Cisco Systems Architecture

CISCO SYSTEMS ARCHITECTUREERP and Web-enabled IT

Eric NguyenJerica Candalla

Duane GonzalesMatthew WurstRoman Troyano

David Allen

Background Founded by 2

Stanford computer scientists in 1984

1997 – First year in Fortune 500

Brought public in 1990

Passed $100 billion in 14 years

Core focus is routers

CiscoTOP MANAGEMENT BUSINESS STRATEGY Don Valentine, initial

VC for Cisco Reserved right to

bring in professional management

After 1990 IPO both founders sold their stock and left Cisco

John Chambers became CEO in1995 after coming from Wang Laboratories in 1991

Plan with 4 elements: Broad product line Systematize

acquisitions Set industry wide

software standards for networking

Pick the right partners

Building Cisco’s IT Infrastructure

PETER SOLVIK CHANGES Came from Apple in

1993 Gave 2 key

challenges IT department was too

traditional Too internally oriented

IT reporting went to Senior VP of customer advocacy

IT budget was returned to functions

Central IT steering committee was disbanded

A Defining Moment Cisco’s legacy

system failed in 1994 Shut down for 2 days

DiscussionHow should Cisco proceed?

Should they make adjustments and improve their current system?

Should they outsource to a different company?

Should they begin development of in-house software?

Why?

Question With such a large company, changes to

the legacy system could potentially cripple their business structure. Did Cisco decide to implement changes one at a time or all at once? And why?

Implementation wouldn’t be phased Would be done all at once No customization to make implementation a

priority

Answer

Selecting an ERP productVENDORS

10 days writing Request for Proposals Given 2 weeks to

respond Invited in for 3 days

to demonstrate software Given sample data

Entire decision process took 75 days

DiscussionWho are some of the vendors Cisco consideredand why?

Answer Oracle: stronger manufacturing capability,

made long term development promises regarding functionality, flexibility offered by closeness

SAP AG: one of the largest business software companies

PeopleSoft, Inc. : HRMS, FMS, SCM, CRM, & EPM J.D. Edwards & Co: OneWorld ERP system

Going to the BoardQUESTIONS POSED BOARD’S REACTION How much would it

cost and how long would it take?

Negative initial reactions

Board eventually approved the project.

Next step was to incorporate the internet

Original proposal was 15 months, then 5, but started in Q3 and wanted to be stable by Q4

Officially committed 9 months and $15 million for the project

DiscussionWould the strategy employed by Cisco

at the time work successfully today? Would such a budget and stringent

timeline give trouble to a modern company?

Applications and BenefitsINTERNET & EXTRANET

Began development in early ‘90s

Shifted from Mosaic to Netscape browser

Cisco connection online

3 year investment $115 million

$100M for web enablement

$15M for ERP

InternetCISCO’S SUPPLY CHAIN MANAGEMENT

5 initiatives to automate Single enterprise Used networked apps New product

introduction Automated process for

gathering product data Autotest

Inventory displayed in real time “Global Networked

Business Model” Extranet supply

chain Information

transparency Outsourced

manufacturing

Internet Customer self service

through website 80+% tech support

delivered electronically Saved $506M annually 70% employees have a

bonus multiplier that are attached to customer satisfaction surveys

Marketing through web

Net commerce through web 90% software

upgrades via internet Productivity gains of

60% for Cisco & 20% for customers

Any place access through the web

Intranet Applications EIS & DSS

Executive & decision support, sales tracking & reporting went through the intranet

Employee self service Cisco Employee

Connection (CEC) Resources for 40k+

employees Web browser interface

Collaboration & workflow management

Web-enabled legacy systems

Question

Communication & distance learning Cisco tailored version of My Yahoo! Used “push” technology Strengthened culture

Whose website format did Cisco have their intranet tailored to?

Answer

Integrating Acquisitions into IP-based IT Architecture

2/3 technology internally developed

1/3 from partnerships/ acquisitions

70% CEOs from acquired companies were retained at Cisco

Acquired companies for their R&D

Acquisitions integrated 60-100 days

KPMG ACQUISITION Purchased ~20%

KPMG’s global consulting arm 1.05 Billion

Beyond CiscoKPMG ACQUISITION KPMG retained 80%

equity Used capital to build

6 tech. centers 4K consultants for

Cisco’s clientele KPMG was part of the

decision process with Oracle so it was only natural for the acquisition.

Where is Cisco now?ACQUISITIONS KEY ACQUISITIONS Focused on 3 pillars:

Build, buy, & partner Growth strategizing

on identifying and driving market transitions

Acquisitions are segmented into: Market acceleration Market expansion New market entry

1993 – Crescendo Ethernet market entry

1999 – Monterey Networks Optical transport market

entry 2003 – Linksys

Consumer networking 2005 – Scientific Atlanta

Set top boxes for Cable TV 2012 Litewire, Inc.

Optical interconnect tech.

Where is Cisco now?CORE COMPETENCIES

Kept design and fulfillment throughout economic struggles until 2009

Set 30 core focuses to take advantage of new opportunities of other companies who were cutting back

2011 Cisco realized it wasn’t meant to be a consumer company

At the beginning of 2012, Cisco narrowed down their list of 30 to 5

Where is Cisco now?INTRANET 2002-2006 Unified Intranet

Consistent UI Unified navigation Integrated enterprise

news Streamlined intranet

development Period enabled:

Informed workforce Corporate

communications Efficiency

Collaboration tools Democratizing

publishing Communication vehicles

Blogs Personal Project/Team Executive

Discussion forums Wikis

Enabling communication & collaboration

INTRANET 2006-2008

Where is Cisco now?INTRANET 2008-2011 Focused on

personalization and customization

Integrated workforce experience

“Me” is the key focus

New Work Find projects &

initiatives they want to work on advertized in a marketplace

Activities within workplace community

Flexibility & adaptability

INTRANET 2011- PRESENT

Where is Cisco now?EXTRANET

My Cisco Platform module My Cisco pull down My Cisco Workspace Multiple access levels

Accessible 24/7 for 83 countries

Training & Events 5 levels of IT

certification 8 different paths

3 distinct markets Enterprise Small business Home

Where is Cisco now?EXTRANET

Support Product support Downloads Contact Tools Forums Security Advisories

Partners Channel Partner

Program Resale channel Managed services

channel Outsourcing channel Cloud partner network Global partner network

Question Where are the other competitors that

Cisco was considering presently?

J.D. Edwards & Co. was purchased by PeopleSoft, Inc in 2003

PeopleSoft, Inc. was purchased by Oracle in 2005

SAP is currently one of the largest business software competitors and in the top 3 of highest revenue independent software provider.

Answer

DiscussionIf Cisco had decided to go with

another company that was acquired by Oracle, would Oracle still

consider providing support for the original implementation methods?

Or would they have Cisco convert all together?

What would be the reasoning behind each?

DiscussionSAP VS. ORACLE: WHICH WOULD’VE BEEN THE BETTER

CHOICE? SAP Mostly in-house

solutions Enhancing core

product offerings Standardized Leader in actual

business benefits realized

Oracle Solutions mostly

presented through acquisitions

Moving toward Fusion middleware (OFM)

Flexible 20% cheaper Highest satisfaction

(2008 study)

DiscussionShould Cisco be moving towards SOA

if they aren’t already?