CISCO SYSTEMS ARCHITECTUREERP & WEB ENABLED IT

Presented By Group 2Ayush Garg Mayank SharmaSavya S Yadav

SITUATIONAL ANALYSIS – VISION NEW WORLD NETWORK

Founded by 2 Stanford computer scientists in 1984

1997 – First year in Fortune 500 Brought public in 1990 Passed $100 billion in 14 years Core focus is routers CIO Peter Solvik vision – “Internet

Experts – The Global Internet Company

SITUATIONAL ANALYSIS – VISION NEW WORLD NETWORK

Cisco Challenged world of three independent proprietary network Phone network for voices The local and wide area network for data Broadcast network for videos

Digitization enabled the convergence of three networks

Made it possible to transmit voice, data and video over the same network

TOP MANAGEMENT

Don Valentine, initial VC for Cisco Reserved right to bring in professional

management After 1990 IPO both founders sold their

stock and left Cisco John Chambers became CEO in1995

after coming from Wang Laboratories in 1991

BUSINESS STRATEGY

Assemble a broad product line so that Cisco can serve as one stop shopping for business network

Systematic Acquisitions – 2/3 of product line was in house and 1/3 by acquisitions

Set industry wide standards for networking – Issued networking licenses to major telecom majors

Pick the right strategic partner : Partnered with Microsoft for security over network , MCI for premium internet services, HP to sell corporate systems

Goals Become lead architect and provider for new Internet-based infrastructure Change the way companies and industries operate

Ultimate focus is on customer success - ‘dedication to customer success’

CISCO STRUCTURE

Emphasis on maintaining structure through periods of growth

Three “lines of business” (decentralized) Product marketing Research and Development

Centralized organizations Enterprise, Small/Medium Business, Service Provider Manufacturing Customer support Finance Human resources Information technology Sales organizations

DIGITAL TRANSFORMATION

Entry of Peter Solvik in 1993 from Apple Discovered two challenges for Cisco

The Cisco IT system was too traditional – viewed as cost center reporting to accounting.

Current system could not scale to support Cisco’s growth nor robust enough to manage managements expectations.

PROPOSALS

IT reporting went to Senior VP of customer advocacy

IT budget was returned to functions with a very small portion going to General and Administration Expenses.

Central IT steering committee was disbanded, the IT implementation/investing decisions to be taken by LOB.

CRISIS

Cisco’s legacy system failed in 1994 Unauthorized method for accessing

core application database. Corrupted central database. Shutdown for 2 days. Exposed need for alternative approach

(autonomous approach to systems replacement deemed insufficient)

DECISION ANALYSIS

Manufacturing perspective Have order entry and financial groups perform a single

integrated replacement of all applications Monolithic IT projects could take lives of their own

Cisco wanted to act quickly (no phased implementation/little customization)

Create a doable schedule that was a company priority Don’t mirror existing inefficient practices (instead,

retrain people to do things according to new system) Decision to implement ERP was Technology Driven Implementation would not be done phased – “Big

Bang Approach”

SELECTING AN ERP PRODUCT

Could not make project as IT Only initiative.

Pulled best people from various departments to give direction to product.

KPMG chosen as implementation partner – Experienced and saw opportunity to build in ERP implementation.

A team of 20 put to market research for identifying the best software package

SELECTING AN ERP PRODUCT

10 days writing Request for Proposals Given 2 weeks to respond

Invited in for 3 days to demonstrate software Given sample data

Entire decision process took 75 days• Cisco narrowed field to 5 packages in 2 days• Oracle won project – stronger manufacturing

capability, made long term promises regarding functionality, flexibility offered by closeness

SELECTING AN ERP PRODUCT

Oracle wanted to win badly – Cisco implementation first major implementation of new ERP product by Oracle

Cisco believed that Oracle was motivated to make the project a success

• Cisco project is 1st major implementation of a new release of the Oracle ERP product

• Oracle touting new version as having major improvements

Success would be favorable for both parties

GOING TO THE BOARD

QUESTION PROPOSED BOARDS REACTION

How much would it cost and how long would it take?

Original proposal was 15 months, then 5, but started in Q3 and wanted to be stable by Q4

Officially committed 9 months and $15 million for the project

Negative initial reactions

Board eventually approved the project.

Next step was to incorporate the internet

TOTAL BENEFIT ANALYSIS

Project completed successfully on time Formed centerpiece of the 2-yr $100 million series of

initiatives to replace all IT applications and platforms worldwide

In two year replaced legacy architecture/ Systems. High value/low cost architecture.

IT platform architecture Standardized throughout Cisco

100% UNIX at service level 100% Windows NT at LAN level 100% Windows Toshiba and HP PCs at the client level 100% Oracle at DB level 100% TCP/IP for worldwide network

TOTAL BENEFIT ANALYSIS

Standardization promoted flexibility R&D and marketing reorganized from multiple

business units to 3 lines of business Changes completed in less than 60 days for

less than $1M Completion of IP-based open standards

architecture initiative provided centerpiece of Cisco IT architecture

Foundation for next phase of strategy -> incorporating the Internet

INTERNET AND INTRANET APPLICATIONSAND BENEFITS

Cisco’s web development began when it discovered Mosaic.

