From Stanford Love Story to Global Giant
An Analysis of Cisco Systems
By Tera Stefanek
ISM 158, UCSC
February 6, 2004
1
OBJECTIVE OF THE PAPER
SECTION I: Telecommunications Network Equipment Industry
A. Industry Profile
B. Competitive Strategies in the Industry
C. Porter Model Evaluation of Industry Forces
D. Globalization of the Industry
E. Importance of Information Technology to the Industry
SECTION II: Cisco Systems
A. Cisco Systems Profile
B. Market and Financial Performance
C. Competitive Strategy Statement
D. Significance of Information Systems
E. Strengths and Weaknesses of Cisco
SECTION III: Structured Analysis of Information Systems Use
A. Strategic Option Generator
B. Roles, Roles, and Relationships
C. Redefine/Define
D. Significance of Telecommunications
E. Success Factor Profile
SECTION IV: Final Analysis
A. Success of Business Strategy and IT Use to Date
B. Have the Above Factors Positioned Cisco for the Future?
BIBLIOGRAPHY
2
Objective of the Paper
This paper will examine the main business strategies and role of information
systems used by Cisco Systems to gain and maintain a competitive advantage in the
Telecommunications Network Equipment Industry. It is divided into four main
sections. The first section explores the profile of the Telecommunications Network
Equipment Industry, addressing competitive strategies within the industry, industry
environmental factors in the United States Market, globalization of the industry, and
the importance of information technology. The second section focuses on Cisco
Systems, Inc., sketching the company’s profile, market and financial performance,
competitive strategy, strategic use of information systems, and its strengths and
weaknesses. The third section further analyzes the use of information systems by
Cisco Systems, Inc., and the fourth section evaluates the success of Cisco’s business
strategy and information systems to date and theorizes how effectively the company
is positioned for the future.
Section I: Telecommunications Network Equipment Industry
A. Industry Profile
The Telecommunications Network Equipment Industry covers the overlapping
area between the Telecommunications Equipment Industry and the related Computer
Networking Equipment Industry. Thus it consists both of “companies that design,
manufacture, market, and distribute equipment for long-distance, local, and corporate
telecommunications networks” and “companies that design and manufacture network
communication devices, security hardware, routing equipment, and wireless networking
products”.1 Most companies pick one of the two industry segments in which to
concentrate their efforts, but with the increasing emergence of voice/data integration the
two industries continue to find new common ground. Although there are some smaller,
usually newer companies in the market, most of the main competitors are large and/or
well-established enterprises such as Siemens AG, IBM, Dell, Lucent Technologies, and
Cisco.
Telecommunications
Equipment
Lucent,
Nortel,
CIENA
Dell,
IBM,
HP,
Apple,
Samsung,
Extreme
Computer Networking
Equipment
Cisco,
3Com,
Siemens
Figure 1
1
“Computer Network Equipment Industry”, Hoover’s Online
3
One of the largest and most profitable segments within the industry is Routing
and Switching Equipment. Cisco continues to dominate this segment which contains its
bread and butter products.2 Other companies active in this segment include: Dell, 3Com,
Samsung Electronics, D-Link, Juniper Networks, NETGEAR, Enterasys Networks, and
Extreme Networks.
The United States Market of the Telecommunications Network Equipment
Industry experienced serious challenges beginning in 2001 with the burst of the dot-com
bubble. However, the technology sector of the United States economy appears to be
gradually gaining in vitality; furthermore in addition to the increasing amount of data
generated by businesses, a “replacement cycle of buying new equipment” is predicted in
the near future by the many companies who re-vamped their computing systems to avoid
Y2K errors.3 As shown in figure 1 below, dollar sales for 2003 varied widely. The 2003
employee numbers shown give an idea of the relative sizes of these companies.
2003 Net Income (mil.) 2003 Sales (mil.) Employees
3Com
($283.70)
$932.90
3,300
Apple
$69.00
$6,207.00
10,912
CIENA
$386.50
$283.10
1,816
Cisco
$3,578.00
$18,878.00
34,000
Dell
$2,122.00
$35,404.00
39,100
Extreme Networks
($197.20)
$363.30
890
HP
$2,539.00
$73,061,0
141,000
IBM
$7,583.00
$89,131.00
355,421
Lucent
$770.00
$8,470.00
34,500
Nortel Networks
$732.00
$9,807.00
36,960
Samsung Elec.
$5,878.50
$49,650.50
50,000
Siemens AG
$2,848.00
$86,467.00
417,000
SPX
$127.40
$5,045.80
24,200
Figure 2 “Computer Networking Equipment: Hoover’s Most Viewed Companies”
Due to the large and diverse nature of this industry, it can be helpful to compare
the top direct competitors to narrow the focus of investigation. As shown below, Cisco
Systems, Inc. most directly competes against Alcatel, Nortel Networks, Lucent
Technologies, Juniper Networks, and Extreme Networks. Each of these companies is
active in the core network equipment market of routers and switches, and has expanded
increasingly into new voice and data integration markets as new technologies developed.
2
“Cisco Systems, Inc.”, Hoover’s Online
3
“Cisco Systems”, Value Line, 2003
4
Revenue: 2003
Cisco Systems, Inc.
18,878,000
Alcatel
17,350,000
Nortel Networks Corp.
10,569,000
Lucent Technologies, Inc.
8,470,000
Juniper Networks
701,393
Extreme Networks, Inc.
363,276
2002
18,915,000
22,811,000
17,511,000
12,321,000
546,547
441,609
2001
22,293,000
29,486,000
30,275,000
21,294,000
887,022
491,232
Figure 3: www.yahoo.finance.com
Perhaps most meaningful are the 2003 net income amounts, where Cisco and
Juniper show the only positive numbers for the six companies depicted. The
Telecommunications Network Equipment Industry still suffers from the trickling revenue
streams as its customers spend cautiously or not at all.
