Eric Nguyen
Jerica Candalla
Duane Gonzales
Matthew Wurst
Roman Troyano
David Allen

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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

TOP MANAGEMENT



Don Valentine, initial
VC for Cisco
Reserved right to bring in professional management
After 1990 IPO both founders sold their stock and left Cisco
BUSINESS STRATEGY
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
John Chambers became
CEO in1995 after coming from Wang
Laboratories in 1991
Plan with 4 elements:

Broad product line

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Systematize acquisitions
Set industry wide software standards for networking
Pick the right partners

PETER SOLVIK
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
Came from Apple in
1993
Gave 2 key challenges


IT department was too traditional
Too internally oriented
CHANGES
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
IT reporting went to
Senior VP of customer advocacy
IT budget was returned to functions
Central IT steering committee was disbanded


Cisco’s legacy system failed in 1994

Shut down for 2 days

How 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?


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

VENDORS
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
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

Who are some of the vendors Cisco considered and why?
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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

QUESTIONS POSED
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How much would it cost and how long would it take?
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
BOARD’S REACTION
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Negative initial reactions
Board eventually approved the project.
Next step was to incorporate the internet

Would the strategy employed by Cisco at the time work successfully today?
Would such a budget and stringent timeline give trouble to a modern company?

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INTERNET & 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

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CISCO’S SUPPLY CHAIN MANAGEMENT
5 initiatives to automate
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Single enterprise
Used networked apps
New product introduction
Automated process for gathering product data
Autotest
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Inventory displayed in real time

“Global Networked
Business Model”
Extranet supply chain

Information transparency

Outsourced manufacturing

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Customer self service through website
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80+% tech support delivered electronically
Saved $506M annually

70% employees have a bonus multiplier that are attached to customer satisfaction surveys
Marketing through web
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Net commerce through web
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90% software upgrades via internet
Productivity gains of 60% for Cisco & 20% for customers
Any place access through the web

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EIS & DSS

Executive & decision support, sales tracking & reporting went through the intranet
Employee self service

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Cisco Employee
Connection (CEC)
Resources for 40k+ employees
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Web browser interface
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Collaboration & workflow management
Web-enabled legacy systems

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Whose website format did Cisco have their intranet tailored to?
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Communication & distance learning
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Cisco tailored version of My Yahoo!
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Used “push” technology
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Strengthened culture

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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
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Purchased ~20%
KPMG’s global consulting arm

1.05 Billion

KPMG ACQUISITION
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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.

ACQUISITIONS
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Focused on 3 pillars:
Build, buy, & partner
Growth strategizing on identifying and driving market transitions
Acquisitions are segmented into:
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Market acceleration
Market expansion
New market entry
KEY ACQUISITIONS
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1993 – Crescendo

Ethernet market entry
1999 – Monterey
Networks
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Optical transport market entry
2003 – Linksys
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Consumer networking
2005 – Scientific Atlanta

Set top boxes for Cable TV
2012 Litewire, Inc.

Optical interconnect tech.

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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

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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

INTRANET 2002-2006
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Unified Intranet
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Consistent UI
Unified navigation
Integrated enterprise news

Streamlined intranet development
Period enabled:
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Informed workforce
Corporate communications
Efficiency
INTRANET 2006-2008
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Collaboration tools
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Democratizing publishing
Communication vehicles
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Blogs
 Personal
 Project/Team
 Executive
Discussion forums
Wikis
Enabling communication
& collaboration

INTRANET 2008-2011
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Focused on personalization and customization
Integrated workforce experience
“Me” is the key focus
INTRANET 2011- PRESENT
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New Work

Find projects & initiatives they want to work on advertized in a marketplace
Activities within workplace community
Flexibility & adaptability


My Cisco

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Platform module
My Cisco pull down
My Cisco Workspace

Multiple access levels
EXTRANET
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Accessible 24/7 for 83 countries
Training & Events
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5 levels of IT certification
8 different paths
3 distinct markets
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Enterprise
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Small business
Home


Support
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Product support
Downloads
Contact

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Tools
Forums
Security Advisories
EXTRANET

Partners

Channel Partner Program
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Resale channel
Managed services channel
Outsourcing channel
Cloud partner network
Global partner network


Where are the other competitors that Cisco was considering presently?

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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.

If 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?

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SAP 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
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Oracle
Solutions mostly presented through acquisitions
Moving toward Fusion middleware (OFM)
Flexible
20% cheaper
Highest satisfaction
(2008 study)

Should Cisco be moving towards SOA if they aren’t already?