Introduction

Cisco System, Inc. an American multinational, headquartered in San Jose, California, U.S.A was founded
in the year 1984 by two Stanford computer scientists. The companys product range involved networking
components with routers being the primary product. Tremendous structural \and organizational changes
took place in the company during 1988, John Morgridge was hired as the CEO and was responsible to
develop a professional management team. Cisco went public in the year 1990, after which its founders
sold all their shares and left Cisco. By the year 1997, Cisco was a part of the FORTUNE 500 companies
and was considered among the top 5 companies in return on investment/revenues and assets. Ciscos
exceptional growth continued and in the year 1998 it had surpassed the $100 Billion mark.

Necessity of ERP
Pete Solvik joined as the new CIO in 1993. During this period Cisco was running the UNIX-based
software package to support core operating and transactional process. The UNIX system was supporting
three functional areas:
a. Financials
b. Manufacturing
c. Order Entry
The UNIX based package was suitable for companies with a revenue of 300 million dollars. Further, the
UNIX based system did not provide options to interaction between departments and had a restricted
access. The functional areas had become a lot customized over the years and the software lacked the
reliability and maintainability to meet the future requirements. The huge influx of date resulted in the
system being shut down for 2 days.
Solvik had realized this problem very early, but could not put forward the Enterprise Resource Planning
(ERP) solution due to the expense involved. Companies struggle with budget and complexity when it
plans to implement and install ERP application (Davenport, 1998) 1. Instead he wanted every department
to decide by themselves over installing a new common architecture and database.
In an organization like Cisco, where a lot of data is processed simultaneously the ERP systems would be a
major advantage as they convert unequal, complex, and incomplete sets of data into a logically structured
format helping the decision-makers with a clear output. ERP also facilitates sophisticated processes which
enable firms to undertake complex volume and timing decisions relating both to the present and future
(Slack Chambers and Johnston, 2007)2. ERP systems facilitates incorporation of various functional
modules and provides a centralized database wherein several other softwares can be integrated across a
single platform (Hossain Patrick and Rashid, 2001) 3. The software can pick up the required data from the
central ERP system, send it across to the required department in the organizational network for
processing. Thus, Cisco benefits from transparent flow of information and data across all departments of
the organization and greater coherence.
1 Davenport, T. H., (1998). Putting the enterprise into the system. Harvard Business
Review, Vol. 76, Issue 4, pg. 1-10
2 Slack, N, Chambers, S. and Johnston, R. (2007) Operations Management (5th
edition), FT Prentice Hall, London
3 Hossain, L., Patrick, J. D., & Rashid, M. A., (2001). Enterprise Resource Planning: Global
Opportunities & Challenges. Idea Group Publishing, ISBN-13: 9781930708365, pg. 12-20

ERP is a very flexible software package and thus includes several functional modules, which are essential
for functioning of a large business house like Cisco. The modules include finance, materials, human
resource, logistics, sales, engineering and Customer Relationship Management (CRM). Cisco would
eventually benefit by being responsive in planning and deciding on the above mentioned modules
(engineering, manufacturing, finance and logistics). As a result Cisco can shorten lead-times, improve
turn-around-time (TAT), manufacture better quality products and lower the costs involved. Moreover,
better financial performance is achieved with improved order cycle which increases customer satisfaction,
also reducing departmental issues (Shapiro Rangan and Sviokla, 2004) 4.

Success and Failure of ERP

Even after the debacle of January 1994, Cisco was lucky to be able to achieve a growth of 80%. It was
then that Solvik decided to move forward with his plan of implementing the ERP. This was a smart move
made by Solvik, as the revenue earned ensured that the Cisco will be able to afford the implementation of
the ERP project. Implementation of such a large scale project requires the support of the top management
and employees of the company. Looking at the failure the previous software package, its impact and the
sustained growth of Cisco, the board gave their approval for the implementation of ERP.
The project was taken up as one of the top priorities of the Cisco. One of the greatest underlying factors in
the success or failure of any organization is the power of its people, and how well that power is focused
towards meeting the organizations objectives (Apostolou, 2000) 5. The employees were enthusiastic about
the new project and saw it as a break from their monotonous tasks. The implementation of the new
package would make their work even simpler.
Having KPMG as the consulting partner also proved to be a smart move as well as of strategic importance
and helped in the success of the project. KPMG supported Cisco by providing them with the best of its
talent to assure that the job was completed successfully in the shortest time possible. Mark Lee, the
director of IT at KPMG was assigned the role of the program manager. Lee was responsible for
researching the various ERP softwares and making suggestions about the perfect fit. The selection of
vendors was a tough task and the team went about checking for references and the flexibility of vendors.
Bidders were provided with substantial data to present the advantages of their software and how it would
fit Ciscos systems and business requirements.
Choosing Oracle can be regarded as the major reason for the successful implementation of the project.
Oracle Applications, consisting of an integrated suite of more than 75 software modules for financial
management, supply chain management, manufacturing, project systems, human resources, and sales and
service management (Bala et al., 1994) 6 and long-term functionality gave it an edge over the rest of the
vendors. Further, the close proximity to Cisco headquarters ensured Oracle could assist them easily. As a
result of this flexibility, Cisco were able to complete the project before the start of their Q4.
4 Shapiro, B. P., Rangan, V. K., & Sviokla, J. J., (2004). Staple yourself to an order.
Harvard Business Review, Vol. 82, Issue 7, pg. 162-171
5 Apostolou, Apostolos. (2000). Employee Involvement. Available:
http://www.urenio.org/tools/en/employee_involvement.pdf. Last accessed 16th Nov
2014.
6 Sriram Bala, Brandy Baumback, Christine Chen, Emily Chen, Shailesh Kumar,
Sridhar Lakshminarayanan, Nagaraj Srinivasan, Rosalyn Vu, Nancy Kane, Scott
Malcolm, Zoe AntliffMitchell, Susan Saperstein (1994). Oracle Capacity Technical
Reference Manual. California: Oracle. 15.

