Cisco ErpCisco Programs Inc. : Implementing ERP come journey with us your cowboys: invoice atkinson denisa kubricka edmond lui georg wittenburg iman sharif Firm Background • Based in 1984 by two Stanford laptop scientists • Turned publicly traded in 1990 • Main product is “router” • By 1997, Cisco was ranked high 5 corporations in return on revenues and ROA in Fortune 500 • In 1998, market capitalization was over $100 billion Markets Cisco was a key infrastructure provider for the “New Economic system” within the mid-90s. • That market went by a interval of wonderful progress since Cisco shaped. • This quick progress charge was instantly mirrored in Cisco’s gross sales figures. • The longer term was wanting shiny. Firm Construction • Three practical divisions: – Order Entry – Finance – Manufacturing • Preliminary IT Technique: – Let division deal with themselves. – General structure is shared, enabling sharing of information. Historical past of IT at Cisco UNIX-based software program package deal to help its core transaction processing: – Practical areas supported: monetary, manufacturing and order entry techniques – Used widespread structure and customary databases • Development of Cisco resulted in scalability issues. • Cisco was the most important single costumer of that vendor, leading to a strategic weak spot. Level Clean • Would the software program developed for a $300 million firm match using a $1 billion firm? Level Clean • Why would a multi-million greenback firm wish to keep away from ERP?
A Large Want • Acknowledged the necessity for change, however left actions to every practical division: • Thus: – Little progress was made within the yr – Every practical space was reluctant to exchange the legacy system due to excessive threat concerned – Programs outages turned routine – Unauthorized methodology for accessing the core utility database malfunctioned, corrupting Cisco’s central database • Firm was shut down for 2 days Deciding on an ERP product • The planning was pushed solely by timing constraints and panic. There was no enterprise case • Cisco emphasised the necessity for: – – – – Sturdy workforce Sturdy companions Speedy resolution making Getting Government & Board approval Venture Workforce & Companions • Workforce: – Know that easiest individuals are wanted – Pulled finest enterprise & IT individuals out of their present jobs at Cisco • Companions: – Essential that associate might work on the choice in addition to implementation of venture – KPMG as integration associate – KPMG workforce of 20 (extremely skilled; not “greenies”)
Groups choice technique • Groups technique – use experiences of different corporations and finest practices to build up information • Chosen 5 packages inside 2 days • After per week of excessive stage analysis – two packages chosen: ORACLE and one other main participant within the ERP market • 10 days on request for proposals Level Clean • Is it smart to decide so rapidly? Are there issues that must be finished to mitigate the chance? Did they do due diligence? Workforce Choice Technique Cont’d Oracle & different vendor given two weeks to answer RFP • Present vendor prospects have been visited by the workforce throughout these two weeks • After response, obtained a Three-day software program demonstration by every vendor (used Cisco’s pattern information) • Objective is to indicate how software program meets or doesn't meet Cisco’s necessities Ultimate Vendor Choice Standards • Three essential standards used: – Manufacturing functionality – Lengthy-term growth of performance of package deal – Flexibility of Oracle’s being shut by (location smart) Different motivations – Oracle’s first launch of recent ERP product – if Cisco venture goes nicely, favorable product launch of Oracle ERP package deal • Oracle chosen – workforce resolution, no administration approval at this level Time • After 75 days from begin of venture, main TODOs are: – Negotiations between Oracle & Cisco – Write up a Proposal to Board of Administrators • Time and non-interference with annual accounting as essential concerns. • Well-known final phrases: – “… there’s no means we’re going to take 15 months to get this finished. That’s ridiculous. ” – “Properly, can we do it in 5 months? That simply didn’t appear proper. ” – Let’s attempt 9. Level Clean • Was 9 months life like? Ought to different standards have been used to estimate the time, slightly than quarters as primarily standards? Prices • No formal enterprise case for venture • Concentrating on system failure as motivation to venture begin • $15 million price range estimated • Not approached from the justification potential (no price/profit evaluation) • Prices: » » » » Software program 16% Hardware 32% Headcount 14% System integration 38% Level Clean • How do you assume ought to venture prices be estimated for Cisco’s venture?
Getting Approval From Board • Met with CEO – remark about ‘jobs misplaced over a lot lesser quantities of cash’ • Received CEO’s help • Met with Board of Administrators – chairman says ‘present me the cash’ as very first thing • Board approves venture • Single largest venture ever undertaken by firm • CEO makes venture precedence for Cisco Constructing implementation workforce • As not sufficient time & KPMG carried out nicely throughout planning part • KPMG relationship prolonged for implementation • Additional 80 workforce members added on from the Cisco’s enterprise neighborhood • 5 tracks (course of space groups) used: Order Entry Monitor » Manufacturing Monitor » Finance Monitor » Gross sales/Reporting Monitor » Know-how Monitor Level Clean • Was it price eradicating vital individuals from the common enterprise positions to work on the IT venture? How can an IT division in one other firm persuade higher administration that that is worthwhile? Steering Committee • Excessive stage execs from Cisco, Oracle, and KPMG • Reveals dedication and significance of venture Level Clean • How vital is it to have help of higher administration to make sure success?
