Irma Indriatni S (29112448) Karina Sastavinadia (29112055)

Sheila Agustin (29112541)

Widia Mulyani (29112448)

leading and chage management

CISCO Systems, Inc: Implementing ERP

Leading and Management Change

Syndicate 4

Cisco

Presentation

Overview

1. Outline Presentation

8. Cisco Vision and Mission

2. CISCOs Timeline
3. Product and Services

9. Strategy Map
10.DICE of CISCO

4. Problem Identification
5. SWOT Analysis 6. Porters Five Forces 7. 7s Framework
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implementing ERP
11.Summary 12.Lesson Learned

leading and chage management

OUTLINE
In 1994, Cisco Systems Inc. made the decision to implement a new company wide ERP system. Lessons learned contains summaries of the major success drivers and flaws in place, which contributed to the successful rollout of Ciscos 15 million dollar ERP project in only nine months.

P R E S E N TAT I O N

Initially, a large ERP solution was not a choice Cisco was willing pursue because of the nature of large project to become out of control and largely over budget. However, the legacy system in place constantly needed maintenance and the available upgrade was much too small for Cisco, which was growing at an astonishing 80% per year.

Finally, examined is the possibility of replication of Ciscos ERP implementation model by other firms, and a summary section of lessons learned.
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Our analysis details Ciscos choices, good and bad during the implementation process, and the circumstances involving intelligent and lucky decisions associated with the success of the project. Also, discussed is the degree of success the implementation had in terms of cost and performance. leading and chage management

CISCOs TIMELINE
1984 1988
1989 1990 1997 1998
Cisco Systems was found Two Stanford computer scientists . John Morgridge joins Cisco as President and CEO. Revenues reach $27 million. Cisco goes public, both founder sold all of their stock and left the company Ranked among the top five in Return on Revenues and ROA in Fortune 500 achieve a market capitalization of $100 billion in just 14 years.
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PRODUCT AND SERVICES

Router
- Combination of hardware and software that acts as

traffic cop on the complex TCP/IP networks that make up the Internet (as well as corporate intranet)
- Service provider and enterprise network edge by

delivering industry leading performance, instant-on service capabilities, high availability in a compact form factor
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Problem
WHY ?

Identification

System failure halted nearly the entire

business for two days

The current system was a UNIX-based software package was not going to be sufficient in coordination with the companys rapid growth. The gigantic growth experienced Cisco needed to look into their future due to unreliability and common outages brought into question the validity of trying to enlarge the current system to meet the Ciscos constantly growing needs.
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S W O T
Strengths
- Market dominant

A n a l y s i s
Weaknesses
- Database lacked capacity to process the required transaction load/volume within the Cisco environment - Low net income per employee - Decentralized functional organization

- Top 5 companies in return on revenues and return on assets - Strong backed from senior management - On time ship

- Repairing systems after problem arose

CISCO SWOT
Opportunities
- Emerging markets - Unified Communications - Other Tele Presence
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Threat
- Fast growing of internet technologies - Unseen competitor - Increased global competition - Uncertain global economy
leading and chage management

PORTERS 5 FORCES

leading and chage management

7s Framework
Shared Value:

Style Vision : At Cisco, our vision is to change Strong leadership and backing Top management, the way people work, live, play and learn from communicative, fast response Structure : Build ERP team as a core implementation in each department Skill Hiring the best people, provide System training,mentoring and Centralized system from each department support their staff to limits in by using ERP achieving professional Staff excellent

Develop programs and policies to support our employees, work-life integration. Strategy: Explain further in Reward success team for ERP next Strategy Map
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CISCO VISION and MISSION

At Cisco, our vision is to change the way people

work, live, play and learn Cisco

Companys mission is to enable people to make

powerful connections-whether in business, education, philanthropy, or creativity.

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leading and chage management

STRATEGY MAP

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leading and chage management

S T R A T E G Y
F i n a n c i a l

M A P

P e r s p e c t i v e

1. To support growth company in the future, ERP

Implementation become Top Priority in the company, in order to increase the productivity so that the company will growth by developing a new software, hardware, and integrated system with cost $ 15 million
2. Expand Revenue Opportunities : build new line business

(enterprise , small/medium customer, service provider)

3. Enhance Customer Value : On time ship
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S T R A T E G Y
C u s t o m e r

M A P

P e r s p e c t i v e

1. Provide quick process and response to the

customer
2. Support lower costs, and improve availability the

risk management
3. Customers satisfaction through good service in

the speed, clarity, and ease of use.

4. Strove to deliver a wide range of new products 5. Build after sales service
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S T R A T E G Y
Internal Process

M A P

Perspective

Nurture good relation with supplier, partner, and

buyer.
Reduction in time, effort, cost to make changes and

releases (ex: service)

No service application rework
Improve analysis and scheduling of changes safety,

efficiently, and effectively to reduce the risk of changes affecting the live environment
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S T R A T E G Y
L e a r n i n g
Human Capital

M A P

G r o w t h

: Reward to the ERP Team, career advancement

:

possibility.
Information Capital 1. 2.

