Most IT funded IT as a % of revenues. Typically, the IT reported as a cost center directly to the CFO. Cisco IT fund before 1993, based on the company-wide budget of 0.75% of sales (5M/yr)-allow IT to service immediate needs, patch existing systems, inadequate for an acquisitive, 0.5 billion company predicted to grow by more than 50% per year Manager would be empowered to make decision on what projects would get funded, IT would decide how to implement them. By redistributing the responsibility of IT costs, Cisco aligned IT spending with its corporate goal-doing everything possible to support the customer. CFM enabled Cisco’s business units to make technology spending decisions where such investment would support customers and directly increase sales.
The application did not provide the degree of reliability, scalability and modifiability to align with Cisco’s anticipated fast growth company was forced to close for two days due to a legacy system broke down in Jan, 2004 to mirror people’s method of operation to end up as a mega-project which most ERPs became
After James finishes his slides and before Sekhar starts his slides these set of Qs that should be asked. Role play – make class the players – divide them into different business groups Sales, operations, Finance, marketing, IT and C-level Execs Ask each BG Why do they need an s/w package to do what they do? What are their expectations from the package? What benefit do they see in it? What are the integration points between various business functions? Jan 1993 - $500M company – UNIX based package – by a small vendor – target growth $5B – why is the current vendor not suitable anymore? Why cant individual functional areas implement their own packages? "What type of company needs an ERP system?" – Does a $30M or $500M or $5B company need a ERP? Turning point – what happened in Jan 1994? Key factors that compelled Cisco to implement ERP?
Could not be IT only initiative – must have the very best people of the business on the project Need a strong experienced implementation partner – so brought KPMG Ask Class – why did Oracle win? Oracle Won because – It has better manufacturing functionality Made number of promises about long-term development of functionality Closer to Cisco’s location Oracle wanted to win badly Transission to “actual vendor evaluation from article”
Some of the factors that will impact the ERP implementation cost. Ask Class – what could be other parameters?
Budget estimates were done early on No financial analysis was done on cost estimates, it was based on “how to handle this issue” Issues: Current vendor smaller than us Vendor brought over by someone else Current application is not reliable, not scalable, not modifiable and does not support Cisco’s growth Either upgrade or replace Do not do it parts, Big Bang Looking the pros and cons of each alternative – they said ERP
Is this the right strategy? Should they have used the industry bench marks?
1.Why do they need a “Big 6” as implementation partner? - IT 2. Why were the incentives so high? Is it justified? -C-level Execs
Having decided to implement ERP and made the initial configuration decisions, what are the likely big obstacles to successful implementation? How would you propose overcoming them? Discuss to what extent these choices affected success/failure of ERP implementation. What factors made the difference between success and failure ?
Once the software is "ready", what are the risks involved in "going live" with such a large IT implementation? How well did Cisco manage these risks?
Why were the vendors, Oracle, KPMG, hardware vendor, so determined to make Cisco ERP system a success? What were some of the lessons learned from Cisco’s ERP implementation? Should the ERP implementation be considered a success because of luck or because of other reasons? Or should the ERP implementation be considered a failure (in terms of, say, timeliness, software scope, etc.)?
What could have made the implementation and roll out of their ERP even more successful? Testing at CRP0 vs. waiting until late CRP2 Incremental roll out vs. big bang Taking a longer period of time to analyze the requirements, needs, etc. of their ERP system Researching others who have implemented an ERP system into their business What "best practice" lessons can you draw from the Cisco experience - practices that can be employed and generalized to other large IT implementation projects?
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