies. First decentralized model in the three lines of business (enterprise, small/ medium business and service provider) which are product marketing and R&D department and centralized model in Manufacturing, Customer support, Finance, Human resources, Information technology, Sales organizations Cisco main strategy was 1. Assemble a broad product line so Cisco can serve as one-stop shopping for business networks. 2. Systematize acquisitions as an efficient business process. 3. Set industry wide software standards for networking. 4. Pick the right strategic partners. Industry information Industry has many trends. First digitization enables convergence of three networks. Internet acts as Global Network of networks that allows for transmission of voice, data, video over one network. Internets open standard creates competitive battleground for incumbent telecoms. Second is IP-based networks that has a cost advantage over traditional phone networks IP based Network is highly equipped to address performance & security issues. The whole industry benefits from Silicon Valley location that acts as hotbed for innovation. In the future, companies will compete to develop hybrid product. Companies also strive to create a product with the speed and efficiency of a router and the precision of a telephone switch. Juniper Networks competed with Cisco by providing a new generation of router that used by service provider. They floated their IPO with revenue of $100 m in 1999. Defining moment Ciscos legacy environment failed (January 1994) that lead to corrupted Ciscos central DB (Two-day company shutdown). It was a must for them to implement an integrated stable ERP system. Cisco manage to get best people by pulling best people out of their jobs into the project. They also choose strong business partner which is KPMG. KPMG brought very experienced people into the project. Team strategy was to build as much knowledge as possible (leverage experience of others), ask for help from large corporations and big 6 accounting firms and tap research sources (ie. Gartner) ERP selection Cisco narrowed field to 5 packages in 2 days. They evaluated packages at a highlevel, and then chose between Oracle and another major player. Cisco didnt want a company smaller than Cisco.
RFPs (request for proposals) They spent 10 days on RFP, vendors had 2 weeks to respond. Cisco team researched on client past performance (reference clients).Vendors invited to 3-day software demonstration. Candidates had to show how they could meet Ciscos requirements Oracle won the project Oracle manufacturing module has more capabilities. Oracle made a number of promises regarding the long-term development of functionality in the package. Oracle showed flexibility being close by. Cisco believed that oracle was motivated as this is the 1st major implementation of a new release of the Oracle ERP product. Selection process took Cisco team 75 days. Final choice was team based. They chose Oracle, negotiated contract with them, then put proposal together for Board of Directors. Board of Directors has two primary concerns cost of project and length of project. But implementing the system is a must because the reliability, scalability, modifiability of current applications didnt support anticipated future growth. They accept to replace systems with one ERP solution in 9 months for $15M. Project completed successfully on time. Formed centerpiece of the 2-yr $100 million series of initiatives to replace all IT applications and platforms worldwide The CSF of successful implementation In general Project management should have a clear scope and schedule and able to meet the deadline. Clear understanding and analysis of the As is and the To be processes to be able to redesign the Processes in a way that achieve best performance not to implement the current situation using an ERP System. User training has also a great impact on the success of ERP implementation. Deploy the right Technological infrastructure. Risk Management in any implementation there should be provision of risk and how it could be handled. Top management support is one of the key factors. Communication , Team work, and Use of consultant are so important In Cisco some of them main success factors are top management commitment, use of KPMG as a big consulting firm, choosing oracle that fits their process and the manufacturing requirement they want. Oracle considered this implementation as strategic implementation because it is the first and biggest implementation for their new release of the product. Clear vision, scope and timeline Csco main components of ITs I. Cisco began web development in the early 1990s II. Cisco would web-enable all of their applications Employee Self-Service Internal Applications, Communication and Distance Learning, Customer Self-Service Electronic Connection with Customers, Net Commerce Shipping product over the Internet, Ciscos Supply Chain Management Initiative, Automating supply chain involved III. EIS (executive information systems) and DSS (decision support systems) Employees use web browser as front end access to all executive and decision support information in the company, Web-based EIS system used by all sales managers and executives, Allows for sales tracking and reporting (done over the intranet) IV. Implementing oracle ERP

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MBA (EE2) Program Dubai Information Technology Management Ahmed Elghannam

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