Cisco Systems, Inc.
: Implementing
ERP
ISM Assignment 1
Group 6, Section B
Q-1. What CISCO’s initial approach to IT decision-making? Write in brief.
Cisco relied on UNIX-based software to support its core transaction processing.
Financial, manufacturing, and order entry systems were among the functional areas supported by the
package.
Cisco was the software vendor that supported the application's "by far and away" largest customer. IT
representatives from each department were asked to report expenses to Solvick, who maintained a strict
management structure over the departments.
Cisco’s second option was an upgrade of their legacy system, which was meant to run a 300 million-
dollar company that Cisco no longer was.
Q-2. What was Pete Solvik’s initial thoughts on implementing ERP at CISCO just
after he joined? Explain.
Pete Solvik's first instinct was to avoid using an ERP system. Instead, he intended to let each functional
area decide on the application and timing of its move.
With Cisco's strong standardization tradition, all functional areas would be required to use common
architecture and databases. This strategy was consistent with the organizational and budgetary structures
put in place by Solvik upon his arrival.
Solvik was adamant that IT budgetary decisions be made by functional areas, with the IT organization
reporting directly to him. Solvik's opposition to ERP solutions stemmed from his concerns about the
types of "mega-projects" that ERP implementations frequently became.
Q-3. Change in its business processes OR customization of vendor’s ERP software?
Yes, this ERP implementation is a top-down method, as it began at the upper level of management and
was implemented throughout the organization, as opposed to beginning at the lower level of
management.
Individual functional teams would have required much more effort and a slower rate of adaption to a
new ERP; also, distinct software would have been required for each team.
A centralized strategy led to the selection of the best software available on the market as well as the most
qualified personnel for the company-wide installation.
It led to efficient budget allocation and third-party sponsorship.
The top-down strategy made team creation a priority by enlisting KPMG, resulting in efficiency after a
series of team meetings and exercises.
Centralized training and implementation via several CRP0 to CRP3 pilot programs.
Q-4. Why there is always a “performance dip” just after ERP implementation?
Explain.
EFFECTS ON PERFORMANCE AFTER THE IMPLEMENTATION
On-time shipping fell from 95% to 75%
System went down nearly once a day
System lacked the capacity to handle required load
Overall business performance
Reasons:
User Adaption
After the implementation of the ERP, the users of the Program may need some time to get accustomed to the
interface and intricacies of the UI before they can go back to their usual efficiency levels. Till the time they
get comfortable with the new working environment, there is usually a dip in performance.
Hardware architecture and sizing
The main reason for the system going down was hardware architecture and sizing. To correct the issue would have required
cisco to purchase additional hardware, increasing the total project expenditure. Cisco signed for an unusual contract as they
purchased equipment based on promised capability rather than a specific configuration. As a result, the onus of fixing the
hardware performance problems fell completely on the hardware vendor.
Below Par final testing
During testing, Cisco had run individual processes sequentially rather than at the same time and also only a partially loaded
database was used. Due to this, system faced challenges to handle the transaction volume required in the cisco environment.
After cutover, when all processes were running together over a fully converted database, the system lacked the capacity to
process the required load. The application exacerbated hardware problems by inefficiently processing common tasks.
Q-5. What are the steps followed by CISCO in ERP implementation including
systems analysis and planning? Write in brief.
Building Implementation Team :
• Extension of relationship with KPMG for guidance through the end of implementation
• Building a team of 100 members representing a cross section of Cisco’s Business community
• Teams distributed into 5 tracks :: Order Entry Track, Manufacturing Track, Finance Track,
Sales/Reporting Track, Technology Track
• Executive Steering committee comprising of VP of manufacturing, VP of Customer Advocacy,
Corporate controller, Solvik, Oracle’s senior VP of Applications, and partner in charge of West
Coast consulting for KPMG
CRP -0
• Training of implementation team and setting up technical environment; teams working in 2 parallel tasks
• Configuration of Oracle package by setting and tuning several parameters embedded within the software
• Software demonstration & taking Cisco’s order through company’s business process
• Realizing that Cisco wouldn’t be able to adhere to one of its objectives – to avoid modification of ERP
CRP -1
• Detailed scripts documenting the purpose and procedures used to complete a process
• Modification Request classification as :: Red, Yellow and Green
• 30 developers modified Oracle to support the business in a period of three months
• Evaluation and selection of a service support package in alignment with the overall implementation schedule
CRP -2 & 3
• Leveraging a single data warehouse information needs of Cisco’s applications; also ensuring Round 1 enhancement
• Testing system’s hardware and software to check its performance on processing loads and transaction volumes
• Ensuring the system’s readiness to “go- live”
• Presentation by each functional lead and checking confirmation if they were prepared for launch
Deployment and stabilization
• Recognition of problems in initial deployment phase in relation with the hardware architecture and sizing
• Procurement from the hardware vendor on a specific capability rather than a specific configuration
• Checking the software’s compatibility with large databases and tuning it to match the requirements
• Strong commitment from Oracle, hardware vendor and KPMG lead to eventual stabilization of the software
Q-6. Change in its business processes OR customization of vendor’s ERP software?
Existing vendor problems and solution:
Existing ERP vendor was acquired by another company
Unclear about future support for the existing system
Sceptical about Reliability, scalability, and modification for anticipated future growth
Evaluating alternatives, it was decided to replace the system with one ERP solution from a new vendor
KPMG was selected as an integration partner to assist in the selection and implementation of the
solution.
Selection of new vendor
Request for proposal sent to the vendors
CISCO analyzed the RFP responses
Vendor invited for 3 Day software demonstration
Oracle was selected based on the following factors:
1. Better manufacturing capability
2. Promised regarding long-term development of functioning
3. Flexibility offered by Oracle‘s being close by
