erp and web-enabled it eric nguyen jerica candalla duane gonzales matthew wurst roman troyano david...
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CISCO SYSTEMS ARCHITECTUREERP and Web-enabled IT
Eric NguyenJerica Candalla
Duane GonzalesMatthew WurstRoman Troyano
David Allen
Background 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
CiscoTOP MANAGEMENT BUSINESS STRATEGY
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
Plan with 4 elements: Broad product line Systematize
acquisitions Set industry wide
software standards for networking
Pick the right partners
Building Cisco’s IT Infrastructure
PETER SOLVIK CHANGES
Came from Apple in 1993
Gave 2 key challenges IT department was too
traditional Too internally oriented
IT reporting went to Senior VP of customer advocacy
IT budget was returned to functions
Central IT steering committee was disbanded
A Defining Moment Cisco’s legacy
system failed in 1994 Shut down for 2 days
Discussion
How should Cisco proceed?Should they make adjustments and
improve their current system?Should they outsource to a different
company?Should they begin development of in-
house software?Why?
Question
With such a large company, changes to the legacy system could potentially cripple their business structure. Did Cisco decide to implement changes one at a time or all at once? And why?
Implementation wouldn’t be phased Would be done all at once No customization to make implementation a
priority
Answer
Selecting an ERP product
VENDORS
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
DiscussionWho are some of the vendors Cisco consideredand why?
Answer Oracle: stronger manufacturing capability,
made long term development promises regarding functionality, flexibility offered by closeness
SAP AG: one of the largest business software companies
PeopleSoft, Inc. : HRMS, FMS, SCM, CRM, & EPM J.D. Edwards & Co: OneWorld ERP system
Going to the Board
QUESTIONS POSED BOARD’S REACTION
How much would it cost and how long would it take?
Negative initial reactions
Board eventually approved the project.
Next step was to incorporate the internet
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
DiscussionWould the strategy employed by Cisco
at the time work successfully today? Would such a budget and stringent
timeline give trouble to a modern company?
Applications and Benefits
INTERNET & EXTRANET
Began development in early ‘90s
Shifted from Mosaic to Netscape browser
Cisco connection online
3 year investment $115 million
$100M for web enablement
$15M for ERP
Internet
CISCO’S SUPPLY CHAIN MANAGEMENT
5 initiatives to automate Single enterprise Used networked apps New product
introduction Automated process for
gathering product data Autotest
Inventory displayed in real time “Global Networked
Business Model” Extranet supply
chain Information
transparency Outsourced
manufacturing
Internet Customer self service
through website 80+% tech support
delivered electronically Saved $506M annually 70% employees have a
bonus multiplier that are attached to customer satisfaction surveys
Marketing through web
Net commerce through web 90% software
upgrades via internet Productivity gains of
60% for Cisco & 20% for customers
Any place access through the web
Intranet Applications EIS & DSS
Executive & decision support, sales tracking & reporting went through the intranet
Employee self service Cisco Employee
Connection (CEC) Resources for 40k+
employees Web browser interface
Collaboration & workflow management
Web-enabled legacy systems
Question
Communication & distance learning Cisco tailored version of My Yahoo! Used “push” technology Strengthened culture
Whose website format did Cisco have their intranet tailored to?
Answer
Integrating Acquisitions into IP-based IT Architecture
2/3 technology internally developed
1/3 from partnerships/ acquisitions
70% CEOs from acquired companies were retained at Cisco
Acquired companies for their R&D
Acquisitions integrated 60-100 days
KPMG ACQUISITION
Purchased ~20% KPMG’s global consulting arm 1.05 Billion
Beyond CiscoKPMG ACQUISITION
KPMG retained 80% equity
Used capital to build 6 tech. centers
4K consultants for Cisco’s clientele
KPMG was part of the decision process with Oracle so it was only natural for the acquisition.
Where is Cisco now?
ACQUISITIONS KEY ACQUISITIONS
Focused on 3 pillars: Build, buy, & partner
Growth strategizing on identifying and driving market transitions
Acquisitions are segmented into: Market acceleration Market expansion New market entry
1993 – Crescendo Ethernet market entry
1999 – Monterey Networks Optical transport market
entry 2003 – Linksys
Consumer networking 2005 – Scientific Atlanta
Set top boxes for Cable TV 2012 Litewire, Inc.
Optical interconnect tech.
Where is Cisco now?
CORE COMPETENCIES
Kept design and fulfillment throughout economic struggles until 2009
Set 30 core focuses to take advantage of new opportunities of other companies who were cutting back
2011 Cisco realized it wasn’t meant to be a consumer company
At the beginning of 2012, Cisco narrowed down their list of 30 to 5
Where is Cisco now?
INTRANET 2002-2006
Unified Intranet Consistent UI Unified navigation Integrated enterprise
news Streamlined intranet
development Period enabled:
Informed workforce Corporate
communications Efficiency
Collaboration tools Democratizing
publishing Communication vehicles
Blogs Personal Project/Team Executive
Discussion forums Wikis
Enabling communication & collaboration
INTRANET 2006-2008
Where is Cisco now?
INTRANET 2008-2011
Focused on personalization and customization
Integrated workforce experience
“Me” is the key focus
New Work Find projects &
initiatives they want to work on advertized in a marketplace
Activities within workplace community
Flexibility & adaptability
INTRANET 2011- PRESENT
Where is Cisco now?
EXTRANET
My Cisco Platform module My Cisco pull down My Cisco Workspace Multiple access levels
Accessible 24/7 for 83 countries
Training & Events 5 levels of IT
certification 8 different paths
3 distinct markets Enterprise Small business Home
Where is Cisco now?
EXTRANET
Support Product support Downloads Contact Tools Forums Security Advisories
Partners Channel Partner
Program Resale channel Managed services
channel Outsourcing channel Cloud partner network Global partner network
Question Where are the other competitors that
Cisco was considering presently?
J.D. Edwards & Co. was purchased by PeopleSoft, Inc in 2003
PeopleSoft, Inc. was purchased by Oracle in 2005
SAP is currently one of the largest business software competitors and in the top 3 of highest revenue independent software provider.
Answer
DiscussionIf Cisco had decided to go with
another company that was acquired by Oracle, would Oracle still
consider providing support for the original implementation methods?
Or would they have Cisco convert all together?
What would be the reasoning behind each?
Discussion
SAP VS. ORACLE: WHICH WOULD’VE BEEN THE BETTER CHOICE?
SAP Mostly in-house
solutions Enhancing core
product offerings Standardized Leader in actual
business benefits realized
Oracle Solutions mostly
presented through acquisitions
Moving toward Fusion middleware (OFM)
Flexible 20% cheaper Highest satisfaction
(2008 study)
DiscussionShould Cisco be moving towards SOA
if they aren’t already?