For Office Use:

Grade
Case Background

Case reviews the Cisco Systems approach to implement Oracles enterprise resource
planning (ERP) software product.
It studies various diverse, critical factors and obstacles which were faced by Cisco during
ERP implementation.
Deterioration of Ciscos legacy environment in functional areas which leads to
implementation of ERP.

About Cisco System Inc.

Cisco systems was founded by two Stanford computer scientist in 1984 and was traded in 1990.
The company started its production from routers that handles complex IPs. As the demand of
internet increased the companys revenue increased rapidly and was also listed in the top 5 of
fortune 500 companies and was in head to head competition with Microsoft and Intel. John
Morgridge was hired the CEO and he was given the task to build a professional team for taking
the company forward. The CEO believed in a more centralized structure rather than a
decentralized one which also led to a falling with the founders who sold all their shares
eventually.

History of IT at Cisco
Pete Solvik joined Cisco in January 1993 as the companys CIO. When Pete Solvik joined the
company in 1993, it was a 500$ million company and was running a UNIX- based software
package. The package supported financial, manufacturing and order entry systems. At first,
Solvik didnt believe in ERP solutions and all his departments were independent of each other to
make its own decisions. The apprehension about ERP was also because of the magnitude of
implementation that it required. Eventually the necessity of implementation of ERP system was
realized when the manufacturing department started facing problems like system outages and
buying of new packages.
Factors led to Implementation of ERP

The manufacturing department started facing problems like system outages and buying of
new packages.
Failure of ciscos legacy environment showed the short comings in existing systems. The
shortcomings of the Cisco systems were so big that it was hard to ignore them.
An unauthorized method for accessing the core application database malfunctioned,
corrupting Ciscos central database.
Due to inability of system to perform a workaround caused corruption of database which
resulted in shut down of company for two days.

Therefore, the company decided to have ERP implementation which would link order entries and
financial groups in the company and hence there would be quicker and real decision making.
They wouldnt go for phase implementation but all at once as otherwise it would take a longer
time.

Selecting an ERP Product

Solvik knew that the implementation was big and hence he made it a point to hire people who
wouldnt give up and everybody should be involved, not just the IT department. Cisco required a
partner with great technical skills and business knowledge, so they selected KPMG as their
integration partner. Team of 20 people were formed to identify the best software packages.
Hiring an experienced consulting team (KPMG) and bringing together a team of stakeholders
from around the company helped the company build as much knowledge as possible by
leveraging in-house knowledge and the experiences of others. Also, forming an executive
Steering Committee provided high level sponsorship for the project, to ensure visibility, and to
motivate the team. By tapping research sources such as the Gartner group, cisco narrowed the
field to five packages within two days. Following Ciscos analysis, each team was then told to
come and demonstrated their products in the next three days. Oracle was selected. Selection of
Oracle was based on three of the major decision points:-

1|Page
 This project was being driven pretty strongly by manufacturing and Oracle had a better
manufacturing capability than the other vendor.
They made a number of promises regarding the long term development of functionality in the
long package.
Flexibility offered by the oracle as the headquarters of both were 20 miles away from each
other.

Seeking Boards Approval

Before going to the board for approval, the team needed to answer two important questions:
How much would it cost?
How long would it take?
By Systematic thinking and involvement of all partners, taking all factors into consideration
the total cost for the project was expected to be $15 million and the time duration for
completing the implementation process was 9 months.
This project was single largest capital project approved by the Cisco.
Implementing the ERP project was the priority for the Cisco and it emerged as one of the
companys top seven goals for the year.

Building the Implementation Team

With board approval, the ERP team started setting up a structure for the implementation.
KPMGs performance through the software selection process and its commitment to staff led to
extended relationship between cisco and KPMG. The team had to expand from its core 20
members to about 100 members. Team members were placed onto one of five tracks. Each track
had the following:

Cisco information system

Cisco business leader
Business and IT consultants

All the tracks were managed from a project management office which included: Ciscos
business project manager, Tom Herbert and the KPMG project manager, Mark Lee. All these
were controlled by executive steering committee composed of:

2|Page
 Vice President of manufacturing
Vice President of Customer advocacy
Oracles senior VP of applications
Partners in-charge of West Coast consulting for KPMG

Implementing Oracle
The teams implementation strategy employed a development technique referred to as rapid
iterative prototyping. Using this approach, the members broke the implementation into a series
of phases called Conference Room Pilots (CRPs). Each CRPs purpose was to build on
previous work to develop a deeper understanding of the software and how if functioned within
the business environment.

CRP0

It began with training and implementation team and setting up the technical environment. It
focused on getting the team trained in Oracle applications. It also focused on getting up the
application and running. Team members from all areas of company were locked in an off-site
meeting. To discuss appropriate setting for hundreds of parameters within software. Team
members were joined by specialist from Oracle and KPMG. Teams experience during the first
phase of project indicated that without significant number of changes software will not support
effectively.

CRP1

The goal of this phase of the project was for each track to make the system work within its
specific area. Emphasis was on getting the system to accommodate cisco processes without
modification. Team members generated detailed scripts that documented the purpose for and
procedures used to complete a process. To ensure all contingencies were accounted for, business
process prototype tracking sheets were deployed. Team members carefully documented issues
while modelling, which were addressed in weekly three-hour meetings held by program
management office. There were huge number of business processes that the software couldn't
support. The teams response to gaps was to develop a means for categorizing and evaluating
each gap individually. Need to modify oracle led to unplanned changes in the project plan and

3|Page
budget. Implementation team determined oracle package would not adequately support after
sales support needs of the company. So, team embarked on a concurrent effort to evaluate and
select a service support package.

CRP2

In the CRP2, the implementation team found itself in the most difficult part of the
implementation. The project scope had expanded to include major modifications and new after
sales support packages. A new approach was employed by the team in which all data
communication took place via data warehouse. Utilization of a data warehouse allowed all of
ciscos applications to access a single source for their information needs. It group started moving
from their other projects and spent time on the core project in the company which was changing
and needed more energy and resources. The implementation team continued to deepen its
understanding of the oracle and service packages and determined how to best make them work
for cisco. The final goal of crp2 was to begin testing the system to see how well it would stand
up to the processing load.

CRP3

Its focus was on testing the full system and assessing the companys readiness to go live. A
final test was conducted to see how the system would perform with a full transaction load. At the
end of crp3 each one of the functional leads presented its piece of the process results and later the
system was put into action.

Cutting Over to the Oracle

The initial success of the oracle system was something less than expected. On an average, the
system went down nearly once a day.

The Primary Problem:

Hardware architecture and sizing. Correcting the deficiency required additional hardware
purchase which would increase the total expenditure. Cisco had purchased the equipment on the

4|Page
basis of promised capability as a result the responsibility for fixing the hardware problems fell on
the hardware vendor.

The Second Problem:

Ability of the software to handle the transaction volume required in the Cisco. The company had
gone wrong in its final testing of the system. Cisco had run individual processes sequentially
rather than at the same time. After cutover, when processes were running together system lacked
the capacity to process the required load.

Overcoming of The Problem:

ERP project status became the number one agenda item for weekly executive staff meetings.
Strong vendor commitment from oracle, the hardware vendor and KPMG led to an eventual
stabilization of the software and improved performance.

After Stabilization
Problems associated with implementation of oracle was short-lived. Over the next three months
on its implementation cisco and its vendors together stabilized and added capacity to the system.
Thus, successful implementation of the system was concluded with a celebration party for the
team and the company management.

5|Page