They shifted from Mosaic browser to Netscape Browser after one year.

Initial 3 year investment cost : $115 million

ERP cost : $15 millionWeb-enablement cost : $100 million

KEY COMPONENTS OF INTRANET & INTERNET

Intranet Internet EIS and DSS Employee Self ServiceCommunication and Distance Learning Collaboration and workflow ManagementWeb-enabled legacy Systems

Extranet Supply Chain (informationTransparencyCustomer self-service through websiteNet commerce through the webMarketing through the webAny place access through the web

INTERNET AND INTRANETAPPLICATIONS AND BENEFITS

Cisco Connection Online (CCO)With this program the user directly contributed information required to do business with CISCO or enriched Cısco’s Intellectual asset base. This allowed others to do business more efficiently and effectively with Cisco.

Intranet of CiscoLinks to Vendors and Customers allowed Cisco to collaborate more efficiently with those outside the company.The intranet also provided a proving ground for New Cisco technologies and products

EMPLOYEE SELF SERVICE: INTERNALAPPLICATIONS

Majority of Cisco’s internal applications were web-enabled. i.e EIS, DSS, training, self-service HR

Cisco Systems’ corporate intranet, Cisco Employee Connection provided centralized access to the information, tools and resources needed to streamline processes, facilitate knowledge exchange etc.

Cisco’s intranet was a key enabler of its workforce optimization . Because the web integrated data and tools from a variety of sources under a unified user interface.

By 2001, virtually every application in the company used a web browser as the only user interface.

COMMUNICATION AND DISTANCE LEARNING

Network enhanced ability to communicate with employees and added important dimension to training

Distance learning was made available to Cisco employees Activated with relative ease (at employee’s

desktop) Easily tracked to determine extent of usage

Tracking capability effective as a measure of as organization’s changing needs.

CUSTOMER SELF SERVICE: ELECTRONICCONNECTION WITH CUSTOMERS

Customer was the focal point of Cisco business. The centerpiece of this strategy was Cisco.com

590.425 active registered usersvisits approximately 3.8 million timesanswer customers’ questiondiagnose network problemsprovide solutionsexpert assistance worldwide

Over 80 % of technical supportdelivered electronically.( enabled Cisco save nearly $506M.)

CUSTOMER SELF SERVICE: ELECTRONICCONNECTION WITH CUSTOMERS

Improved customer Satisfaction1.Website has been modified into different

languages2. Customers who use Cisco’s systems show

higher levels of satisfaction and a lower cost of doing Business than those who do not use it.

NET COMMERCE-SHIPPING PRODUCT OVER THEINTERNET Cisco is a pioneer in using the internet for

full electronic commerce. Today, 92% of Cisco total revenue is

Internet commerce based revenue. ( 25 billion annually.)

Orders can be placed at any time from any where throughout the world.

Through online commerce Cisco gains 60% productivity and customers and resellers gain 20% productivity.

CISCO’S SUPPLY CHAIN MANAGEMENTINITIATIVES

By 1992, Cisco outsourced its manufacturing to contract manufacturers while performing assembly and test .

Cisco decided that its core competencies were in design and fulfillment processes rather than physical transformation of product. As a result , Cisco choose to form partnerships with suppliers that performed physical transformation as their core competency.

CISCO’S SUPPLY CHAIN MANAGEMENTINITIATIVES

CISCO’S SUPPLY CHAIN MANAGEMENTINITIATIVES

CISCO’S SUPPLY CHAIN MANAGEMENTINITIATIVES

By 1992, Cisco outsourced its manufacturing to contract manufacturers while performing assembly and test .

Cisco decided that its core competencies were in design and fulfillment processes rather than physical transformation of product. As a result , Cisco choose to form partnerships with suppliers that performed physical transformation as their core competency.

Network related applications improved profitability by $275 million.

Network enabled applications were key to value maximization in Cisco’s supply chain.

This model of managin SC was referred as Global Networked Business Model.

EXECUTIVE INFORMATION SYSTEMS ANDDECISION SUPPORT SYSTEMS

Employees use web browser as front end access to all executive and decision support information in the company

EIS was used by all sales managers and executives worldwide. ( 2000 users worldwide)

It provided summary and drill down Bookings, Backlog revenue, not booked, forecast and plan for all types of products.

Sales Tracking and reporting done over the Internet.

INTEGRATING ACQUISITIONS INTO IP-BASED ITARCHITECTURE. Cisco uses a documented and repeatable process for

every acquisition for integration. The R&D and product organizations of each acquired

company were integrated to Cisco’s product side. The Manufacturing, Sales and distribution parts of

acquired organizations were integrated to Cisco’s functional organization.

Cisco has a Group of IT professional who handled integration of acquired organizations.

Most acquisitions could be fully integrated To Cisco’s IT architecture within 60 to 100 days.

CISCO & KPMG

In 1999, Cisco announces that it will purchase 19.9% of KPMG’s global consulting arm for $1.05 billion.

KPMG planned to use the capital from the deal to build six technology centers( Of the $1.05 billion ,$450 million would be invested in the new unit. )

Cisco would provide the hardware and software for customers who want to transfer business fuctions to the web, And KPMG would install and maintain its systems

Cisco’ alliance with KPMG filled a gap to help its customers install and maintain its system.