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Enterprise Resource Planning

Essay by   •  February 6, 2018  •  Case Study  •  1,241 Words (5 Pages)  •  465 Views

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Institute of Management

Nirma University

Enterprise Resource Planning

Case write up- Cisco Systems, Inc.: Implementing ERP

Submitted By: Meesha Chatterjee (137135)

                        Vibhu Malaviya (137165)

Submitted to: Prof. Nityesh Bhatt

About CISCO

  • Established in 1984 with Router as their primary product.
  • By 1997, entered into elite club of fortune 500 and became one of the top5 companies in retur on investment and return on assets.

IT Department

  • Pete Solvik joined as CIO in January 1993
  • They were running a unix based software package to support core operating and transactional process of the company.
  • Package was majorly supporting 3 functional areas –
  • Financials
  • Manufacturing
  • Order entry

Why ERP

  • The company was able to sustain an annual growth rate of 80%, and legacy system was unable to handle such load because of which there were frequent system outages.
  • This inability of the system to perform a workaround, caused corruption of database which finally resulted in shutdown of the company for two days.
  • This became the defining moment for company’s top management to take the decision of implementing ERP.

Implementation if ERP

  1. Selection of an ERP product

Major Decisions Taken –

  • Pulled out very vest people from their teams for implementation
  • Chose KPMG as integrated partner. KPMG saw the opportunity and gave their best people for this project.
  • Took the help and guidance of large companies and research sources like Gartner group and sending out RFP to vendors, finally selected Oracle as a vendor.

  1. Approval from Board
  • Two decisions necessary to be put in front of the board –
  • Cost of the project
  • Time line of the project

Through systematic research, taking all factors into consideration the cost was estimated to be $15 million and the duration was taken as 9 months.

  1. Implementation of Building Team
  • 5 Tracks (Process area teams)
  • TRACK –
  • Cisco Information system leader
  • Cisco business leader
  • Business and IT consultant (Oracle/KPMG)
  • Additional personnel from business as team member
  • Project Manager

Implementation of Oracle

  1. CRP0
  • 2 week training on oracle to understand technical specs.
  • One small tiger team working on getting application up and running

Results –

  • Changes were required to fulfil gaps.
  • Priority of Changes

  1. CRP1
  • Each track to make system work within specific area
  • Generate detailed documentation for each process/issue.

Results-

  • Identified all the required modifications
  • Standard document to understand the project
  • Feasibility of product to handle the modification

  1. CRP2 and CRP3
  • Included all the major modifications
  • Decide on after sales support package

Results-

  • A centralised data warehouse to use all Cisco applications
  • Changed company structure and process according to product
  • Renumbered the product
  • Changed Bill of material structure
  • Changed most data according to new system
  • Green signal to system GO-LIVE

  1. GO LIVE
  • Hardware issues
  • Inability of software to handle the volume of transactions.

Workaround by team

  • Responsibility of vendor to solve hardware issue (without increasing the cost).
  • Stress testing not done, which resulted in data leak.
  • All IT team worked together for the next two months to solve all technical issues.

Q1. What factors had made the difference between success and failure of Cisco ERP project?

  • No shortage of funds, since the growth rate was huge and so were the revenues.
  • Enthusiastic employees; agreed to change and adapt to the new environment along with putting great efforts to make the ERP project work.
  • Support from the top management became one of the major reason for success of the project.
  • Choice of selecting KPMG as the integration partner as well as Oracle as the implementation partner. Both were keenly interested in building up a successful ERP system.

Q2. Where had they been smart?

  • The initial decision to implement ERP project became a major decision
  • Selection of the team for implementation of the project.
  • Selection of KPMG as an integration partner.
  • The program manager from KPMG that headed the project was previously the director of an IT company that had put in various parts of the ERP system.
  • Proper planning was done in phases (CRP) which enabled better control and timely completion of the project.

Q3. Where had they been just plain lucky?

  • No major accident took place from the loss or leakage of data during cut-over.
  • The team they chose proved to be very efficient and hardworking.
  • The failure of legacy system at the time when the team approached board for approval of ERP project.

Q4. Do you think the CISCO team can do such a project again if they had to?

  • Yes I think Cisco can handle such a project again. Few of the major reasons are –
  • Smart and hardworking workforce.
  • Support of the top management
  • Technical Knowledge
  • Huge amount of resources

ERP Life Cycle – Implementation and Support Activities at CISCO Systems

  1. Pre implementation Activities
  • Selection of integration partner - KPMG
  • Seeking guidance from “Big Six” and the Gartner Group
  • Preparation of RFP to send out to vendors
  • Conducted due diligence by visiting a series of reference clients
  • Demonstrations conducted by each vendor
  • Deciding on a budget of $15 million
  • Getting the budget approved by the boards

  1. Project preparation
  • CISCO chose the best people to be a part of the implementation team
  • Establishing Project Management Office and the Steering Committee
  • Well defined structure of the team
  • The project was made as the company’s top seven goals for the year.
  • The implementation strategy was to do everything at one, instead of going for a phased implementation.
  • The first task of the teams was to undergo rigorous “immersion” training in two 16 hour days for the entire application suite
  1. Business Blueprinting
  • The team realized during CRP 0 that they needed significant number of changes for the software to run effectively.
  • Documentation of all issues.
  • Modifications tagged colour coded (Red, Yellow and Green) according to the severity.
  • Each of the modifications went to the track leads and anything that was Red had to go the Steering Committee for approval.
  • Customers and products were renumbered and bill of material structure was changed
  1. Realisation
  • Customization of the system.
  • As a development for gaps another service support package for after sales support was chosen and its implementation also began.
  • Testing of the system, both hardware and software, to see how well it would stand up to the processing loads and the transaction volumes required to run Cisco’s growing business.
  • A final test was conducted with a full complement of users to see how the system would perform front to back, with a full transaction load.
  1. Final Preparation and Go live
  • The cut over was scheduled for February after complete testing.
  • The functional leads presented their piece of the process and said “yes” or “no” on whether they were ready to go.
  1. Support
  • Continues vendor commitment and support from Oracle, the hardware vendor, and KPMG, the integration partner led to an eventual stabilization of the software and improved performance.
  • The president of the hardware vendor was their executive sponsor

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