Net Income: 2003
2002
2001
Cisco Systems, Inc.
3,578,000
1,893,000 (1,014,000)
Juniper Networks
39,199
(119,650)
(13,417)
Extreme Networks, Inc.
(197,180)
(183,962)
(68,883)
Lucent Technologies, Inc.
(770,000) (11,753,000) (16,198,000)
Nortel Networks Corp.
(3,266,000) (27,302,000) (3,470,000)
Alcatel
(12,070,000) (4,934,000)
1,243,000
Figure 4: www.yahoo.finance.com
Companies in the industry tackled massive reorganization schemes, including
layoffs and spin-offs, to cope with the crippling combination of sales downturn and debt
caused by bankrupt customers defaulting on loans. Overseas markets, particularly China,
provide an increasingly lucrative opportunity for expansion. Encouragingly, the 2003 net
income for most of the companies shown significantly improved over 2002 net income.
However, the prevalence of negative numbers suggests that the industry is still on the
road to recovery.
B. Competitive Strategies in the Industry
The industry exists in four major markets: North America, Latin America, Europe,
and the Asia/Pacific Region. Within each of these geographic markets there are four
types of customers: large corporations, small/medium businesses, public institutions, and
service providers. Each of these customer types desires a different mix of products. The
main product segments in the Telecommunications Network Equipment Industry are
routers, switches, network software, cable products, services (support and educational),
and voice/data integration.
Companies within the industry tend to structure themselves in three ways:
independent enterprises, allied with other companies, and as joint ventures and/or
subsidiaries. Manufacturing is handled through vertical integration, through vendors, or
through outsourcing. Sales can be through the Internet, distributors, or a full sales force.
5
Information systems tend to support the business strategies of the industry’s companies in
four main areas: engineering, manufacturing, sales, and businesses processes.
Business Strategy Model
Telecommunications Network Equipment Industry
Product Strategy
Router
Switches
Network Software
Cable Product
Services
Voice/Data Integration
Customer Strategy
Large Corporations
Small/Medium Businesses
Public Institutions
Service Providers
Market Strategy
North America
Latin America
Europe
Asia/Pacific Region
Manufacturing Strategy
Vertically Integrated
Vendor Emphasis
Outsource
Sales Strategy
Distributors
Internet
Full Sales Force
Company Structure
Independent
Company Alliance
Joint Ventures and/or Subsidiaries
Information Systems Strategy
Engineering System
Manufacturing System
Sales System
Business Systems
Figure 5
The main industry strategy to date has been differentiation, however new entrants
from both other industry and geographic areas are trying to gain market share through
an emphasis on lower costs. This strategy may cause headaches for current market
leaders; still, telecommunications network equipment is often a large capital
expenditure and many large customers place importance upon established, stable
companies when they decide where to buy. Innovation is key to the strategy of
differentiation. Companies that can provide new products and services, or can
provide products and services in a new way that offers increased value to the
customer gain an advantage over competitors. Growth drives much of the industry’s
expansion into emerging markets both technological and geographical. Alliances and
acquisitions allow companies to expand product portfolios and become the end-to-end
solution provider that customers desire.
C. Porter Model Evaluation of Industry Forces
Michael Porter’s Competitive Model analyzes industry structure, typical
competitive strategies, and the power structure within the industry in a specific market.
6
The model in figure 6 outlines the Telecommunications Network Equipment Industry in
the United States Market, offering a more concentrated look at the environment
surrounding the companies and the interactions between rivals, suppliers, and buyers,
new entrants, and potential substitute products and services. The Strategic Business Unit
identified in this case is Cisco Systems, Inc. and its foremost competitors in the United
States market are listed under intra-industry rivalry
Porter Competitive Model
Telecommunications Network Equipment Industry – U.S. Market
Potential
New Entrants
Bargaining
Power
of Suppliers
•IT Vendors
•Component Manufacturers
•Standards Organizations
•Outsource Manufacturers
•Technical Experts
• Strategy Shift by Existing Companies
•Foreign Companies
•Start-ups
•Huawei Technologies, Inc.
Intra-Industry Rivalry
SBU: Cisco Systems
Rivals: Lucent, Nortel, Dell,
Juniper Networks, Alcatel,
Small Companies
Substitute
Products
and Services
•Video conferencing
•Business Trips
•Telephones
•Overnight mail
•Used equipment sellers
•Outsource network management
Bargaining
Power of Buyers
•Large Corporations
•Small and Medium Business
•Service Providers
•Universities
•Resellers
•State Governments
•Federal Government
Figure 7
The Bargaining Power of Buyers
The bargaining power of buyers generally hinges upon volume. The greater the
percentage of a company’s business a customer provides, the more influence that
customer has upon the company. Another factor is the nature and degree of competition
among companies in the industry.
Although there are multiple companies within the Telecommunications Network
Equipment Industry, relatively few of them have large market share and provide the
end-to-end product and services portfolio that many buyers seem to prefer. Despite
some recent low-price tactics taken by new entrants, the primary strategy of
companies within the Telecommunications Network Equipment Industry is
differentiation. Most buyers value the stability of an established company when
making significant technological investments, and also place importance upon timely,
7
skilled support services. The most successful companies in the industry place great
importance upon customer feedback and maintaining good business relationships.
