Cisco Systems, Inc.

MBAA 609MBAA 609R. NakatsuR. Nakatsu

Enterprise Resource Planning

ERP is a cross-functional enterprise system driven by an integrated suite of software modules that supports the basic internal processes of a company.

Applications: Human Resources, Financials, Supply Chain Management, Manufacturing, CRM

Benefits of ERP Better quality in terms of improving a

company’s internal business processes Better integration of applications Better decision support in terms of providing

vital cross-functional information on business performance

Reduction in support and maintenance costsQuestion for discussion: What are some of the

problems and limitations of ERP?

Background on Cisco

What kind of company is Cisco? What is it most famous for?

What is the context of the case? (Describe the (1) internal and (2) external (i.e., environmental) factors under which Cisco is operating).

What was the initial approach at Cisco for developing IT?

Why ERP?

How does the Internet (TCP/IP) work?

Packet-switched network: information is broken into packets by TCP/IP.

Dynamic routing: even if one part of the network is knocked out, packets can be rerouted around the problem. Demo

Highly decentralized: millions of servers reside all over the world; nobody really “owns” the Internet

Questions on CaseQuestion 1: At the start of the case, Cisco’s information systems

are failing, yet no one steps forward to lead the effort to replace them. Why is this? Why were no managers eager to take on this project?

Question 2: Cisco was highly successful with its enterprise resource planning (ERP) effort. What accounts for this success? What were the most important things that Cisco did correctly?

Question 3: What is rapid iterative prototyping? Briefly describe three things that enabled a quick implementation during rapid iterative prototyping (see pp. 8 – 10 of the case).

Question 4: Did Cisco do anything wrong on this project? If so, what?

Implementing Quickly

What is rapid iterative prototyping?

CRP0: how did they work quickly in this phase?

CRP1: each track works in parallel; how did they manage scope creep?

CRP2 AND CRP3: most difficult part of the implementation; utilization of a data warehouse; full commitment by the IT Dept.

Change the business process or change the software? Why was Cisco reluctant to change the

ERP software—that is to say, why is it sometimes more desirable to change your business process to “fit” the software?

Is this always the case?

Main Takeaways of Cisco CaseUnderstand the following: What ERP is and what its benefits and problems are The “internal” and “external” factors of Cisco that led

it to ERP. Why ERP? Why lower and mid-level managers were reluctant to

volunteer to take charge What the best practices are for developing a big

system like ERP What the purpose of rapid iterative prototyping is What Cisco might have done differently Why it is sometimes better to change the business

process rather than the software.