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Cisco Systems Architecture

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Cisco systems Architecture: ERP and Web-Enabled IT

Case Introduction and Background and analysis of the Business
Cisco Systems, a Global leading company that manufactures and markets Internet Protocol (IP) equipment, uses routers to send digital and voice data over the Internet. Founded in 1984 by three former Stanford University Students, Cisco first found early success by targeting Government agencies, Universities, and the Aerospace industry. In 1998, Cisco began targeting big businesses and other agencies. Cisco did their Initial Public Offering (IPO) in 1990. However, disagreement between founding partners led to two of the founding members parting ways with the company. In 1994, Cisco suffered another major setback: “Cisco’s legacy environment failed so dramatically that shortcomings of the existing systems could no long be ignored” (Nolan, 2005, p.4). However, after costly repairs and creating a brand new IT platform architecture, Cisco was able to recover and continued to move forward. Cisco immediately began expanding by acquiring smaller entities which expanded the company’s market share. In 1998, Cisco successfully reach the coveted $100 billion landmark. Over the next two years, Cisco continued to expand and “acquired more than 20 companies, including wireless network equipment maker Aironet. With a market capitalization exceeding $500 billion, Cisco enjoyed a turn as the world’s most valuable company in 2000” (Hoover, 2012, p.1.) Cisco’s product’s mix includes; security systems, IP telephony equipment, Internet conferencing systems, set-top boxes, optical networking components and network services (Hoover, 2012, p.2). Presently, Cisco operates in a broad target market. The company targets enterprise and service providers, small businesses, and homes (Cisco website, 2012). With annual reported revenue of over $43 billion in 2011 and over seventy thousand employees’ worldwide, Cisco is profitable . With a current market cap of over $90 billion, Cisco is one of the most valuable companies in the world. Cisco operates in a very lucrative and competitive industry. Cisco’s top competitors include Alcatel-Lucent, Hewlett-Packard and Juniper Network. Hewlett-Packard is the industry leader with Annual Sales in 2011 of over $130 billion. Cisco and Alcatel-Lucent followed with over $21 billion reported sales in 2011. The following is Cisco’s mission statement: “Shape the future of the internet by creating unprecedented value and opportunity for our customers, employees, investors and ecosystem partners” (Cisco website, 2012). The following is Cisco’s vision statement: “Changing the way we work, live, play and learn” (Cisco website, 2012). In 2012, Cisco continues to grow into a global force by acquiring new entities and expanding product line and services. Cisco is steadfast to Its mission statement and vision statement being a global leader in corporate social responsibility. Cisco earned several awards for their work in the global community which included the following: Volunteer Organization of the year in 2010 and ranking number 37 by Corporate Responsibility Magazine best 100 Corporate Citizens in 2011. The Volunteer Organization of the Year entailed Cisco having the most volunteer hours accumulated by a city team.