The Bargaining Power of Suppliers
Key providers of products and services can contribute to the competitive posture
of companies within an industry. However, due to the large number of suppliers to the
Telecommunications Network Equipment Industry, companies can acquire their inputs
from a variety of sources. Because the products and services supplied aren’t unique, the
suppliers don’t have very much bargaining power. In fact, Cisco Systems gives out
awards each year to the suppliers that it feels have provided the best support, and the
suppliers thus honored vary from year to year.4 Due to the economic downturn during
the last few years, many of the telecommunications networking equipment companies
have been struggling to find customers and thus the few more successful companies had a
strong bargaining position with suppliers.5 Many system builders also are giving current
and potential passive and active components suppliers extra scrutiny as reports persist of
failures tied to unreliable parts procured from local sources in Taiwan, China and
elsewhere. Cisco, for example, has started a new program that classifies component
suppliers into several categories, including preferred and prohibited. Using the
guidelines of this ranking system, Cisco tries to leverage its purchasing power to cut
component costs and focus its business on fewer suppliers. The highest-level and
preferred suppliers are those who feature the broadest offering, global presence and
technology leadership. 6
There are no significant unions involved in this sector. Thus the human resources
although necessary, especially in the areas of business savvy and technical expertise, are
not collectively organized and don’t command group power over the industry’s
companies. However, the increasing trend toward outsourcing may increase the
bargaining power of suppliers in the future.
Threat of New Entrants
Three main types of new entrants can exist: new companies, existing companies
from different industries, and existing companies from geographical regions. One use
of the Porter Competitive Model is to identify high entry/exit costs or high switching
costs for customers which might deter new entrants.
Possible new entrants to the Telecommunications Network Equipment Industry
would be existing telecommunications or computer equipment companies in the
United States seeking to expand in new areas. Dell came from this category, selling
networking equipment to the “cost conscious small- and medium-sized businesses” to
4
“Texas Instruments Honored as Part of Cisco Systems 'Supplier of the Year' Awards”, Dec. 31, 2003
“Cisco Systems”, Value Line, 2003
Levine, Bernard. “Quality quandary grows: right price-to-performance solution being sought in the
component market. (Cisco Systems pricing strategy).” Electronic News, Nov 4, 2002
5
6
8
which it was already selling desktop computers and servers. 7 Foreign
telecommunications or network equipment companies can also seek to expand into
the U.S. market. Such was the case with Alcatel, attracted by the “fat gross profit
margins, which can top 70 percent of sales”. 8 Huawei Technologies, the largest
telecom equipment manufacturer in China, has indicated strong interest in
establishing a significant presence in the U.S. market.9
Threats of Substitute Industries
The products and services provided by the Telecommunications Network
Equipment Industry focus on timely information. Substitutes would be videoconferencing, telephone calls, overnight delivery services, and business trips. Each of
these tend to take more time and be less flexible than e-mail, websites, electronic
message boards, and the other technologically enabled means of communication.
While business trips and video-conferencing may result in more personalized contact,
they are more expensive in terms of employee time and thus don’t scale well as
communications solutions. Video-conferencing technology still needs to grow to be
as mature as networking technology.
The two main substitutes that most affect the relationship industry players have
with customers are outsourced network management and used equipment sellers.
Both of these trends address customers’ desire for cost-cutting alternatives. These
trends have been especially prevalent among small and medium businesses, and
during the last few years with the downturn in information technology spending.
Conclusions Based on Porter Analysis
The Porter Competitive Model provides a structured evaluation of the
Telecommunication Network Equipment Industry. It explores the industry’s
environment through the interaction of major competitors, and the influence of buyers
and suppliers with industry players. Buyers of large product volumes have significant
power. Suppliers, however, have little power due to fierce competition and the large
percent of their income that stems from the telecommunications network equipment
industry. New entrants and substitutes continue to pose potential threats to current
industry leaders. Through a low-cost strategy, foreign companies, startups, and
existing companies making an industry shift continually attempt to enter the
telecommunications network equipment industry and steal market share. The main
substitutes adopted by customers have been outsourced network management and
used equipment sellers. Competition within the industry has increased due to these
factors.
7
“New rivals take aim at Cisco's networking market”, Jan. 4, 2003
8
“The French are coming”, Wired News Report , Jun. 26, 2003
9
“New rivals take aim at Cisco's networking market”, Jan. 4, 2003
9
D. Globalization of the Industry
The increasing globalization of the telecommunications network equipment
industry is directly linked to the increasing importance of global communications in
the business world. The Internet in particular provides a far-reaching, cost-effective
channel to reach new geographic markets. As more companies desire to sell products
and services in distant markets, the demand for telecommunications network
equipment grows. Thus companies within the industry have found it vital to do
business on a global scale. In 2004, companies based in the United States, including
Cisco, Nortel, and Motorola, won contracts worth $2.3 billion with Chinese phone
companies.10 The products and services provided by the telecommunications and
network equipment industry travel easily across national boundaries, with only minor
language changes necessary for success.
E. Importance of Information Technology to the Industry
Companies competing in the Telecommunications and Network Equipment
industry depend upon information technology to enable every major business function in
the value chain. The global communications capabilities made possible through IT are
vital to these multinational companies to maintain relationships with company
departments, customers, suppliers, and partners worldwide. Many competitive
advantages within the industry such as greater efficiency, leaner operations through
outsourcing, expanded customer service through online applications, and the increased
volume of online sales all depend upon effective use of information technology.
Furthermore, the increasing numbers of global companies dependent upon information
technology provide a rich market for the products provided by the industry.
Telecommunication Network Equipment Industry Value Chain
Research
And
Development
Production
Engineering
and
Manufacturing
Marketing
Sales
and
Distribution
Customers
Figure 8
10
Cox, Jonathon B. “Walking Out of the Basement”. NewsObserver. Jan. 18, 2004
10
Section II: Cisco Systems
A. Cisco Systems Profile
Cisco is the industry leader in data networking, IP Communications, and the
fastest-growing company in the enterprise telecommunications marketplace. 11 Now a
global giant, legend has it Cisco began as an idea when Sandy Lerner and Len Bozack,
both graduate students at Stanford University, desired to solve the inconsistencies
between the networks in their separate departments. During their early search for funding,
they journeyed to over the Golden Gate Bridge to San Francisco and claim that both
Cisco’s name and its company logo were inspired by that trip. Gifted with the right
product at the right time, and aided by the efforts of many determined, talented people,
Cisco grew. In 1990, the company went public as Cisco Systems, Inc. Today, the
company operates worldwide. Even while restructuring due to the market downturn of
the last couple years, Cisco earned a net income of $3,578 million for a one-year net
income growth of eighty-nine percent.
