Cisco Case

Avik Biswas- 20PGDM009

Lokesh Dhamija-20PGDM016
Saumadeep Guharay- 20PGDM069
Shouvik Dutta- 20PGDM075
Kaushiki Sen gupta -20PGDM097
Tushnik Ghosh - 20PGDM122
Soumyadeep Chatterjee - 20PGDM135
Major Business Strategies

● Sells Internet Protocol (IP)-based networking and other products related to the
communications and IT industry.
● Employing over 70,700 employees, the company recorded revenues of $40,040 million
during the financial year ending in July 2010.
● On the service side of Cisco’s offerings, the portfolio is just as expansive including
technical support services and advanced services.
● Cisco's application networking solutions that enable secure, high performance, reliable
delivery of applications within data centers
History of Cisco

● Founded by two Stanford computer scientists in 1984, Cisco Systems, Inc has become
the worldwide leader in Information Technology (IT).
● Cisco produces and transports more the 35,000 components, as well as designing,
fabricating, delivering, and managing the lifecycle of approximately 225 hardware
product families.
● Relies on more than 600 suppliers worldwide.
● Cisco faces challenges with their UNIX-based software package.
Business Model & Business Goal

● Help companies seize the opportunities of tomorrow by proving amazing things can
happen when you connect the previously unconnected.
● Edna Conway stated “We strive to meet the challenge of managing a socially responsible
value chain through continued focus on our key social and environmental impacts. We
have moved forward substantially in FY09 and are committed to driving incremental
improvement over the long term.”
IS Strategy: ERP Implementation

● Strategic information system is information systems used strategically to enhance the

competitive advantage
● To achieve operational excellence, they deploy an ERP implementation as their IT
approach.
● Forecasting revenues, creating manufacturing plans, and scheduling to meet those
forecasts are all done with ERP systems.
SWOT Analysis : Strength

● Because of their location in San Jose, California, they have access to a large pool of
highly educated applicants for future hire.
● With an annual profit of over $5 billion and revenues of over $100 billion, the
corporation has ample financial reserves.
● They specialise in enterprise networking and have a 54 percent market share across all
categories.
● They've created an integrated infrastructure called Unified Computing Systems (UCS)
that combines networking, storage, and security into a single system.
Weakness

● A decline in the storage network business, as well as being late to the Wi-Fi field.
● In comparison to its competitors, Cisco does not have a strong presence in BPO
technologies.
● Due to stagnancy in the router market and changing technical conditions, the company
has a history of low turnover but diminishing revenues.
● Cisco has struggled with diversity because it employs the fewest women and minorities,
which may have hampered their ability to acquire outstanding talent.
● Even when the board has been stagnant or has had low stockholders equity, its
executive packages have been among the highest.
Opportunity

● Cisco has integrated Wi-Fi and high-speed wireless internet access, which are just two of
the opportunities that have arisen since the ERP.
● Cisco is actively working on cloud computing initiatives, with global data traffic expected
to reach 10.4 (Zettabytes) ZB by 2019.
● Cisco also has an opportunity in the software industry, as well as cloud security, where
the Cisco IronPort Hybrid Security service would bring in extra income and projects.
● Cisco continues to have stable cash flows, low inflation, and an economy where
consumers are eager to spend, allowing the corporation to expand its market footprint.
Threats

● Hewlett Packard, Alcatel-Lucent, Amazonweb services, Arista Networks, Juniper

Networks, Motorola Solutions, Polcycom, VM ware, and private VM ware are among
Cisco's competitors.
● Pricing and sales of new items have been unpredictable from quarter to quarter due to
changing economic and business situations.
● Legal difficulties and accountability regulations differ by country; for example, a federal
tax evasion accusation in Brazil may cost the corporation up to $2.5 billion in fines, but
more crucially, it might tarnish the company's brand.
● Lack of growth could result in falling stock prices, layoffs, and a reluctance to hire top
people due to inadequate stock options.
 Problem Analysis

● Inbound logistics, operations/manufacturing, outbound logistics, sales and marketing, and customer service
are the main tasks.
● Demand-driven, dispersed, global, and collaborative are all characteristics of Cisco's value chain.
● They develop, fabricate, deliver, and manage the lifecycle of over 225 hardware product families, as well as
producing and transporting over 35,000 components.
● Cisco relies on over 600 vendors throughout the world to produce, test, ship, and recycle its products.
● If input materials are limited or in short supply, Cisco is forced to acquire them from other sources, which
often comes at a higher cost.
contd….