Cisco’s CEO, John Chamber, had a vision he coined as “The New World Network.” His vision was to attain voice capability to place free calls over the internet. Cisco’s main technology area was routers, which operates very similarly to the way telephone networks operate. “Cisco was at the forefront of the challenging world of three independent proprietary networks: the phone networks for voice, the local-area and wide-area networks for data and the broadcast networks for video.”(Nolan, 2005, p. 1) Digitization was the catalyst for combining the three networks and using one network. The internet made this dream a reality. Cisco was in a competitive arena, and IP (Internet Protocol) networks was the accelerating trend. Around this time in 2001, Lucent was leading the field in the telecommunications market. However, Cisco’s highly talented team was better postured to provide higher performance and security. Up to this point in time, no one had the technology to create a product that “with the speed and effieiency of a router and the precision of a telephone switch” (Nolan, 2005, p. 2).
Don Valentine, one of Cisco’s initial venture capitalist with a high tolerance for risk, needed more talented personnel with a similar entrepreneurial spirit as himself. After several management turnovers, John Chambers took over the position of CEO. Chambers initiated a strategy to excel Cisco to its “New World Network” vision. Cisco became the lead provider of internet based voice, data, and video computing systems. The following were included in Chambers strategy: 1. Assemble a broad product line which would position Cisco as a single point for business networks. 2. Systematize acquisitions to create efficiencies in the business process. 3. Set industry standards for software networking 4. Find the best fitting strategic partners
Cisco proceeded to implement the plan and grow the IT department and infrastructure. Peter Solvic joined Cisco as the Chief Information Officer (CIO) and began to address the challenges and shortcomings of the current systems. These included as lack of robust environment and flexibility when a dramatic event occurred which illuminated the dire need to upgrade Cicsco’s legacy environment. Cisco’s system malfunctioned and shutdown due to a workaround which was already being used to address the inadequacy’s of their systems performance. This malfunction virtually paralyzed the company for two days.
The company worked desperation to complete an IT project in a expedited manor. It was long and cumbersome, and Cisco asked Carl Redfield to take the lead in finding an appropriate Enterprise Resource Planning (ERP) product that could help build the business around. KPMG was chosen with a team of 20 to implement a multipronged strategy to find the right software. Oracle was eventually selected with a $15M price tag for full implementation of an ERP solution.
After 75 days from the initial push by Redfield, Cisco had chosen their ERP solution. Convincing Cisco’s Board of Directors was the next difficult step. The team prepared a timeline and budget and settled on a go live date of January 30 1995. The board endorsed the project, and and it was added to the company’s goals for 1994. Inevitably, the Oracle implementation was on time and within budget, it was a success.
On the coattails of the ERP success, Cisco moved forward with upgrading a $100 million
IT applications and platforms series of schemes replacement worldwide. Cisco standardized Its entire companies, and IT platform eliminated all its mainframes, mini computers, and legacy technology. Cisco upgraded and standardized everything from voicemail, meeting schedule software, and office productivity suites. UNIX was implemented at the sever level, Windows NT controlled everything at the LAN level and TCP/IP maintained the worldwide network.
Over the two years after Oracle was implemented, Cisco introduced the following systems: * Web Enabled * Employee self-service Customer self-service * Communication and distance learning Net commerce * Collaboration and workflow management Marketing through the web * Web-enabled legacy systems * Executive Information Systems (EIS) * Decision Support Systems (DSS), and * Extranet supply chain

