Selecting an ERP Product
Cisco’s management team realized that implementing to meet business needs would require heavy
involvement from the business community. This could not be an IT-only initiative. It was critically
important to get the very best people they could find. Solvik elaborated: “Our orientation in pulling
people out of their jobs [to work on the project] was if it was easy then we were picking the wrong
people. We pulled people out that the business absolutely did not want to give up.”
Consistent with the need for a strong Cisco team, the company would also need strong partners.
Solvik and Redfield felt it was particularly important to work with an integration partner that could
assist in both the selection and implementation of whichever solution the company chose. Great
technical skills and business knowledge were a prerequisite. Solvik explained the choice of KPMG as
the integration partner:
KPMG came in and saw an opportunity to really build a business around putting in these
applications. They also saw this as kind of a defining opportunity, to work with us on this
project. As opposed to some other firms that wanted to bring in a lot of “greenies,” KPMG was
building a practice of people that were very experienced in the industry. For instance, the
program manager that they put on the job, Mark Lee, had been director of IT for a company in
Texas that had put in various parts of an ERP system.
With KPMG on board, the team of about 20 people turned to the software market with a multipronged
approach for identifying the best software packages. The team’s strategy was to build as
much knowledge as possible by leveraging the experiences of others. They asked large corporations
and the “Big Six” accounting firms what they knew. They also tapped research sources such as the
Gartner Group.6 By orienting the selection process to what people were actually using and
continuing to emphasize decision speed, Cisco narrowed the field to five packages within two days.
After a week of evaluating the packages at a high-level, the team decided on two prime candidates,
Oracle and another major player in the ERP market. Pond recalled that size was an issue in the
selection. “We decided that we should not put Cisco’s future in the hands of a company that was
significantly smaller than we were.”
The team spent 10 days writing a Request For Proposals (RFP) to send to the vendors. Vendors
were given two weeks to respond. While vendors prepared their responses, the Cisco team
continued its “due diligence” by visiting a series of reference clients offered by each vendor.
Following Cisco’s analysis of the RFP responses, each vendor was invited in for a three-day software
demonstration and asked to show how their package could meet Cisco’s information processing
requirements. Cisco provided sample data, while vendors illustrated how key requirements were
met (or not met) by the software.
Selection of Oracle was based on a variety of factors. Redfield described three of the major
decision points:
First, this project was being driven pretty strongly by manufacturing and Oracle had a promises regarding the long term development of functionality in the package.7 The other part
of it was the flexibility offered by Oracle’s being close by.8
Cisco also had reason to believe that Oracle was particularly motivated to make the project a success.
Pond provided his impression of Oracle’s situation: “Oracle wanted this win badly. We ended up
getting a super deal. There are, however, a lot of strings attached. We do references, allow site visits
and in general talk to many companies that are involved in making this decision.” The Cisco project
would be the first major implementation of a new release of the Oracle ERP product. Oracle was
touting the new version as having major improvements in support of manufacturing. A successful
implementation at Cisco would launch the new release on a very favorable trajectory.
From inception to final selection the Cisco team had spent 75 days. The final choice was teambased.
Solvik described how the decision was made and presented to the vendors:
The team internally made the choice and informed the vendors. There was no major
process we had to go through with management to “approve” the selection. We just said
“Oracle you won, [other vendor] you lost.” Then we went on to contract negotiations with
Oracle and putting a proposal together for our board of directors. The focus immediately
turned to issues of how long the project would take, and how much it would cost. The team
decided “yes, we will do this and we ought to go forward with the project.” So now at the
very end of April we were putting the whole plan together.