SOLUTION: Northern Virginia Community College Cisco Case Study IT Project Management PPT
For the scientific use of N. Mohammed Nazar, 2020. 9-699-022 REV: MAY 6, 2002 ROBERT D. AUSTIN RICHARD L. NOLAN MARK J. COTTELEER Cisco Systems, Inc.: Implementing ERP Pete Solvik, Cisco Systems highest conversance official (CIO), considered the ultimate retaining cord item of his ERP (Enterpascend Riches Planning) instrumentation budget. Cisco had a truth of rewarding execution succeeding a space capital premiumes, but the sum allocated for rewarding the ERP team, balance $200,000, was unrivalled. To be comprehending, they had rescueed a lot in a occasion reach that no one had considerd possible. It had not been gentle either. The team members, Solvik interjacent, had enthralled a facilitate in joining the artfulness. Rewards should, and would, be magnanimous. The bulk of the premium pool, though, made Solvik think: they had effected courteous, but how courteous? What had bybybygone equitable? What had bybybygone evil-doing? Given another artfulness of this lump and facilitate, would they be telling to do it intermittently? History of Cisco Cisco Systems, Inc. was founded by two Stanford computer scientists in 1984 and became socially traded in 1990. The union’s pristine emanation is the “router,” the coalition of hardware and software that acts as a intercourse cop on the complicated TCP/IP1 networks that adduce-environing up the Internet (as courteous as corpoblame “Intranets”). Succeeding a space the ascend of Internet technologies, persuade-for for Cisco’s emanations boomed and the union promptly began to direct its traffics. By 1997, its pristine year on the Fortune 500, Cisco ranked disprevalent the top five companies in reappear on proceedss and reappear on effects. (See Exhibit 1 for Cisco’s financial execution.) Simply two other companies, Intel and Microsoft, keep ever matched this action. Perhaps smooth over imposing, on July 17, 1998, impartial 14 years succeeding life founded, Cisco’s traffic capitalization passed the $100 billion symptom (15-times 1997 sales). Some toil pundits predicted that Cisco would be the third dominant union—joining Microsoft and Intel—to pattern the digital curve. Don Valentine, confedeblame of Sequoia Capital and fault conductor of the tefficacious of Cisco,2 was the pristine to endue in Cisco; he took a accident on the immature union when other lowerpreliminary capitalists were over cautious. One way Valentine defended his $2.5 pet modeblame enduement was by reserving the equitable to adduce in negotiative skillful-treatment when he supposed it delayhold. 1 Transmission Guide Protocol and Internet Protocol, unitedly disclosed as TCP/IP, granted a hale rule for routing messages among LANs and engenderd the unexposed to converge all computers on an ever-larger Wide Area Netfruit (WAN). 2 Don Valentine was precedingly the delayout ruler conductor of the tefficacious of Cisco. Cisco has maintained its conductor of the tefficacious as an delayout master. Currently, John Morgridge suffice-fors as an delayout master and conductor of the table. ________________________________________________________________________________________________________________ Postdoctoral Elaboration Fellow Symptom J. Cotteleer cheerful this plight lower the supervision of Professors Robert D. Austin and Richard L. Nolan. HBS plights are exposed simply as the foundation for adtrue discourse. Cases are not purposed to suffice-for as endorsements, sources of pristine axioms, or illustrations of efficacious or inefficacious skillful-treatment. Copyequittelling © 1998 Moderator and Fellows of Harvard College. To command copies or petition dispensation to copy esthetics, persuade 1-800-545-7685, write Harvard Affair School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No dissect of this promulgation may be reproduced, stored in a reanimation adjustification, used in a spreadsheet, or transmitted in any shape or by any means—electronic, habitual, photocopying, recording, or otherwise—externally the dispensation of Harvard Affair School. This instrument is verified for use simply by Nazar Mohammed Nazar in Team 2 Cisco taught by PETER FARRELL, George Mason University from Jun 2020 to Jul 2020. For the scientific use of N. Mohammed Nazar, 2020. 699-022 Cisco Systems, Inc.: Implementing ERP In 1988, Valentine paid John Morgridge as CEO. Morgridge, an skilled ruler in the computer toil, straightway began to raise a negotiative skillful-treatment team. This team promptly clashed succeeding a space the founders and, succeeding Cisco’s modeblame social donation in 1990, twain founders sold all of their hoard and left the union. This evanition left Morgridge bountiful to endure his artfulnesss to install an very-plenteous disciplined skillful-treatment structure. Morgridge considerd that frequent Silicon Valley firms decentralized too quickly and did not appreciate the proven power of the administrative structure to increase succeeding a spaceout sacrificing guide. Accordingly, Morgridge maintained a convenientized administrative structure. Space Emanation Marketing and R&D were decentralized into three “Lines of Business” (Enterprise, Small/Medium Business, and Serfault Provider), the manufacturing, customer maintenance, finance, ethnical media, IT, and sales organizations remained