Cisco Systems implementing ERP Sample Essay

Cisco Systems Inc. was founded in 1984 by two of Stanford University’s computing machine scientists. In 1990. a affair of merely six old ages from the start-up day of the month. Cisco became publicly traded. With the monolithic growing of Internet Technologies. demand for Cisco merchandises increased dramatically. ensuing in Cisco ruling the market place. The lending factor to Cisco’s ruling presence in the market is due to the company’s primary merchandise. the “router” . This is a combination of hardware and package that acts as a traffic bull on the complex Transmission Control Protocol and Internet Protocol ( TCP/IP ) networks that make up the cyberspace every bit good as corporate intranets. TCP and IP webs provided a robust criterion for routing messages between LANs and created the possible to link all computing machines on an ever-larger Wide Area Network ( WAN ) .

Financially. the company experienced consistent growing from July 30. 1995 up until July 25 1998. Using figures provided in Exhibit 1 of the instance survey. it can be calculated that Net Gross saless increased a humongous 279 % from 1995-1998. The twelvemonth 1997 proved to be a milepost for the company. It was the first twelvemonth for the company to have on the Fortune 500 list. Cisco was ranked among the top five companies in return on grosss and return on assets.

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Some industry initiates predicted Cisco would be 3rd ruling company aboard Microsoft and Intel. to determine the digital revolution. The concluding behind such a bold anticipation is because merely 14 old ages after being founded in 1998. Cisco’s market capitalisation passed the $ 100 billion grade. Such potency did non travel unnoticed. Don Valentine. spouse of Sequoia Capital and frailty president of the board of Cisco. was the first to acknowledge the success and potency of Cisco. He decided to take a opportunity on the immature company. by ab initio puting $ 2. 5 million. However. he ensured that with this investing he reserved the right to convey in professional direction when he deemed it appropriate.

1n 1993. Pete Solvik joined the company as the Chief Information Officer. With his industry experience and taking into history the company’s monolithic growing chances. Solvik believed Cisco needed to alter its nucleus transaction-processing bundle. The undermentioned study will concentrate on the importance of an Enterprise Resource Planning ( ERP ) system to the overall architecture of an organisation such as Cisco. some distinguishing factors between the success and failure of an ERP undertaking. countries of being merely plain ‘lucky’ and merely ‘smart’ . and whether or non a repetition of the undertaking is required. In order to efficaciously show this information. this study is divided into four sections – Introduction. Analysis. Evaluation. and Recommendations.

Analysis
At the clip of Solvik fall ining the company. Cisco was running a UNIX-based package bundle to back up its core dealing processing. This bundle supported three functional countries of the company. fiscal. fabrication and order entry systems. Most clients who adopted Ti UNIX based bundle had gross watercourses of between $ 50million to $ 250 million. Cisco was a $ 500 million company ; hence Cisco was “far and away” the biggest client of the package seller that supported the application. The application did non supply the redundancy. dependability. nor the maintainability in which Cisco needed in order to make their growing mark of $ 5billion-plus. Harmonizing to Solvik. the seller did offer an ascent. but still did non run into Cisco’s demands.

Initially Solvik did non desire to implement an ERP system. as he had concerns about the types of “mega-projects” such executions frequently became. He chose to let each functional country to do its ain determinations sing the application and timing of its move. This attack was consistent with the organisational and budgetary constructions that Solvik had installed upon his reaching. However. the undermentioned twelvemonth brought small advancement to Cisco. January 1994. proved to be the existent eye-opener. Cisco’s bequest environment failed so dramatically. defects of bing systems could no longer be ignored. A method deemed non-applicable was used to entree the nucleus application database perverting the cardinal database. As a consequence. Cisco was shut down for two yearss. This environment is excessively traditional for the increasing growing of Cisco. It focused on internal orientation excessively great. It could non manage the 80 % one-year growing rate confronting Cisco. Due to the incapableness of non being effectual plenty to adhere to the increasing demand. staff at Cisco spent a batch of their clip mending the system.

The realisation that a new application was required came in February 1994. when a squad was put together to look into a replacing for the under executing application. The determination was taken to implement an Enterprise Resource Planning system. “In most companies an ERP provides the back bone needed to pull off daily execution”1. The Eleventh Edition of the APICS Dictionary defines ERP as a ‘‘framework for forming. specifying. and standardising the concern processes necessary to efficaciously be after and command an organisation so the organisation can utilize its internal cognition to seek external advantage’’2. The ERP system integrates functional countries. transforming de-centralized companies into centralised. In Cisco’s instance the functional countries that is stated to be integrated is Financial. fabrication. and Order Entry. Successful integrating is accomplished by a database shared by all functional countries within Cisco. This new system would be rolled out throughout all functional countries. It was decided the ERP system would be installed in a big-bang attack in topographic point of a phased attack.

The execution of the system concentrated on three countries ; the choice of the ERP merchandise. nearing the board. constructing the squad ;

The choice of the ERP merchandise: The choice of the ERP merchandise was crucially of import. Cisco found people-selection critically of import. merely picking the really best people they could happen. Second. Cisco found in add-on to a strong staff squad. they needed strong spouses. Solvik and Redfield felt working with an integrating spouse that could help in the choice and execution procedure. would be highly good to Cisco. The determination was taking to name KPMG as the integrating spouse. KPMG brought a figure of benefits to Cisco. For case. Mark Lee being appointed as undertaking director is thanks to KPMG. Lee antecedently worked in an ERP environment. so he had an thought of what to anticipate when implementing an ERP. With the partnership with KPMG steadfastly in topographic point. a group of employees approached the package market utilizing a multi-pronged attack to place the best package packing. Using such research beginnings such as the Gartner Group. Cisco narrowed their bundle picks down to a mere five. Request for proposals ( RFP ) were so sent to the sellers. at the same clip Cisco continued their Due-diligence by sing mention clients offered by each seller. Ultimately Oracle was chosen. based on three determinations. Prophet offered better manufacturaing capableness. made a figure of promises sing the long term functionality in the bundle. and flexibleness offered by Oracle’s as it was close by ( Both Cisco and Oracle HQ’s are 20 stat mis from each other.

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