Upload
nitish-shah
View
227
Download
0
Embed Size (px)
Citation preview
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 1/20
1
MGB 207 – Team 3
Cisco ERP implementation case
Joann SuenSeema Sangari
James SunSekhar Varanasi
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 2/20
2
Founded in 1984, IPO in 1990Primary product at that time-router High growth company-return on revenues andon assetsFirst acquisition – Crescendo communication inSept 1993By 1997, its first year on the Fortune 500On July 17,1998, market cap passed the 100billion mark
Company Background
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 3/20
3
Infrastructure
1. Running a UNIX-based software package to supportcore transaction processing
2. Function areas supported by the separate packages -financial, manufacturing, order entry systems
Governance
1. Only core IT infrastructure spending was centralizedand budgeted out of general overhead accounts
2. Most IT expenditures delegated to individualbusiness unit-Client Funded Model
Background - Cisco IT
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 4/20
4
IT Problems
“It had become too much spaghetti, too customized” -PeteSolvik
The original upgrade/patch approach made little progress,system outage became routine, hard to recover from outage
It would take too long to get applications in place by makingdecision and implementation separately within group
It would take a lot longer to implement a too customizedsystem to end up as a mega-project
Systems were on the brink of total failure
Background - Cisco IT
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 5/20
5
Vendor/partner evaluation
Not all vendors can serve a billion-dollar companyERP is a commodityERP usually has 10 to 12 year life spanHorizontal, functional and external integration aspects
Think about product scalability (rich features, security,etc.)Service scalability (partner, 3 rd party vendor support, etc)How quickly can the vendor support the market changes
(e.g. SOX, M&A, etc.)Contract friendliness – “Am I getting a good deal?” What is the TCO (Licensing, implementation cost,
support, infrastructure needs, etc.)
What is the criteria in ERP vendor evaluation …….
How did Cisco do……?
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 6/20
6
Cisco’s evaluation
Implementation partner should have – Technical skills, business
knowledge, prior ERP implementation experience and “eagerness”to work with Cisco – Mant ra “Strong Cisco team” needs strongpartner
Major decision points for vendor selection – “Vendor size”,“Strong manufacturing capabilities”, “Long -term R&D investment”
and “How close is the vendor”
Vendor evaluation process –
Reference calls (to Big “six”, research groups to identify topERP vendors )
Hone down from 5 packages to “two” in 2 days after evaluating features
Sent for request for proposal (RFP), attend vendor demos
“Oracle you won , [other vendor] you lost”
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 7/207
ERP implementation Cost
Software (Licensing)
HardwareSystem integration
Consulting resources (this is largest portion of the entire costs)
Internal resources (pulled out to work on ERP implementation)
Training costs (Gartner recommends 17% of the total cost) It is not uncommon to use industry benchmarks
Company sales (US$ Billions) *source AMR research
E x p e n
d i t u r e s
( U S $ M i l l i o n s
)
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 8/208
Cisco cost estimates
Cisco’s justification
No cost-benefit analysis “We are going to do business this way” – management
commitment to change
Customers and Competitors
Cost avoidance will be costly consequenceEstimated at $15M based on then revenues
Boy! How do I tell ya…Cost of ERP is like weather
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 9/209
Implementation Timelines Cisco’s financial year : Aug 1 – July 31
Constraint was it cannot implement in Q4Another option was to implement in July/August 1995 but wasrejected because it is too late
So they worked backwardsQ3 should go liveSystem should be completely stable by Q4So the target date was set to February 1995
Project time line : 9 Months, target date : Feb’ 1995
% of respondents from 479 US manufacturing companies surveyed by AMR research 1994
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 10/2010
ERP customization
Lets go “Vanilla” with some parameter changes to
system -> Well, I need some customization -> 2 monthslater - > I need sizable customization…..so what is thebig deal?
ERP customization vs BPR
Strategic decision to reduce customization as muchpossible in order to simplify future migration and upgradeprojects
Customizations cost time and money initially and for life
of the softwareThey are deviations from the best business practices
already developed by the vendor
By the way Cisco kept it to minimum
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 11/2011
Other issues anddecisions
Immediate upgrade?
It wasn’t an IT -only initiative
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 12/2012
Structure of Project Team: Sought the best people;5 Track teams -> PMO-> Executive Steering Committee
Implementation partner – KPMG KPMG had both the technical skills and business knowledge;
helped in selection and implementation of ERP solutionIncentives: Reward for the ERP Team - Over $200,000 cashbonus. Success had a huge upside while failure meant threat of
job losses.
Management Choices
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 13/2013
Prototyping: Rapid, iterative implementation wasbroken down into a series of phases called CRP’s.
CRP 0: Training and Configuration of Oracle
package. Approach - 2-days offsite and 80-20
CRP 1: Detail documentation and analysis of eachfunctional area. Needed another package to support
after-sales.
CRP 2 & 3: Centralized data warehouse developed.Final Testing with full load of users.
ImplementationMethodology
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 14/20
14
Crunch time
Testing and “Go Live” Official Testing begins at the end of CRP2
Full system testing and assessment of company’s readinessto “Go Live” during CRP3 “Go Live” Readiness was determined by each track team,
specifically each functional lead “Go Live” Date: January 30th 1995
Testing MethodTesting did not occur at CRP0Testing was not broken down into phase, e.g. Alpha, Beta,
etc.
“Go Live” Method Big Bang roll out
“Go live” determined by each functional lead, rather than onelarge entity
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 15/20
15
Wrap upTotal system replacement: $15 million, 9 monthsInitial Problems with Cisco ERP System:
Decrease in Business Performance due to an unstablesystem
Database lacked capacity to process the required transactionload/volume within the Cisco environment
ResolutionSwat Team-like Mode (3 months):ERP project status and complete implementation became top
priority for the companyCommitment from Oracle, hardware vendor, and KPMG
eventually stabilized the software and improved performance
Long Term Effects:Added capacity to the systemERP system would fulfill the promise of supporting the rapid
growth that the company expected and desired
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 16/20
16
Wrap up continued…..
Cisco in 1998 Cisco in 2007
Employees: 14,500+ 61,500+
Market Cap.: $100 Billion+ $194.56 Billion
Sales $8.45 Billion+ $34.9 Billion
Why Successful?
Implementing an ERP system was top priorityBuy-in from executivesHigh visibility projectBest people were on the project
Strong vendor relations and vendor’sdetermination for success
Very timely
Cisco then and now
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 17/20
17
Q & A
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 18/20
18
Wrap up
7/22/2019 Cisco ERP v12 - case study analysis
http://slidepdf.com/reader/full/cisco-erp-v12-case-study-analysis 19/20
19
Backup slides