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CISCO SYSTEMS ARCHITECTURE

ERP & WEB ENABLED IT

Presented By Group 2

Ayush Garg

Mayank Sharma

Savya 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

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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.

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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

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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

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INTERNET AND INTRANET APPLICATIONS

AND 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 million

Web-enablement cost : $100 million

KEY COMPONENTS OF INTRANET & INTERNET

Intranet Intranet Intranet Intranet InternetInternetInternetInternet

� EIS and DSS

� Employee Self Service

�Communication and Distance

Learning

� Collaboration and workflow

Management

�Web-enabled legacy Systems

�Extranet Supply Chain (information

�Transparency

�Customer self-service through

website

�Net commerce through the web

�Marketing through the web

�Any place access through the web

INTERNET AND INTRANET

APPLICATIONS AND BENEFITS

� Cisco Cisco Cisco Cisco Connection Online (CCO)Connection Online (CCO)Connection Online (CCO)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 Intranet Intranet Intranet of Ciscoof Ciscoof Ciscoof 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: INTERNAL

APPLICATIONS

� 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.

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COMMUNICATION AND DISTANCE LEARNING

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

� Distance Distance Distance Distance learning learning learning 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: ELECTRONIC

CONNECTION WITH CUSTOMERS

� Customer was the focal point of Cisco business.

� The centerpiece of this strategy was Cisco.com590.425 active registered users

visits approximately 3.8 million times

answer customers’ question

diagnose network problems

provide solutions

expert assistance worldwide

� Over 80 % of technical supportdelivered electronically.

( enabled Cisco save nearly $506M.)

CUSTOMER SELF SERVICE: ELECTRONIC

CONNECTION WITH CUSTOMERS

� Improved customer Satisfaction1.Website has been modified into different languages

2. 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

THE

INTERNET� 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.

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CISCO’S SUPPLY CHAIN MANAGEMENT

INITIATIVES

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 MANAGEMENT

INITIATIVES

CISCO’S SUPPLY CHAIN MANAGEMENT

INITIATIVES

CISCO’S SUPPLY CHAIN MANAGEMENT

INITIATIVES

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.

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EXECUTIVE INFORMATION SYSTEMS AND

DECISION 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 IT

ARCHITECTURE.� 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.