convenientized. History of IT at Cisco Pete Solvik additional Cisco in January 1993 as the union’s CIO. At the occasion, Cisco was a $500 pet union ordinary a UNIX-based software bundle to maintenance its heart negotiation mannering. The administrative areas maintenanceed by the bundle interjacent financial, manufacturing, and command entry systems. Cisco was “far and away” the biggest customer of the software vendor that maintenanceed the application.3 Solvik’s test and the union’s weighty increaseth prospects real him that Cisco insufficiencyed a vary. We shortnessed to increase to $5 billion-plus. The contact didn't get the limit of redundancy, reliability, and maintainpower we insufficiencyed. We weren't telling to adduce-environing varys to the contact to unite our affair insufficiencys anymore. It had belook too plenteous spaghetti, too customized. The software vendor did propose [an upgraded statement], but when we looked at it we idea “by the occasion we’re effected our adjustifications conquer be over relitelling and keep higher redundancy but it conquer quiescent be a bundle for $300 pet companies and we’re a $1 billion dollar union.” Solvik’s modeblame disposition was to desert an ERP disentanglement. Instead, he purposed to let each administrative area adduce-environing its own misentry respecting the contact and timing of its stir. Keeping succeeding a space Cisco’s secure legend of ruleization, besides, all administrative areas would be insist-upond to use common architecture and axiomsbases. This way was consonant succeeding a space the structureal and budgetary structures that Solvik had based upon his manifestatlon. Solvik felt securely that budgetary misentrys on IT expenditures be made by administrative areas space the IT structure reported straightway to him. Solvik’s obstruction to ERP disentanglements was so born out of concerns environing the types of “mega-projects” that ERP instrumentations repeatedly became. A Defining Moment In the subjoined year, dirty proceeding was made. Randy Pond, a master in manufacturing4 and eventual co-leader of the artfulness, feeling the scrape confrontment the administrative areas in slow 1993: 3 Most customers of the software vendors ranged from $50 pet to $250 pet in proceeds. 4 Subsequent to the instrumentation Randy Pond was promoted to the fault moderator smooth in manufacturing at Cisco. 2 This instrument is verified for use simply by Nazar Mohammed Nazar in Team 2 Cisco taught by PETER FARRELL, George Mason University from Jun 2020 to Jul 2020. For the scientific use of N. Mohammed Nazar, 2020. Cisco Systems, Inc.: Implementing ERP 699-022 We knew we were in embarrassment if we did not do colossus. Anything we did would impartial run balance the devise adjustifications we had in fix. It crabbed into an attempt to continually band-aid our corporeal adjustifications. None of us were individually going to go out and buy a bundle. . . . The disruption to the affair for me to go to the tefficacious and say “Okay, manufacturing shortnesss to spend $5 or $6 pet dollars to buy a bundle and by the way it conquer captivate a year or over to get in . . .” was too plenteous to impartialify. None of us was going to toss out the legacies and do colossus big. The adjustifications revival difficulties of administrative areas perpetuated the recompense of Cisco’s devise environment. Incremental revision endured space the union sustained an 80% annual increaseth blame. Systems outages became gradation. Emanation shortcomings exacerbated the difficulties of saveing from outages. Finally, in January of 1994, Cisco’s devise environment failed so dramatically that the shortcomings of the corporeal adjustifications could no craveer be ignored. An unverified order for accessing the heart contact axiomsbase—a fruitenvironing that was itself motivated by the inpower of the adjustification to perform—malfunctioned, corrupting Cisco’s convenient axiomsbase. As a outcome, the union was abundantly suspend down for two days. Cisco’s labor to recbalance from this superior suspenddown brought home the circumstance that the union’s systems were on the room of completion insist. Solvik, Pond, and a sum of other Cisco superintendents came to the misentry that the autonomous way to adjustifications revival they had adopted was not going to be satisfactory. An valuable way was insufficiencyed. Solvik feeling what they did: We said, “we can’t endure perchance by space Command Entry, Finance, and Manufacturing go out and adduce-environing three sepablame misentrys.” It would captivate too crave to get those contacts in fix. We insufficiencyed to captivate faster action. At that top we got sponsorship from the SVP of Manufacturing, Carl Redfield. He was succeeding a space Digital antecedently Cisco, in PC manufacturing. He took the guide and said, “O.K., let’s get on succeeding a space this.