Key People
Don Valentine: former Chairman
Don Valentine’s efforts shaped Cisco Systems, Inc. into the company it is today.
As general partner of Sequoia Capital venture fund, he was the company’s sole initial
investor and hired many of the formative people in Cisco’s early history, including John
Morgridge. He also became the initial chairman of the Cisco board of directors providing
a stable influence during the management turmoil of the early years.
John P. Morgridge: Chairman
John Morgridge was hired as Cisco’s Chief Executive Officer in 1988 by
Valentine to bring order and unification to the chaotic management team of Cisco. Under
his leadership, the company expanded from $5 million in sales to over $1 billion and
from 34 employees to over 2,260. In 1990 he took the company public, after
restructuring helped Cisco grow out of its early engineer-focused culture. Morgridge,
known within Cisco as “Mr. Frugality”, continued the company’s early established
tradition of keeping costs low. He was appointed Chairman in 1995 and shares a
background in sales with his successor, John T. Chambers.12
John T. Chambers: President and Chief Executive Officer
John Chambers’s sales background has served him well as Chief Executive
Officer of Cisco Systems, Inc. His articulate evangelizing promoted networks as the
11
12
“Cisco Systems”. Lexis-Nexis. Oct. 2003
“John Morgridge” Executive Management Team
11
future, with his own company not only a prominent supplier but also an excellent
example of implementation. His competitive personality led to Cisco’s principle not
to compete in markets unless it believes it can win either the first or second position.
Chambers adopted this fundamental tenet of his leadership from former General
Electric CEO Jack Welch.13 As CEO of Cisco, John Chambers reinforces the
company’s culture continually. His emphasis on customer satisfaction and
maintaining Cisco as its own best IT example influence all levels of the company.
Pete Solvik: former CIO
As the Chief Information Officer for Cisco Systems, Inc. Pete Solvik supervised
the launch of many of Cisco’s key IT systems including the Client Funded Project,
Enterprise Resource Planning, and Cisco Connection Online systems. Through the
implementation of these systems, the role of IT within Cisco expanded from a cost
center to an enabler of business strategy tying the company closer to its customers,
partners, and suppliers.
In the 2001 expansion of the company’s Information Technology Organization,
Brad Boston was appointed as Cisco’s CIO. Peter Solvik continues to lead Cisco’s
Internet Capabilities Group.14
Brad Boston: Senior Vice President and CIO
Brad Boston held various executive positions at a variety of companies before
becoming CIO of Cisco Systems. This depth of business experience provides a
valuable resource to the CIO in understanding the best use of IT to enable Cisco’s
business strategies.
According to Boston, the goal of IT today is “leveraging a foundational set of
systems across the business to increase productivity.” As senior vice president and
CIO of Cisco Systems, Inc. Boston is responsible for the company’s worldwide use of
IT, and led the launch of Cisco’s new web site in 2002 to provide increased value to
the customer. He is driving Cisco's IT foundation strategy to enable end-to-end
business processes and IT efficiencies throughout the organization. 15
Wim Elfrink: Senior Vice President, Customer Advocacy
Sandy Lerner, co-founder of Cisco Systems, Inc. established the customer
advocacy focus in the company’s early days. From the beginning, she made sure that
Cisco’s engineers listened to the customers believing that this focus was critical to the
company’s success.
As the former Chief Customer Officer, Doug Allred persisted in the promotion of
customer interests within Cisco. He championed the Oracle ERP system in the early
13
Waters, John K., John Chambers and the Cisco Way. 2002 John Wiley and Sons, Inc.
“Cisco Appoints Bradford Boston as New Chief Information Officer”. News@Cisco
15
“Brad Boston, CIO” Executive Management Team.
14
12
1990s that decreased order lead time from twelve to three weeks thus increasing
customer satisfaction. 16
As current head of Customer Advocacy, Wim Elfrink takes up the charge to
accelerate customer success with Cisco network technology and applications that
meet business needs. He reports directly to CEO John Chambers, while customer
service, product design, and IT groups all report to Customer Advocacy. This
organizational structure clearly emphasizes the central role customer satisfaction
plays at Cisco Systems.17
B. Market and Financial Performance
According to John Chambers, Cisco expects a rise in information technology
investments in 2004. As the demand for data storage systems equipment, security, and
personal computers gains strength, the company’s prospects should improve. As seen in
the figure below, although revenue has decreased over the past three years, net income
has risen significantly. Following the downturn of the technology sector in 2001, Cisco
Systems restructured its business to aid recovery.
Cisco Systems, Inc.
2003
2002
2001
Revenue
18,878,000 18,915,000 22,293,000
Net Income
3,578,000 1,893,000 (1,014,000)
Figure 9
Even as the technology sector begins to regain health, Cisco will not be adding
more staff until revenue per employee reaches at least $700,000, and its ultimate goal is
to generate $1 billion in revenue per employee, Chambers said. In the previous quarter,
Cisco's sales per worker reached $596,000. 18
C. Competitive Strategy Statement
Cisco Systems focuses its differentiation strategy on three key markets:
routing/switching, service providers, and emerging technical markets. The company
targeted growth by acquiring network start-ups rather than relying solely on the more
traditional industry strategy of cultivating relationships with established companies.19
A recent example is the purchase of Linksys, the leading manufacturer of home
networking products, through which Cisco can move into wireless home networking
and the consumer marketplace.20 Still, Cisco did not ignore alliances. In 2003, Cisco
and AT&T announced their intention to collaborate by aligning their marketing and
sales forces to promote the delivery of AT&T services that use Cisco networking
16
Waters, John K., John Chambers and the Cisco Way. 2002 John Wiley and Sons, Inc.