● Cisco prioritises environmental sustainability in its operations and manufacturing.

● On Cisco's support side, the technology or design and planning department accounts for
a significant portion of the company's spending. In fiscal years 2011 and 2010, research
and development expenditures were $5.8 billion and $5.3 billion, respectively.
● The technology or design and planning department of Cisco accounts for a considerable
chunk of the company's support spending. Research and development expenditures in
fiscal years 2011 and 2010 were $5.8 billion and $5.3 billion, respectively.
● Cisco's Human Resources mission is to create a global people culture and organisational
competence in order to maintain a competitive edge during market shifts (Cisco).
Problem Identification Table
PDSA Model for ERP Implementation

Plan -

● ERP must be flexible and visionary in order to meet the needs of today's and tomorrow's
companies.
● The ERP system should be able to connect to mobile apps so that customers may
interact with the system with just a few clicks.
● To make their operations faster and more efficient, all users must be allowed to manage
their own User Interface (UI).
● To build the apps and upgrade system modules, a soft development kit should be
created.
Do -

● The choice of an ERP software was important because it had to fit the way Cisco did business, and KPMG
was hired to help develop the company around ERP.
● Their 20 experts sought to present Cisco with options for how to approach and strategize the various
software providers by delivering a complete analysis of each. The Gartner Group was also enlisted to conduct
research on the top six finalists.
● Within two days, the field had been limited to five software businesses, and within a week, it had been
reduced to two software companies: Oracle and another.
● The team told the Board when the task would begin, how many hours it would take, and how much money it
would cost to complete it.
Study -

● KPMG was retained as a result of their excellent planning work.

● To provide visibility, sponsorship, and motivation, an Executive Steering Committee was formed, consisting of
executives from Cisco, Oracle, and KPMG.
● "Rapid Iterative Prototyping (RIP)" was a technique that resulted in Conference Room Pilots (CRP). CRPs were
divided into four phases: CRP0, CRP1, CRP2, and CRP3.
Act -

● The technological environment was mapped by the implementation team in CRP0. Cisco had Oracle reduce
their training program from five days to two 16 hour days.
● The majority of the staff had been taught within two weeks, and the core team, along with KPMG and Oracle
experts, went offsite to determine the parameters of operating Oracle.
● A full staff was assigned to CRP1 to ensure that the work or projects assigned to a specific region were
accomplished.
● When it came to modelling the project, there were some issues that the programme couldn't handle.
Increased funding allowed for unplanned adjustments to the project.
● The project was in its most demanding phase in CRP 2 and 3, with considerable
adjustments and a new after-sales package.
● Cisco's 100 IT team members bore the brunt of the workload, forcing them to take time
away from other initiatives.
 Cost Estimation for ERP Implementation

● With only nine months to finish the project and a $15 million budget, this would be the company's single largest
capital project ever approved.
● They had to start devoting less time to other initiatives in order to devote themselves entirely to the ERP project
for a year, contributing both actual and intangible costs.
● When they switched on the new system, their on-time ship rate dropped from 95 percent to around 75 percent.
● As users adapted to a new system, their business suffered. Due to insufficient hardware, the new system was
unstable and went down once a day.
● The system couldn't handle the volume of transactions, making it impossible to process the load.
● The project's tangible and intangible costs were both affected by the disruptions. Orders, money, morale, and
research and development time for other goods would have all been lost.
Benefit Estimation for ERP

● The ERP will streamline operations and reduce communication inefficiencies among
various corporate activities.
● It is possible to avoid system outages or database damage.
● Instead of relying entirely on the IT staff, employees who worked on the project would
be deemed subject matter experts and could help troubleshoot when needed.
● Most notably, the company produced net sales of $2.2 billion less than a year following
implementation. Three years later, this figure had risen by 286 percent to $8.5 billion in
net sales.
 Conclusion

● Cisco Systems made a wise option when they decided to build their Enterprise Resource Planning (ERP)
system.
● Cisco would use the ERP system to estimate sales, set manufacturing plans, and schedules in order to meet
those forecasts.
● The information would become more immediate and relevant, resulting in improvements in resource
management, organisational planning, operations, and decision-making.
● I would propose testing and validating the system with a larger database and genuinely operating the system
as it would be in a live setting for a better implementation.
● Despite the fact that the system's implementation cost was one of the highest in Cisco's history, the
advantages surpassed the costs. Cisco may not have been able to grow at such a rapid pace without the
deployment.