… let’s set-on-foot from the manufacturing perspective, and see if we can get the Command Entry and Financial groups in the union interested in doing a uncompounded integrated revival of all the contacts, instead of preliminary a longer occasion doing sepablame artfulnesss.” And so in February, environing a month succeeding the [company shutdown], we went environing putting unitedly a team to do an endueigation to refix the application. Redarena lowerstood from preceding vast-scale instrumentation tests at Digital how “monolithic” IT artfulnesss could captivate on feeds of their own. He echoed Solvik’s concerns environing artfulness bulk and had secure representations environing how Cisco should way a vast instrumentation artfulness. I knew we shortnessed to do this quickly. We were not going to do a phased instrumentation, we would do it all at once. We were not going to suffer a lot of customization either. Tshort is a tendency in MRP adjustifications5 for class to shortness the adjustification to think their order of operation instead of retraining class to do things the way the adjustification purposed them. This captivates a lot longer. Also, we shortnessed to engender a list that was dotelling and adduce-environing it a regulate in the union as contrariant to a promote rank husk of attempt. 5 MRP represents a adtrue of adjustifications, repeatedly idea of as predecessors of ERP that standpoint on artfulnessning the esthetic insist-uponments for emanationion. Forecast or express persuade-for is fed to MRP either manually or from other types of adjustifications. MRP administrativeity is embedded in the donations of all guideing ERP vendors. 3 This instrument is verified for use simply by Nazar Mohammed Nazar in Team 2 Cisco taught by PETER FARRELL, George Mason University from Jun 2020 to Jul 2020. For the scientific use of N. Mohammed Nazar, 2020. 699-022 Cisco Systems, Inc.: Implementing ERP Selecting an ERP Product Cisco’s skillful-treatment team realized that instrumenting to unite affair insufficiencys would insist-upon heavy involvement from the affair class. This could not be an IT-simply leadership. It was critically momentous to get the very best class they could confront. Solvik elaborated: “Our orientation in pulling class out of their jobs [to fruit on the artfulness] was if it was gentle then we were picking the evil-doing people. We pulled class out that the affair positively did not shortness to produce up.” Consistent succeeding a space the insufficiency for a secure Cisco team, the union would so insufficiency secure confederates. Solvik and Redarena felt it was dissecticularly momentous to fruit succeeding a space an integration confedeblame that could assist in twain the election and instrumentation of whichever disentanglement the union chose. Great technical skills and affair conversance were a prerequisite. Solvik explained the valuable of KPMG as the integration confederate: KPMG came in and saw an convenience to in-truth raise a affair environing putting in these applications. They so saw this as husk of a defining convenience, to fruit succeeding a space us on this project. As contrariant to some other firms that shortnessed to adduce in a lot of “greenies,” KPMG was building a exercitation of class that were very skilled in the toil. For precedence, the program superintendent that they put on the job, Symptom Lee, had been master of IT for a union in Texas that had put in diversified dissects of an ERP adjustification. With KPMG on table, the team of environing 20 class crabbed to the software traffic succeeding a space a multipronged way for identifying the best software bundles. The team’s temporization was to raise as plenteous conversance as practicable by leveraging the tests of others. They asked vast corporations and the “Big Six” accounting firms what they knew. They so tapped elaboration sources such as the Gartner Group.6 By orienting the election manner to what class were expressly using and continuing to emphabulk misentry hurry, Cisco narrowed the arena to five bundles succeeding a spacein two days. After a week of evaluating the bundles at a high-level, the team firm on two consummate candidates, Oracle and another superior player in the ERP traffic. Pond recalled that bulk was an consequence in the selection. “We firm that we should not put Cisco’s advenient in the hands of a union that was significantly smaller than we were.” The team gone-by 10 days congruity a Petition For Proposals (RFP) to bestow to the vendors. Vendors were producen two weeks to engage. Space vendors cheerful their responses, the Cisco team continued its “due diligence” by visiting a sequence of regard clients proposeed by each vendor. Following Cisco’s separation of the RFP responses, each vendor was invited in for a three-day software demonstration and asked to illusion how their bundle could unite Cisco’s conversance mannering requirements. Cisco granted instance axioms, space vendors picturesque how key insist-uponments were met (or not met) by the software. Selection of Oracle was based on a multiplicity of circumstanceors. Redarena feeling three of the superior misentry tops: First, this artfulness was life driven tolerably securely by manufacturing and Oracle had a better manufacturing cappower than the other vendor. Second, they made a sum of 6 The Gartner Group is a guideing toil riches for conversance on ERP and other conversance adjustifications and manufacturing related elaboration. 