“William Elfrink” Executive Management Team
18
“Cisco expects demand to pick up in 2004”. Infotrac. Dec. 10, 2003
19
Heskett, Ben. “Chambers' tale of Icarus”.
20
Boulton, Clint. “Cisco Acquires Linksys for $500M” InternetNews.com. March 20, 2003
17
13
technology.21 Further, John Chambers has publicly announced his intention to
“partner with Microsoft and other key players in the industry.” 22 In February 2004,
Cisco announced a joint product offering of voice-over-IP for mobile service
providers with its competitor, Lucent Technologies. This example also highlights
Cisco’s strategy of innovation, with regard to both products and services. The
company continually seeks out developing technologies and fresh applications with
the goal of expanding into new markets and increasing customer satisfaction.
Chambers is particularly enthusiastic regarding virtual network organizations
where companies focus on what adds sustainable value and outsource to take
advantage of other’s strengths, tying the virtual organization together with a
network.23
D.
Significance of Information Systems
According to CEO John Chambers, “Cisco’s use of information technology is one
of the key historical success factors of the company.” Cisco defines the mission of IT as
a partnership with the business to define, implement, and support leading Internet
capabilities in all functions. Specifically, Cisco’s IT department seeks to increase
revenue in new markets and channels; increase customer, client, and partner success and
satisfaction; and increase efficiency and effectiveness throughout the company. Further
IT aspires to serve as Cisco’s first and best customer, while scaling to support the growth
of the company to $50 billion in revenue. And the IT department intends to accomplish
all of the above cost effectively.
Contributing to the successful use of information systems at Cisco is the extensive
functional management team involvement in IT. With an eye toward flexibility and the
rapidly shortening product cycle, each business function makes rapid tradeoffs between
the costs of IT related decisions and other unit expenses. Although the company
manages infrastructure investment centrally, IT employees reside in functional areas and
have a dual reporting relationship.
Pete Solvik, former Cisco CIO, points to the IT investment model as “one of three
key shifts that made Cisco IT successful.” There are four strategic objectives that
comprise Cisco’s IT investment model. The first is the Client Funded Project (CFP)
model. In following the CFP model managers make specific trade-offs, weighing
business unit costs and benefits against the costs of their IT related decisions. Secondly,
all IT activities are measured for value and continual productivity improvements both
initially and on an ongoing basis. Thirdly, Cisco aims to minimize IT allocations and
achieve consistent global treatment of IT accounting. Finally, Cisco operates with the
assumption that the networking and data center infrastructure is, or will be, in place and
well run so that business results are obtained quickly from applications investments.
Within this last strategic objective lies a directive to the IT department to make sure that
the capabilities and capacity of the information technology infrastructure remain ahead of
the company’s growth and evolving business needs. 24
21
“You Scratch My Back…” Wired News Report Feb. 25, 2003
McLean, Dan. “A Chat with Chambers Offers Some Frank Feelings”. Lexis-Nexis. Oct. 2003.
23
“Cisco Chief: Future May Lie in Virtual Networks” USA Today. Nov. 12, 2001
24
“Cisco IT Financial Management Approach”, CiscoExpo Belgrade 2002 Opening and Keynote
22
14
Cisco IT’s Historical “Shifts”
Key IT Success Factors:
•Organization model
•Exceptional staff
•Receptive Company
2000
Level 4:Consultative Proactive Leadership
High
1997
Strategic Impact
Level 3: Use of Internet, CCO
1995
Level 2: Repl. of all key apps (ERP)
1993
Level 1: CFP model
1991
Low Level 0: IT as cost center
Time
Figure 10 : CiscoExpo Belgrade 2002 Opening and Keynote
E. Strengths and Weaknesses of Cisco
Strengths
The strong brand name, expertise, and global reach of Cisco Systems have
allowed it to collaborate with the International Telecommunication Union (ITU) to
provide Internet education and greater access to information technology throughout the
developing world. This collaboration includes establishing 20 new Internet Training
Centers in Ministries of Communications, or their equivalent, all running the Cisco
Networking Academy Program.25 By training people worldwide with their networking
equipment, Cisco encourages the demand for networking equipment in general and for
their familiar brand in particular.
By offering a wide array of benefits and focusing on the details of workplace
satisfaction, Cisco achieved an attrition rate of less than 9 percent, remarkable for Silicon
Valley.26 One facet of workplace satisfaction lies in providing employees with
information technology tools that allow them to increase productivity and work both
more efficiently and more effectively.
“International Telecommunication Union and Cisco Systems Join Forces to Bring Networking Skills to
Governments in Developing Countries and Economies in Transition”. Oct. 16, 2003
26
Kiger, Patrick J. “Cisco's homegrown gamble: the company that believed buying talent was key to
success now relies on growing its own stars. Not everyone is convinced the strategy will keep Cisco on
top.” Workforce , March 2003
25
15
Cisco’s strong culture, continually emphasized and championed by CEO John
Chambers, is one key to the company’s success. Each employee must carry his or her
culture badge at all times while working. This card tangibly emphasizes the commitment
of senior management and the company as a whole to the values that have led to their
phenomenal success and contains a reminder that the ultimate goal is customer success.
Weaknesses
The large number of company acquisitions that allowed Cisco’s rapid growth in
multiple emerging markets, also resulted in an unwieldy product development system.
Not only did many of the hundreds of products in inventory failed to contribute much
to the bottom line, but Cisco was plagued by delivery lapses too. After the dot-com
bubble burst in 2001, CEO John Chambers realized the need for reorganization for
better control over the product development system.