Added capacity to the integrated system ERP system supporting the rapid growth that the company expected and desired Centralized the system management structure over the department. Organizations started to recognize the value of their information networks and the Internet as a source of business advantage; all of this drove companys mission and vision.
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3. 4.

STRATEGY MAP (Continue)

L e a r n i n g
Organization Capital:
1. 2.

G r o w t h

Strong leadership from Top Management Nurture good teamwork, benchmark against industry in best practice Establish improvement actions

3.

4. Assessment process and employee performance 5.

Integrated system that more reliable and efficient (centralized)

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leading and chage management

DurationIntegrityCommitmentEffort
Duration : time until the change program is competed if it has a

short life span ; if not short, the amount of time between reviews of milestones.
Integrity : ability to complete the initiative on time. That depends

on members skills and traits relative to the projects requirements

Commitment to change that top management (c1) and

employees affected by the change (c2) display.

Effort over and above the usual work that the change initiative

demands of employees.
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DICE

FRAME WORK (Duration)

Analyze Ciscos financial year : Aug 1 July 31, Constraint

was it cannot implement in Q4, Another option was to implement in July/August 1995 but was rejected because it is too late.
So they worked backwards

Q3 should go live System should be completely stable by Q4 So the target date was set to February 1995

Project time line :

9 Months,
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target date : Feb 1995

Success
leading and chage management

DICE FRAME WORK (Integrity)

Structure of Project Team: Sought the best people.

5 Track teams -> PMO-> Executive Committee to intervene directly in project Steering

Implementation partner KPMG

KPMG had both the technical skills and business knowledge; helped in selection and implementation of ERP solution

Incentives: Reward for the ERP Team - Over $200,000 cash bonus. Success had a huge upside while failure meant threat of job losses.
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DICE FRAME WORK (Commitment)

1. Commitment from CEO and CIO 2. ERP

project status and complete implementation became top priority for the company 3. Commitment from Oracle, hardware vendor, and KPMG eventually stabilized the software and improved performance
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DICE FRAME WORK (Effort)

1.

Prototyping: Rapid, iterative implementation was broken down into a series of phases called CRP s to build on previous work to develop a deeper understanding of software and it functioned withing the business environment.
Extend Ciscos relationship with KPMG Expand team from its core 20 members to abot 100 members (cross section) Steering committee meeting celebratory events

2. 3.

4.

5.
6.

Focused on getting the team trained on the Oracle application

ERP project status become the number one agenda item for weekly executive staff meeting.
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DICE SCORE (D+2I+2C1+C2+E)

DURATION : 4 (due to more than 8 months)
INTEGRITY : 1 (due to has capable employee + strong

leadership)
Commitment (1) : 1 (very consistent and communicative)
Commitment (2) : 2 (just willing with worry + reluctant) Effort : 4 ( extra additional work)

SCORE : 4+2(1)+2(1)+2+4 = 12 Win Zone

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SUMMARY
CISCOs ERP project was a successful implementation in a short

amount of time (9 months) and within a small budget for the large size of the project ($15 million). Success Factors:
1. Implementing an ERP system was top priority in the company
2. Backing support from executives 3.

Best people were on the project

4. Strong relation and appropriate vendor

5. Very timely 6. A bit of luck
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SUMMARY (continue)
CISCO Past and Now
Cisco in 1998 Employees: Market Cap.: Sales 14,500+ $100 Billion+ $8.45 Billion+ Cisco in 2012 66,639 $130.63 Billion + (2013) $46 Billion

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leading and chage management

Lesson Learned (+)

Leadership the formation of a team that was quick acting

and concise was one of the largest success drivers for the project. The team got corporate backing and support from the entire company to drive the point that this was going to be the new way of business
Planning Planning carried the project a long way. The initial

planning and analysis of project scope, partners, and vendors was the single reason that the project was a success. CISCO found the best people for the job and what they received in return was the unsurpassed service from each of their partners.
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Lesson Learned (+) Continue

Contract Negotiation Contract negotiation is always an underlying

factor in any projects success. In the CISCO case a great contract born of great opportunity saved the company thousands of dollars and perhaps months of system configuration during the late stages of the implementation.
Be Persistent During the choosing of parameters and system

configuration the company decided to go 80-20 on parameter settings and cram months of research and choices into 2 days. The project had been going extremely well up to this point and if CISCO would not have rushed this as much they would not have encountered the same amount of problems with scope and capacity if they simply would have taken more time and been persistent with their planning.
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Lesson Learned (-)

Weaknesses during ERP approach of CISCO :
1. The team jammed the configuration session into 2 days with

40 people. Normally an approach would be to analyze the system for approximately 6 months, but CISCO team met for only 2 days, working into the night, to come up with an 80-20 recommendation on how to configure the ERP system.
2. The system was going to require a much larger amount of

customization than initially believed. After one month of design, they realized that there was going to be a need for changes, after 2 months, they realized that the changes were going to be sizeable. 27 leading and chage management

Q&A Session
MEMBERS: Irma Indriatni S (29112448) Karina Sastavinadia (29112055) Sheila Agustin (29112541) Widia Mulyani (29112448)
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leading and chage management