4 This instrument is verified for use simply by Nazar Mohammed Nazar in Team 2 Cisco taught by PETER FARRELL, George Mason University from Jun 2020 to Jul 2020. For the scientific use of N. Mohammed Nazar, 2020. Cisco Systems, Inc.: Implementing ERP 699-022 promises respecting the crave order effect of administrativeity in the bundle.7 The other dissect of it was the flexibility proposeed by Oracle’s life suspend by.8 Cisco so had conclude to consider that Oracle was dissecticularly motivated to adduce-environing the artfulness a consummation. Pond granted his percussion of Oracle’s situation: “Oracle shortnessed this win badly. We ended up getting a super chaffer. Tshort are, besides, a lot of strings rooted. We do regards, suffer predicament visits and in public confabulation to frequent companies that are complicated in making this misentry.” The Cisco artfulness would be the pristine superior instrumentation of a new indemnify of the Oracle ERP emanation. Oracle was touting the new statement as having superior improvements in maintenance of manufacturing. A consummationful implementation at Cisco would propel the new indemnify on a very favortelling trajectory. From birth to decisive election the Cisco team had gone-by 75 days. The decisive valuable was teambased. Solvik feeling how the misentry was made and presented to the vendors: The team delayin made the valuable and conscious the vendors. Tshort was no superior manner we had to go through succeeding a space skillful-treatment to “approve” the election. We impartial said “Oracle you won, [other vendor] you past.” Then we went on to abbreviate negotiations succeeding a space Oracle and putting a tender unitedly for our tefficacious of masters. The standpoint straightway crabbed to consequences of how crave the artfulness would captivate, and how plenteous it would consume. The team firm “yes, we conquer do this and we ought to go ready succeeding a space the artfulness.” So now at the very end of April we were putting the healthy artfulness unitedly. Going to the Board Before going to the tefficacious for plaudit, the team insufficiencyed to exculpation two very momentous questions: How plenteous would it consume and how crave would it captivate? They knew their rulers were worried that a big artfulness sway deviate out of guide and rescue sub-rule outcomes. Despite the facilitates, the team took a pragmatic way to estimating artfulness insist-uponments. Solvik feeling the manner: Our pitys go August to October, November to January, February to April, and May to July.9 So equittelling short on May 1, initiation of the fourth pity, we are exploration “how crave should it captivate to do a artfulness to refix all of our heart adjustifications?” This is in-truth how it went. We said “you comprehend we can't instrument in the fourth pity. The auditors conquer keep a adequate cow.” If it captivates a year we conquer be instrumenting fourth pity, and that won't fruit. We idea it in-truth should captivate 15 months, July or August a year slowr. Tom Herbert, the program superintendent, said there's no way we are going to captivate 15 months to get this effected. That's trivial. So we started going in the oppopredicament control and said courteous can we do it in five months? That impartial didn't look equitable. Understand we did not keep a object yet. In the end we basically settled that we shortnessed to go feed at the initiation of Q3, so we would be adequately sttelling for Q4. (See Exhibit 2 for a segregation of milestone ERP instrumentation determinations.) That took concern of contrast a target determination. Next came the profession of estimating a artfulness budget. Once again, Cisco was aggressive: “After we set a determination, we estimated budgets. We put this healthy thing unitedly succeeding a spaceout in-truth life that far into this program. We impartial looked at how plenteous it touched” (Pete Solvik). Instead of developing a shapeal affair plight (i.e., a financial separation) to demonstrate 7 Redarena slowr famous that not all of these promises were met in the occasion reach agreed to during abbreviate negotiations. 8 Oracle and Cisco globe headquarters are twain located adjacent San Jose, CA, almost 20 miles from each other. 9 Cisco’s financial year end is July 31. 5 This instrument is verified for use simply by Nazar Mohammed Nazar in Team 2 Cisco taught by PETER FARRELL, George Mason University from Jun 2020 to Jul 2020. For the scientific use of N. Mohammed Nazar, 2020. 699-022 Cisco Systems, Inc.: Implementing ERP the collision that the artfulness would keep on the union, the team chose to standpoint on the consequences that had sparked the separation in the pristine fix. In Solvik’s representation, Cisco had dirty valuable but to stir. He explained his way to the situation: We said that we had this big outage in January. That we were the biggest customer of our prevalent software vendor and that the vendor was life bought by another union. It was unclear who was going to maintenance our corporeal adjustifications and we insufficiencyed to do colossus. The reliability, the scalability, and the modifipower of our prevalent contacts would not maintenance our anticipated advenient increaseth. We insufficiencyed either upgrades to the new statement of the prevalent contact or we insufficiencyed to refix it. If we supplyd it, we could either do it in dissects or do it as a healthy. We evaluated those three valuables, confabulationed environing the pros and cons of each alternative, and recommended that we refix our adjustifications, big-bang, succeeding a space one ERP disentanglement. We committed to d ...
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