Big-name customers can be key for investor confidence during periods of
economic shakiness, and in this area Cisco has been vulnerable. Another of
Chamber’s post-bubble goals directs Cisco’s sales staff to pursue more stable
telecommunications customers. 27
With the end of the dot-com growth era in 2001, the trade-offs that Cisco made
between growth and efficiency became apparent. To aid recovery, the company laid
off a fifth of its workforce and began consolidating and streamlining its far-flung
operations. The lack of prior planning for shrinkage necessitated a stressful evolution
in Cisco’s corporate culture. 28
Section III: Structured Analysis of Information Systems Use
This section addresses the business strategies that have established and
maintained Cisco Systems Inc. as a major player in the Telecommunications Network
Equipment Industry. Further, it explores the company’s use of information systems
to gain competitive advantage by supporting and enabling those business strategies.
Heskett, Ben. “Chambers' tale of Icarus”.
Kiger, Patrick J. “Cisco's homegrown gamble: the company that believed buying talent was key to
success now relies on growing its own stars. Not everyone is convinced the strategy will keep Cisco on
top.” Workforce , March 2003
27
28
16
A. Strategic Option Generator
The Strategic Option Generator identifies strategic opportunities for information
systems to enable business processes, and can also be used to evaluate the
competitive advantage gained by companies that have successfully used information
systems. Analyzing the layers of the model helps identify the combination of factors
that enabled the enterprise to gain and maintain a competitive advantage through the
utilization of information systems.
Target
The three possible strategic targets are customer, competitor, and supplier.
Identifying the primary target helps to understand the focus and logic of a major
business strategy that resulted in the successful use of information systems. Through
Cisco’s ongoing emphasis on being its own best example of product use it has
focused upon targeting the customer. The innovative implementation of this business
strategy supported by the very information systems that Cisco touts to its customers,
has enabled Chambers to confidently espouse the value of Cisco products and
services. For example, the Manufacturing Connection Online allows Cisco to operate
as if its suppliers and business partners were internal business divisions, in terms of
information flow. This accomplishment allows Chamber’s to advocate the value of
virtual network organizations from a position of experience.
Thrust
Thrust deals with business strategies based on the Porter competitive strategy
concepts. Cisco has chosen and maintained differentiation as its primary competitive
strategy. Some of the new entrants to the Telecommunications Network Equipment
Industry, such as Dell and Huawei, are trying to gain market share with a least-cost
strategy. However, Cisco maintains that customers prefer the security of established
stable companies with which they can maintain an ongoing relationship. The
information content and customer support which Cisco offers translate to customer
value by improving the performance of Cisco products.
In addition, Cisco has selected all of the secondary strategy options: innovation,
growth, and alliances. With the Cisco culture emphasizing the criticality of flexible
change in today’s fast-paced environment, the company constantly looks for
emerging technologies and market transitions. Taking advantage of new
opportunities means not only innovating products and services, but also business
processes. When opportunities were identified, Cisco relied primarily upon
acquisitions to achieve significant growth and expand into new markets. It also
utilized alliances to quickly position the company in new technological and
geographical markets.
17
Mode
Although adopting a previously proven strategy can minimize technical risk, the
business risk generally increases when companies follow in the footsteps of their
competitors. Generally only large, established companies with a lot of resources can
hope to gain significant market share after letting other companies prove that the
market is viable. While Cisco is now a fairly large and established global company, it
wasn’t that many years ago that it was small. John Chambers believes the days where
large companies could enter markets late and use their vast resources to take over a
large portion of market share are over. So the company continually looks for
expansion opportunities in new market niches. Often the markets are so new that
there aren’t any proven paths to follow. Thus Cisco has adopted an offensive strategy,
leading in both business strategy and information systems use.
Direction
Appropriate users of the new system are identified based on the importance,
implications, and benefits of whether the use of information systems lies within the
bounds of the company or extends beyond. In identifying the users of the Cisco
information system, both the categories of internal use and external provide qualify.
The customer focus that pervades Cisco culture led to the establishment of systems
extending beyond the boundaries of the company for customer support, like Cisco
Connection Online. In addition, the emphasis that Cisco has placed upon being its
own best example of product and service use led to highly developed internal
information systems, such as the Cisco Employee Connection.
Cisco Systems Analysis
Using the Strategic Option Generator
TARGET
SUPPLIER
COMPETITOR
CUSTOMER
THRUST
DIFFERENTIATION
COST
INNOVATION
GROWTH
ALLIANCE
MODE
DEFENSIVE
OFFENSIVE
DIRECTION
USE
PROVIDE
EXECUTION
STRATEGIC
ADVANTAGE
Figure 11
18
Execution
Having targeted the customer and offensively applied differentiation, supported
by growth, innovation, and alliances as competitive strategies, while both internally
using and externally providing information systems, Cisco Systems was in a position
to execute. For over the last decade, the company has repositioned itself repeatedly,
transitioning with the market and keeping pace with the changing needs and desires
of its customers. Thus the company has grown from focusing on a single product to
providing an end-to-end business networking solution.
B. Roles, Roles, and Relationships
The concept of roles, roles, and relationships is composed of three attributes: the
role of information systems, the role of senior management, and the ongoing working
relationship between senior management and the information systems organization.
The role of information systems is focused on competitive priorities, while the role of
senior management is critical in positioning and prioritizing the competitive role of
information systems. The senior executive plays a key role by providing a long-term
vision for the future of the business, communicating this direction to the information
systems organization, and sponsoring the importance of data as an organizational
resource. Managers of major business functions must understand the competitive role
of information systems, identify requirements for new systems, provide financial
justification, and sponsor their information systems on an on-going basis. Having the
information systems executive function as a member of the senior management team
can be very beneficial for the organization. Another important aspect of roles, roles,
and relationships is the role of operational level people. Any competitive advantage
achievable through the use of information systems cannot be attained without the
cooperation of these users.
By establishing a regular flow of information between senior management and the
information systems organization, the organization achieves a partnership critical in
the pursuit of competitive advantage through the use of information systems.
The role of Cisco’s functional management and system users, in partnership with
IT application teams, has five main facets. The first step is to identify automation
opportunities, and calculate potential return on investment (ROI). The second is the
evaluation and reengineering of business processes. Third, functional management
must balance investment between automation efforts and headcount increases. Fourth,
they must create clear business strategy that includes the role of automation. Lastly,
each business unit is responsible for data ownership. Each of the above
responsibilities of functional management must fit into the overall business plan set
by executive management.
