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Cisco Systems, Inc.
Implementing ERP

Issue at Hand

If you’re not careful, the dream of information integration can turn into a nightmare. – Thomas H. Davenport

Imagine the core operating system of a $1 billion dollar company malfunctions, corrupting the central database and as a result, causes a company-wide shut down for two days. This nightmare scenario unfortunately became a reality for Cisco Systems, Inc. in January of 1994. The incredible meltdown was due in-part to the 80% annual growth rate the company was sustaining. Moreover, the major failure was something executives, although perhaps not admittedly, had seen coming for some time. Cisco was without question, the largest customer of their software vendor’s operating system, which was ideally designed for $50 million to $250 million dollar companies. Outages and application of virtual “band-aids” to the current legacy information systems became commonplace in the year leading up to the total collapse. Although previously against the implementation of an Enterprise Resource Planning (ERP) solution, Chief Information Officer (CIO), Pete Solvik knew a change was necessary.

Cisco’s ERP implementation has widely been held as a success, especially considering they were one of the early adopters of these particular software applications. Webster’s defines success as: a.) degree or measure of succeeding b.) favorable or desired outcome; also: the attainment of wealth, favor, or eminence. The question becomes - what defines success, in terms of ERP implementation? Was Cisco smart in their approach, or had they simply been lucky? This assessment will offer differing viewpoints to these questions, as well as explore some known failures. Ultimately, recommendations will be made as to what Cisco needed to do in order to ensure success, and what they should do differently, if the process were to be repeated.

Analysis of Case Data

Key Observations
While studying the case of Cisco’s ERP implementation there were a few key observations that had a profound impact on the overall outcome of their project. These key observations include several luck factors, the incredible timing of the Cisco project with Oracle new release, and the tardiness of Cisco’s decision to act on their need for a new ERP system. A change in any of these circumstances could have easily resulted in a much different fate for the staff involved with the ERP implementation project. At the conclusion of the case, one of the questions that Solvik thought to himself was, “Where had they been just plain lucky?” “How did we get so lucky?” may have been a better question to ask. Besides the simple fact that their time and budget constraints seemed to appear to them in a crystal ball, Cisco was exceptionally lucky in their selection of partners. All of the partners, the consulting firm KPMG, hardware vendor, and the software partner Oracle, went above and beyond the call and played a huge role in the success of the Cisco project.

KPMG was the consulting firm contracted to supply the additional manpower and expertise that Cisco would need to undertake such a large project. Certainly KPMG would have been eager to work with a name as prestigious as Cisco, who was already widely known in the technology industry. However KPMG’s service level went well beyond what as required to advertise Cisco as one if their client’s on their webpage. It would have been all too easy for KPMG to send some of their entry level employees on the contract; which would have led to larger profits for them. Lucky for Cisco though, KPMG had a much longer relationship in mind, and they put some of their top people on the project. Cisco makes specific note of the quality of people that they worked with from KPMG and without them know knows what could have happened.

The hardware vendor, who goes unnamed in the case, also did a stellar job. The big luck factor with the hardware vendor was the...
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