1. Vince Rubiera Cisco Analysis - CIS 621 Key implementation characteristics that differentiated between success and failure in Ciscos ERP implementation. In 1994 Cisco was battling internal IT systems that were maxed out and failing. Pete Solvik, CIO, knew that Cisco needed an IT system change and eventually chose to purchase an ERP. Here are some of the factors that led to, and played a key role in the implementation of Ciscos ERP: Critical Success Factors: 2 They had top management support. The board approved the ERP implementation, and top VPs monitored the progress. Top talent was chosen from a diverse cross-section of Ciscos business community. Our orientation in pulling people out of their jobs (to work on the project) was if it was easy they were picking the wrong people. 1 The development of a Steering Committee with senior leadership representing several departments encouraged interdepartmental coordination. Cisco avoided most customization by training its employees to use the new system the way it was designed (business Process Re-engineering). 1 Clear goals and objectives were established from the beginning. Cisco identified how long it would take to achieve each step of the process to be on schedule and meet the deadline of having the system implemented in 9 months. PMO and track leaders ensured each team followed this timetable. Cisco used an approach called rapid iterative prototyping 1 to divide the project into phases. This approach allowed them to build on the knowledge gathered in the prior phase, and apply lessons learned to the next phase. Oracle had guaranteed certain levels of capability, which allowed Cisco to resolve capacity issues at Oracles expense. Cisco had specific and stringent expectations prior to choosing Oracle. These included: size of the corporation, software demonstration, verified references and efficient manufacturing modules. The KPMG consulting group was recruited to assist with all aspects of ERP integration. Failures: Cisco previously relied on a Unix-based software package to support its financial, manufacturing and order entry operation. This system suffered several outages including a 2 day outage in 1994, which led to the consideration of a new system. This was declining core technology and subsequently had a negative ROI. 3 Initially IT upgrades were approached with a cost center/support mentality. 5 The CIO wanted each functional area to consider its own applications and timelines. 1 Future support of the legacy system was questionable, and the software had reached its ability to expand. The projected cost failed to include hidden costs which included: pooling top talent from all departments, hiring and training employees, refocusing all their IT resources, future software upgrades/service, and opportunity cost from lowered service levels during stabilization (the software was unable to handle the transaction volume demanded by the Cisco environment). Cisco agreed to pay to employees a bonus the summed up to $200,000 which was probably not included in the original budget. Management set an 80% accuracy level when it came to requirements identification; consequently, Cisco had to buy another package to satisfy its after sales support needs. In summation, Cisco had successfully completed ERP deployment within the allocated time, and had improved information flow and reliability. This created a positive ROI and lower transaction costs. ERP integration allowed Cisco 1. Cisco Systems, Inc.: Implementing ERP, 2002, HBR 2. Vicious and virtuous cycles in ERP implementation: a case study of interrelations between critical success factors, 2002, European Journal of Information Systems 3. The Technology Window (Class Slides), 2008, R. Plant 4. How Information Gives You Competitive Advantage, 1985, HBR 5. C. Schwab PowerPoints (class notes),2008, R. Plant 6. Note on information technology and strategy, 1993, HBR

2. Vince Rubiera Cisco Analysis - CIS 621 to shift right and up on the information intensity matrix4 along the entire value chain. They were also able to centralize their IT processes and move to the Backbone Quadrant of the infusion/diffusion model; allowing their IT team to provide greater support to the entire organization.5 Ciscos ERP helped them transition from the cost center mentality quadrant in the strategic grid, through the turnaround stage during integration, and into the strategic quadrant after launch. From this position, they had a clear advantage in their business market.6 This was a good example of the duality of IT; greater support while enabling competitive differentiation.5 By 1997 they were one of the top 5 companies in ROR and ROA, and leading the industry. 1. Cisco Systems, Inc.: Implementing ERP, 2002, HBR 2. Vicious and virtuous cycles in ERP implementation: a case study of interrelations between critical success factors, 2002, European Journal of Information Systems 3. The Technology Window (Class Slides), 2008, R. Plant 4. How Information Gives You Competitive Advantage, 1985, HBR 5. C. Schwab PowerPoints (class notes),2008, R. Plant 6. Note on information technology and strategy, 1993, HBR