The role of Cisco’s executive management begins with the establishment of a
corporate vision and a reward program that encourages prudent technical risk.
Included are financial objectives that emphasize aggressive productivity goals.
Executive management provides the big-picture view on a cross-functional and global
level to minimize overlapping initiatives, architectural inconsistencies, and monitor
business risk. They establish and maintain a culture of teamwork and cross-
19
functional cooperation, as well as sponsoring continuous process improvement and
reengineering.
Cisco’s Client Funded Project (CFP) Organization Model
John Chambers
CEO
Business
Functions set IT
Project Priorities
Finances
Sales
HR
Larry Carter
CFO, SVP
Rick Justice
EVP
Barbara Beck
SVP
Finance IT
Sales IT
HR IT
Pete Solvik
CIO, SVP
NW/Telecom
IT Sets Standards,
Architecture, and Performs
Staff Mgmt.
Operations
Figure 12
It is the role of IT management to bridge the technical infrastructure capabilities
and business requirements. Within this role lie responsibilities to educate clients within
the company on new technologies, assess technical costs and risks in the calculation of
ROI, participate in and drive technology standards, and partner in business process
reengineering. 29 As CIO of Cisco in 1993, Pete Solvik led the implementation of the
Client Funded Project (CFP) model. The adoption of this model laid the foundation for
Cisco’s IT evolution from cost center to business-enabling strategic advantage. As
shown in the organization model for the Client Funded Project, Cisco’s IT department is
cross-functional. The goal of CFP lies in balancing IT drivers, like infrastructure costs,
with client drivers, such as business value.
At Cisco, recognition of IT’s value begins at the top. CEO John Chambers
champions the Cisco commitment to be the best implementer of the products they sell.
This commitment fits comfortably into the network-based culture of Cisco, and furthers
the worldwide communication infrastructure necessary for supporting the company’s
competitive strategy on a global scale.
In support of this interweaving of IT throughout the business functions of Cisco,
the IT department, under the direction of CIO Brad Boston, reports to Customer
29
“Cisco IT Financial Management Approach”, CiscoExpo Belgrade 2002 Opening and Keynote
20
Advocacy which is headed by CCO Douglas Allred. This promotes technical projects
tightly matched with customer service.30
Redefine/Define
In deciding whether information systems can be used to help the organization gain
and maintain a competitive advantage, it is important to remember that the ultimate
goal lies in providing value to the customer. There are three areas the business can
change or clarify to provide value to the customer: the business, products and/or
services, and business processes.
Due to the nature of Cisco’s business and products along with its emphasis upon
being the best model of IT business, Cisco has defined its business using information
technology as well as redefining its products. However the major focus of this
analysis is the redefinition of Cisco’s business processes. The driving factor behind
this redefinition was the rapid growth of the company through acquisitions and
market expansion, which led to increasing volumes and internal process problems.
Thus, Cisco improved its initial systems using information technology as the vehicle.
Specifically, the implementation of the ERP system by Pete Slovik marked the
transition from viewing the IT department as a cost center. Up to that point, the
company had separate systems for financial, manufacturing, and sales. Thus it lacked
the flexibility, scalability, and reliability necessary for supporting the rapid growth of
the business. But at the same time, information systems had evolved into a key
competitive advantage, generating most of Cisco’s sales. CEO John Chambers and
the Cisco Board of Directors lent their full support to the project by making it a
company strategic goal in 1995. By implementing ERP, Slovik aimed to more
closely allow the company’s IT infrastructure to enable its business strategy.
C. Significance of Telecommunications
Internet technology is enabling Cisco to achieve measurable gains in both
employee productivity and cost avoidance. Employee accessibility to Web-enabled tools
allowed Cisco to achieve revenue per employee of $54,000 in 2002, ranking the company
as the most productive in the networking industry. Among the IP technologies that have
helped Cisco increase productivity and cut costs are wireless LANs, secure IP virtual
private networks (VPNs), multimedia e-learning, IP telephony, workforce optimization
applications, e-sales, e-support, and supply-chain management.
Wireless access points in every building enable Cisco employees to use e-mail
and other applications in nearly any location, while the Cisco Secure Access Control
Server (ACS) authenticates users and encrypts all transmissions. Cisco estimates that the
wireless LAN saves at least ten minutes per person per day in increased productivity due
to greater network availability. This time savings translates into a cost saving of $1,000
per employee per year.
Secure IP virtual private networks (VPN) allows remote access for telecommuters
and traveling employees, estimated to improve employee productivity by ten to forty
percent with accompanying cost savings. The high-speed remote-access solution allows
30
Waters, John K. John Chambers and the Cisco Way
21
productivity increases of one to two hours a day per employee. Plus the flexibility and
access to enabling tools lower help retain quality employees.
E-learning avoids costs and increases efficiency by reducing travel expenses,
decreasing resource requirements needed for partner training, cutting time requirements,
and saving printing costs by making content available online. Cisco depends upon three
methods of multimedia content: Cisco IP/TV® broadcasts, virtual classrooms, and videoon-demand modules. The implementation of these methods have reduced the time and
resource costs of training, allowing Cisco to offer more courses with the goal of creating
a more skilled workforce. By integrating e-communications into the culture of Cisco and
its partners, the company has saved millions of dollars.
In 2000, Cisco completed the largest deployment of IP telephony in industry
history. This led to lower equipment and infrastructure costs combined with easier
network management for a resulting decrease in the total cost of network ownership. By
replacing the former PBX equipment, Cisco also eliminated leasing and maintenance
expenses. In addition to reducing costs, IP phones increased productivity by allowing
employees to connect anywhere a spare jack was available. This reduced telephone costs
related to employee relocation from $150 per traditional phone to zero. This represented
significant cost savings of about $50,000 per month, because at any particular time
approximately 300 to 600 Cisco employees are changing office location.