Cisco created a more efficient and effective business by its web-enabling systems and operations. In addition, by linking vendors and customers created more collaboration and efficiency with outside resources. The Cisco Systems’ corporate Intranet provided employees centralized access to much needed information, tools and resources. Streamline processes and facilitated knowledge exchanged maximized employee productivity. was implemented and provided online support for customers. The website was translated into seventeen different languages to better serve its customer. A “critical account” list was used by employees to track customer issues. A report generated from this list was sent to CEO Chambers on a nightly basis, and he would follow through with updates to assure the customer(s) was satisfied. If satisfaction was not immediately attained, Cisco team would track down a viable solution(s) until the problem was solved.
The Six Sigma method of evaluation will be used to evaluate the Cisco Systems Architecture. This method will define the problem, analyze the problem, measure the problem, and improve the problem.
Define the Plan:
John Chamber was hired in 1991 and started his duties as CEO in 1995. As CEO, he created a four-point plan to help the company lead the architecture and become the provider of technologies in the Internet community. As CEO, Chambers created the four-step plant that consisted of CISCO becoming the one-stop shopping for business networks, being successful with acquisitions, setting standards for networking, and picking the right partners.

Analyze the Plan:
The company teamed up with several vendors to become a one-stop shop. They teamed up with such companies as KPMG and Oracle. Cisco decided to team up with Oracle because they felt that they were a bigger and successful business that can help them. The company ended up having 70 successful acquisitions. They analyzed the structure of the corporation, end products, and services before partnering with a company. CISCO set standards for networking and improved their internal organization. The company also changed to the Netscape browser their Internet, and intranet systems. In addition, they teamed up with Yahoo to make “My Yahoo!.” This decision made information from the Internet available on the users’ desktops. The new system helps integrate and train their employees.
Measure the Plan:
Chamber ‘s four-point plan worked to help the company’s profitability and allowed it to be listed on the top five spots in the Fortune’s 500 magazine. Since Chambers became the CEO on July 30,1995, the company’s net sales grew 956%, from $1,978,920,000 in 1995 to $18,928,000,000 in July 2000. Each year since 1995, the company’s net sales grew over 100-200 percent from the previous year. The company bought out more than 70 companies to become the one-stop shop for business networks. The company took seventy-five days since their proposals to work with Oracle. However, their partnerships took on an average of 60-100 days. CICSO also set high standards for themselves. The company took two years to replace all the hardware and software. In addition, the company worked for three years and spent $115 million to connect everyone in the company through the intranet and the Internet. The project developed sites where employees can get connected and obtain information. In addition, CISCO helped their customers obtain needed information.

Improve the Plan:
From the start, the company was driven to succeed. The company had their main goals, while focusing on their customers. CISCO’s plan succeeded in helping the company financially beat their competition. However, one suggestion from CEO Chambers would be that the intranet should have been developed sooner. The company would instead focus on their employees, and, in return, they would help the business grow. Perhaps CISCO should have created the intranet sooner with internal communication and learning tools. This move would have helped the employees be aware of what was going on in the company. Also, the distance learning programs would help them become aware how the company is performing and become efficient to the company.
Control the Outcome:
The company had a really good performance in five years since Chamber became the CEO. However, in order to keep up the pace with its competitors, CISCO has to keep improving their four-point plan. This change would be based on what would work today to help the company evolve.
The implementation of Internet solutions across all functional areas had a direct result on Cisco’s competitive advantage and increased shareholder value. Direct results of Cisco’s implementing ERP entailed incredible growth which allowed the company to develop a web-based intranet. This benefited the company in several ways: Cisco Employee Connection (CEC) allowed employees to access the information, tools, and resources required to streamline processes, facilitate knowledge exchange, and maximize productivity. The intranet also enhanced communication and distance learning by enabling employees to access training materials from their own desktops. In addition, this same network provided a conduit through which employees could view Cisco’s Quarterly Meetings from their desktops. The EIS system provided sales managers and executives with detailed information regarding all products, customers, channels, geographies, and markets. Moreover, in addition to providing salespersons with the opportunity to track and report sales, the intranet offered details on different product sales.
The implementation of Internet vastly altered the way in which Cisco conducted its business. also provided technical support to almost 68 different countries in 17 languages. In addition, net commerce had a tremendous impact on the way that Cisco operated. Customers could now place their orders from anywhere in the world. While Internet shipments totaled 0% of Cisco’s revenues in July 1996, this number had increased to 92% by January, 2001. Software upgrades were delivered faster via the Internet and at a significantly lower cost to the customers. The Internet also enabled Cisco to automate its supply chain. Suppliers were given access to real-time demand and supply information. This access significantly reduced delays and enabled Cisco and its suppliers to respond to changing consumer demand in real-time.
The results from moving to the new architecture were almost immediate and increases in both efficiency and effectiveness were evident from the beginning. Net sales increased from just under $2 billion in July of 1995 to almost $19 billion in July of 2000. During that same time period, the company’s net income increased from $421 million to over $2.6 billion. Cisco’s automation of its supply chain also improved its efficiency greatly. In 1999 alone, the total cost of New Product Introduction (NPI) was reduced by $49 million. As of March 27, 2000, Cisco was the most valuable business in the world and the company’s ability to achieve and maintain its phenomenal growth. This achievement was clearly a result of CISCO making smart decisions consistent with its business strategy.

Work Cited
Cisco Inc., 2012. Retrieved on 05 March, 2012
Hoover (2012). Cisco Inc., Retrieved on 03 March, 2012 from 360/overview.html? companyId=13494000000000.
Nolan, Richard. (2005). Cisco system architecture:erp and web-enabled it. Cambridge, MA:
Harvard business school.

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