Syndicate 4 - CISCO Case

7/29/2019 Syndicate 4 - CISCO Case

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C I S C O S y s t e m s , I n c :

I m p l e m e n t i n g E R PLeading and Management Change

Irma Indriatni S (29112448)

Karina Sastavinadia (29112055)

Sheila Agustin (29112541)Widia Mulyani (29112448)

Syndicate 4

leadingandcha

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management


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Sy d cate 4

Cisco Presentation Overview

1. Outline Presentation

2. CISCOs Timeline

3. Product and Services

4. Problem Identification

5. SWOT Analysis6. Porters Five Forces

7. 7s Framework

8. Cisco Vision and Mission

9. Strategy Map

10.DICE of CISCOimplementing ERP

11.Summary

12.Lesson Learned

leading and chage management2


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O U T L I N E P R E S E N T A T I O N

In 1994, CiscoSystems Inc. made

the decision toimplement a new

company wide ERP

system.

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.

Our analysis details Ciscos

choices, good and bad during

the implementation process,

and the circumstances

involving intelligent andlucky decisions associated

with the success of the

project. Also, discussed is the

degree of success the

implementation had in terms

of cost and performance.

Finally, examined isthe possibility ofreplication of

Ciscos ERPimplementationmodel by otherfirms, and asummary section oflessons learned.

Lessons learnedcontains summariesof the major success

drivers and flaws inplace, whichcontributed to thesuccessful rollout ofCiscos 15 milliondollar ERP project in

only nine months. leading and chage management3


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CISCOs TIMELINE

Cisco Systems was found Two Stanfordcomputer scientists .1984

John Morgridge joins Cisco as President

and CEO.

1988

Revenues reach $27 million.1989

Cisco goes public, both founder sold allof their stock and left the company1990

Ranked among the top five in Return onRevenues and ROA in Fortune 5001997

achieve a market capitalization of $100billion in just 14 years.1998



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P R O D U C T A N D S E R V I C E S

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-onservice capabilities, high availability in a compact

form factor



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Problem Identif ication

System failure halted nearly the entirebusiness for two days

WHY ?

The current system was a UNIX-based software package wasnot going to be sufficient in coordination with the companysrapid growth. The gigantic growth experienced Cisco needed

to look into their future due to unreliability and commonoutages brought into question the validity of trying to enlargethe current system to meet the Ciscos constantly growingneeds.



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S W O T A n a l y s i s

Strengths

- Market dominant

- Top 5 companies in return on revenues andreturn on assets

- Strong backed from senior management

- On time ship

Weaknesses

- Database lacked capacity to process therequired transaction load/volume within theCisco environment

- Low net income per employee

- Decentralized functional organization- Repairing systems after problem arose

Opportunities

- Emerging markets

- Unified Communications

- Other Tele Presence

Threat

- Fast growing of internet technologies

- Unseen competitor

- Increased global competition

- Uncertain global economy

CISCO SWOT



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P O R T E R S 5 F O R C E S



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7s Framework

Shared Value:

Vision : At Cisco, our vision is to changethe way people work, live, play and learn

Structure : Build ERP team as a coreimplementation in each department

System

Centralized system from each departmentby using ERP

Staff

Develop programs and policies to supportour employees, work-life integration.Reward success team for ERP

StyleStrong leadership and backingfrom Top management,communicative, fast response

SkillHiring the best people, providetraining,mentoring andsupport their staff to limits in

achieving professionalexcellent

Strategy: Explain further innext Strategy Map



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C I S C O V I S I O N a n d M I S S I O N

At Cisco, our vision is to change the way people

work, live, play and learn Cisco

Companysmission is to enable people to make

powerful connections-whether in business,

education, philanthropy, or creativity.



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STRATEGY MAP



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S T R A T E G Y M A PF i n a n c i a l 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 companywill 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 M A PC u s t o m e r P e r s p e c t i v e

1. Provide quick process and response to thecustomer

2. Support lower costs, and improve availability therisk management

3. Customers satisfaction through good service inthe 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 M A PI n t e r n a l P r o c e s s P e r s p e c t i v e

Nurture good relation with supplier, partner, andbuyer.

Reduction in time, effort, cost to make changes andreleases (ex: service)

No service application rework

Improve analysis and scheduling of changes safety,efficiently, and effectively to reduce the risk ofchanges affecting the live environment



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S T R A T E G Y M A PL e a r n i n g G r o w t h

Human Capital : Reward to the ERP Team, career advancementpossibility.

Information Capital :

1. Added capacity to the integrated system

2. ERP system supporting the rapid growth that the company expectedand desired

3. Centralized the system management structure over the department.

4. Organizations started to recognize the value of their informationnetworks and the Internet as a source of business advantage; all ofthis drove companys mission and vision.



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STRATEGY MAP (Continue)L e a r n i n g G r o w t h

Organization Capital:

1. Strong leadership from Top Management

2. Nurture good teamwork, benchmark against industry in bestpractice

3. Establish improvement actions

4. Assessment process and employee performance

5. Integrated system that more reliable and efficient (centralized)



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D u r a t i o n I n t e g r i t y C o m m i t m e n t E f f o r t

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, target date : Feb 1995 Success



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DICE FRAME WORK (Integrity)

Structure of Project Team: Sought the best people.

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

Implementation partner KPMG

KPMG had both the technical skills and businessknowledge; helped in selection and implementation of

ERP solution

Incentives: Reward for the ERP Team - Over$200,000 cash bonus. Success had a huge upsidewhile failure meant threat of job losses.



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DICEFRAME WORK (Commitment)

1. Commitment from CEO and CIO

2. ERP project status and completeimplementation became top priority for thecompany

3. Commitment from Oracle, hardware vendor,

and KPMG eventually stabilized the softwareand improved performance



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DICEFRAME WORK (Effort)1. Prototyping: Rapid, iterative implementation was broken down into

a series of phases called CRPs to build on previous work todevelop a deeper understanding of software and it functionedwithing the business environment.

2. Extend Ciscos relationship with KPMG

3. Expand team from its core 20 members to abot 100 members(cross section)

4. Steering committee meeting celebratory events

5. Focused on getting the team trained on the Oracle application

6. ERP project status become the number one agenda item forweekly 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 = 12Win Zoneleading and chage management22


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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 Cisco in 2012

Employees: 14,500+ 66,639

Market Cap.: $100 Billion+ $130.63 Billion +

(2013)

Sales $8.45 Billion+ $46 Billion


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Lesson Learned (+)

Leadershipthe formation of a team that was quick actingand 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

PlanningPlanning carried the project a long way. The initialplanning and analysis of project scope, partners, and vendorswas 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 underlyingfactor 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 theimplementation.

Be Persistent During the choosing of parameters and systemconfiguration 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 with40 people. Normally an approach would be to analyze thesystem for approximately 6 months, but CISCO team met foronly 2 days, working into the night, to come up with an 80-20recommendation on how to configure the ERP system.

2. The system was going to require a much larger amount ofcustomization than initially believed. After one month ofdesign, they realized that there was going to be a need forchanges, after 2 months, they realized that the changes weregoing to be sizeable.



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Q&A Session


MEMBERS:

Irma Indriatni S (29112448)

Karina Sastavinadia (29112055)

Sheila Agustin (29112541)

Widia Mulyani (29112448)


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Syndicate 4 - CISCO Case