Implementation of ERP
The managers were very particular about the team members that will work on the project. Elizabeth Fee
ensured that the best of their employees were selected for this project and were placed under modules
they were efficient at, this ensured that there would be sufficient quality manpower to complete the
project as per schedule. The project was majorly managed by Ciscos business manager, Tom Hobert and
KPMGs project manager, Mark Lee, both had immense experience in handling such a huge project.
Sufficient manpower ensured that module had its own information systems leader, business leader, and IT
leaders. This helped to run the departmental process and functionality in parallel and not one after the
other, saving a lot of time. Solvik had proposed the big-bang approach rather than risking by installing in
small increments (Chopra et al., 2006)7.
The implementation of the project was done in four phases know as Conference Room Pilot (CRP). The
Oracle application had close to 75 different modules, hence it was necessary to train the team members on
these applications.
Project Initiation Phase:
The CRP0 focused on the training of the team members and their classification. Cisco was lucky to get
the course shortened to just two days, whereas generally analyzing the package takes close to 6 months.
The team along with the Oracle and KPMG experts had prepared the plan of the project. In 3-4 weeks of
progress the accuracy being achieved was close to 80%. Cisco had earlier on decided not to make any
modifications in the existing package, but to meet their requirements significant changes would be
required.
Development phase:
The CRP1 phase focused on the implementation of the modules into the Cisco systems. The team
members documentation were prepared to implement a process and would hold discussions with the
experts/track leaders in case of any errors or contingencies. The phase also reflected the large number of
business processes that could not be supported by the software and required customization/modification.
The implementation team would find out the gaps and prepare a separate customization document which
would categorize the modifications (Bistasolutions, 2011) 8. Cisco was lucky in this concern, even with so
many changes taking place the budget was affected in a very small way.
Acceptance testing and Data warehousing:
CRP2 stage dealt with data warehousing, the main purpose of the ERP package is to integrate all
departments and provide a single platform for sharing resources and sourcing information instead of
doing it point-to-point. Major changes in identification of customers, products, Bill of Materials took
place to suit the requirements of data warehousing platform. The role of data warehousing would
streamline a companys information flow and provide management with real time operating information
(Davenport, 1998)9. All necessary customizations are completed in this phase and testing of the integrated
modules is scheduled.
7 Chopra S. & Meindl P., Supply Chain Management Strategy, Planning &
Operations, The role of IT in a Supply Chain, 3rdInternational Edition, Pearson
Prentice Hall, pp. 482-490
8 Bistasolutions (2004).Enterprise Resource Planning (ERP) Implementation in
Phases. Available at: http://blogs.bistasolutions.com/2011/12/13/erpimplementation-phase/ Accessed: 15th Nov 2014

Data Migration phase and Go live:

The final phase CRP3 is where all the existing data is transferred into ERP system (Bistasolutions,
2011)10. All the required tests are performed and the software goes live. There were some initial hurdles to
the functioning of the software which are considered as the risks and cut overs. Testing was done on one
set of data, which was very less when compared to the real time scenario. Further, the systems hardware
were not prepared to handle the high volume of data and had to be upgraded. Cisco were lucky again on
this regard as the contract had been made on the basis of capability and not capacity, due to which the
hardware company had to put in the additional components without charging additionally.

Recommendations and Conclusion:

Pete Solvik played a major role in bringing in the software at the right time, he bought in the right
consultants and drafted the perfect plan which ensured that the package was ready on time and within
budget. The implementation of Oracle over other ERP packages helped Cisco dominate the market.
Solvik was quick to shift from his initial vanilla solution approach to customization and that saved Cisco
a lot of time. Not to forget the distribution of responsibilities and selection of team members had been
well coordinated and organized, benefitting the company in several ways. Further, the contractual terms
with the vendors was a smart move which saved the company a lot on the hardware upgrade. The
implementation of the package has benefitted Cisco in several ways, the revenue of Cisco increased by
380% in four years.
Cisco should improve their testing methodologies and processes, instead of restricting to testing on a
single set of data they could run several verticals. Further, there are several softwares available
specifically for testing purposes such as the SAP R/3 (real-time, 3-tier), SAP R/2. These could be used to
test the functioning of the software in different conditions.
Over the period of time there have been several sequential developments in the field of ERP, which has
eliminated real time errors. The inclusion of cloud into the package has reduced the requirement of huge
hardware components and improves system efficiency. The backup and recovery systems eliminates risks
of data loss. The security risks involved have also been reduced a large extent. Several new modules have
been integrated to the package such as supply chain, e-commerce, supplier visualization, human resource.
These assist to save time and money, if Cisco were to re-implement a similar project it could be
successful attributing to the above factors.

Appendices:
Table 1: Critical Success Factor while implementing ERP (Plant and Willcocks, 2007) 11.
9 Davenport, T. H., (1998). Putting the enterprise into the system. Harvard Business
Review, Vol. 76, Issue 4, pg. 1-10
10 Bistasolutions (2004).Enterprise Resource Planning (ERP) Implementation in Phases.
Available at: http://blogs.bistasolutions.com/2011/12/13/erp-implementation-phase/
Accessed: 15th Nov 2014

11 Plant, Robert and Wilcocks,Leslie. (2007). CRITICAL SUCCESS FACTORS IN

INTERNATIONAL ERP IMPLEMENTATIONS: A CASE RESEARCH APPROACH.Available:
http://paul-hadrien.info/backup/LSE/IS%20470/litterature%20review/CSF%20ERP
%202.pdf. Last accessed 16th Nov 2014.