Implementing Oracle • A growth method often known as “fast iterative prototyping” • Implementation damaged right into a sequence of phases referred to as “Convention Room Pilots” (CRPs): – CRP zero / 1: Construct on earlier work to develop a deeper understanding of the software program and the way it functioned – CRP 2 / Three: Implement the ERP system. CRP0 • Coaching the implementation workforce and organising the technical setting • Two parallel efforts: – Coaching the workforce within the Oracle functions Regular 5 day coaching pushed to 2 16-hour days! Getting the appliance up and working by a small “tiger workforce” CPR0 • • • • • Configuring the Oracle package deal Tons of of parameters within the functions Workforce members “locked” collectively for 2 days 1 % effort with 80 % accuracy Accomplished one week after the assembly, resulting in the conclusion that modifications to the software program have been wanted to help the corporate successfully Level Clean • Do you assume that having 80% accuracy with just one% effort was only a matter of luck?
Considering that typical ERP system configuration takes as much as 6 months, not 2 days!! Any dangers concerned with this strategy? CPR1 • Objective of this part every observe makes the system work inside its particular space • Particulars and procedures for finishing a course of have been created • Realized that quite a lot of enterprise processes weren't supported by the software program wanted modifications • Modifications have been categorized into: • Inexperienced • Yellow • Crimson, wanted to go to the steering committee for approval there have been few reds CRP1 30 builders wanted for Three months to change Oracle • Modifications led to unplanned modifications within the venture plan and price range • Realized that Oracle couldn't help the after-sales help wants • Selected a service help package deal and deliberate to lunch each packages collectively Level Clean • Wouldn't it have been attainable to keep away from most of those main modifications and the necessity for a brand new service package deal had they spent extra time of their preliminary design and resolution making? • Does it assist to prioritize the required modifications and management scope? CRP2 Continued scope change • Main technical points • Creation of information warehouse for centralized information communication CRP2 • 100-person IT division began decommitting from different tasks • Bore a lot of the duty for the venture additions • “IT did nothing else that yr” Level Clean • Is it smart to commit your whole sources to a brand new venture, when your present techniques are barely scraping by? CRP3 • Give attention to testing the complete system • Assess readiness to ‘go dwell’ • Captured in the future’s price of precise enterprise information and ‘re-running’ it on a Saturday
Level Clean • Would you take into account in the future of testing ample (with a subset of information), in case you have been planning a clear cutover of your total IT infrastructure? The Aftermath • The brand new ERP system went dwell on January 30, 1995, nevertheless it took two months earlier than it was working at an affordable stage of high quality. • Problematic areas have been hardware structure and sizing. – Take a look at hat solely been run sequentially and with a subset of the actual database. • Facet-note: How is it attainable that nobody within the workforce seen this earlier than? Cisco Programs (1995) Cisco Programs creates 5 distinct enterprise models that mirror its main networking product teams -- Workgroup, ATM Excessive Finish, Entry, Core and IBM Internetworking. • "Whereas leveraging economies of scale in areas like manufacturing, gross sales and help, the enterprise models can transfer rapidly in product growth and expedite time to market. " • Cisco Programs is the primary main provider of internetworking merchandise to be awarded international ISO 9001 certification. Cisco Programs (2004) • John Chambers, president and CEO: “Our robust place within the core switching and routing enterprise continues to be complemented by optimistic momentum in our Superior Applied sciences, particularly this quarter in storage, safety, wi-fi and IP telephony. ” • Constructive Q2 2004 figures: – Q2 Web Gross sales: $5. four Billion (14. 5% improve yr over yr; 5. eight% improve quarter over quarter) – Q2 Working Money Flows: $1. 7 Billion Oracle Corp. (2004) • Third quarter revenues have been up 9% to $2. 5 billion whereas internet earnings grew 11% to $635 million as in comparison with the third quarter final yr. Chairman and CFO Jeff Henley: – “Oracle's fiscal third quarter was one other strong quarter, with new software program license income progress of 12%, which is similar to final quarter. ” • Oracle CEO Larry Ellison: – “This was a really robust quarter for our database enterprise. ” groupthink Level Clean • Would they be capable of do it once more? – Which have been to key elements to the success of the venture? – At which factors might it have failed? – Are these one-time occasions or can we generalize them? Pete Solvik CIO of Cisco Programs • Heads the Web Enterprise Options Group (IBSG) • One of many high 25 unsung heroes of the Web by [email protected] Week Pete’s Ideas for CIOs • Ensure that the corporate's “enterprise homeowners” make and fund IT spending decissions. • Use infrastructure as a strategic enabler. • Tie IT's goals and rewards to the targets of the corporate enterprise models. • “Pete Solvik's Three Ideas for CIOs” http://www. voicendata. com/content material/top_stories/101010311. asp Thanks on your time!