IP-based workforce optimization applications increase employee efficiency in
performing routine administrative tasks and managing human resource functions. For
instance, a comprehensive, Web-enabled recruiting system has reduced the cost of
recruiting and hiring candidates by US$4,000 per hire. Another example is Cisco's Webbased expense reporting application, which reduced the average cost of processing an
expense report from $25 to $3, and allowed Cisco to avoid increasing headcount by ten
full-time employees. These and other measures have resulted in more than $34 million in
annual savings.
Individual departments at Cisco benefit strategically from specialized IP
applications. The e-sales portal, for example, streamlined the sales process and boosted
productivity by making pertinent sales data available in one location, freeing the
salespeople to spend twenty percent more time with customers or generating new leads.
The self-service approach provided by the Cisco Technical Assistance Center
(TAC) Web site addresses high-volume, low-complexity problems that allow customers
to help themselves. This significantly reduces the need for much costlier call center
support. In addition, software downloads and electronic orders significantly reduce
shipping and transaction costs, respectively.
Cisco automates the flow of supply chain information, providing a platform
available to all supply-chain partners for solution-based selling and collaborative problem
solving, and better performance from the supply chain as a whole. Handling more than
200,000 documents a day, the exchange also manages fourteen different early warning
alerts, ad hoc reporting, and analysis.
Through the utilization of its own IP technologies in the areas of customer care,
workforce optimization, supply-chain management, and e-learning, Cisco estimates that it
saved almost $2 billion for 2002 due to cost avoidance and increased time efficiencies.31
31
Raider, Rhonda, “Putting the IT in Productivity”, Cisco.com. 2002
22
D. Success Factor Profile
The Success Factor Profile can be used in three ways: to focus the initial planning
process of information systems upon competitive issues, to assess how new systems
are meeting competitive objectives, or to audit mature systems and ascertain whether
the dynamics of the competitive environment have shifted.
The success factors chosen vary upon the business in question and the factors
selected address the areas of competitive advantage, senior and information systems
management roles, current business strengths and needed improvements.
Culture
Culture is the value system and spirit of the organization. As a senior
management, value-driven factor it contributes key ingredients to competitive
strategy by emphasizing customer service and quality products or services. Strong
culture can be used to gain employee acceptance of new systems which can be critical
for competitive success.
Cisco’s CEO John Chambers continually emphasizes and works to reinforce the
company’s culture. He believes so strongly in the importance of culture that he
addresses it every time he appears before employees, and requires each manager to
spend a minimum of one minute per company meeting addressing culture. His
enthusiasm provides a driving force that keeps the culture strong and very much in
the minds of all employees. The badges that each employee carries clearly state that
all other facets of the Cisco culture lead to and support customer satisfaction.
According to Chambers, the four most important elements of Cisco’s culture are
customer success, quality team, empowerment, and stretch goals. Customer success
is by far the most important, and to achieve it the best possible team must be
assembled and then empowered. Quality team means recruiting the best people, those
who are talented, creative, results-oriented problem-solvers. Recruiting the best
people is also important because at Cisco empowers employees at lower management
levels to make decisions. The various business units own budget, production, and
technology decisions, and are knit into a cohesive strategy at the executive level.
This encourages entrepreneurial spirit and helps business strategy. A significant facet
of that business strategy involves stretch goals so far above the current level that they
can only be accomplished through creative change. Every Cisco executive has two
sets of goals each year: the original goals and stretch goals. Through this constant
striving and improvement, Chambers hopes that Cisco continues to build the culture
and confidence to do things differently. 32
Executive and Information Systems Management Partnership
For information systems to add competitive advantage to the business through
support of business strategy, an open dialogue and on-going working relationship
between the senior management and the information systems management is vital.
Senior management must believe in IS as a competitive resource, and encourage the
32
Slater, Robert. The Eye of the Storm. New York: HarperCollins 2003
23
establishment of this attitude throughout the company. Information Systems
management must understand the direction and priorities of the business because
these indicate how IS can best be used in support of business strategies.
John Chambers places great importance on the role of information systems at
Cisco. The company continually strives to be the best example of implementation
regarding the technologies it sells. This emphasis on integrating IS throughout the
business is evidenced by the distributed structure of many information systems
personnel into business units.
An understanding of the business is critical for effective utilization of a
company’s information technology, and CIO Brad Boston has a wealth of executive
experience to draw upon. At Cisco the Information Technology department, under
the direction of Boston, reports to the heart of the company: Customer Advocacy. By
having IT, Customer Service, and Product Design all report to one person, Cisco aims
for technical projects tightly matched with customer value. The head of the Customer
Advocacy department, Wim Elfrink reports directly to CEO John Chambers.
Linkage to Suppliers and/or Other Business Partners
The driving factor in establishing systems linking a company to its suppliers
and/or business partners is value and increased management of information along the
entire spectrum of the cooperative relationship. Cisco’s Manufacturing Connection
Online (MCO) includes a supplier portal and access to operational data used by
contract manufacturers. MCO increases process efficiency and the effectiveness of
results monitoring. The benefits derived from the supply-chain systems architecture
include higher productivity, more effective global inventory management, faster
problem resolution, and declining process costs. All of these factors add value and
increase customer satisfaction.33
Linkage to Customers
The primary question when businesses consider adding customer system is
whether increased information access can redefine product and service value. It is
possible for the delivery method to become as important as the products and services
through enhanced information content.
Cisco believes that to earn the loyalty of your most profitable customers while
expanding your market, you need to unify customer communication across all
functions.
Thus, the company has integrated information systems throughout its processes,
to increase efficiency and effectiveness, gain a competitive advantage, and add value
to customers.
33
Mello, Adrian. “Benefits of Supplier Portals” iQ Magazine Nov. 2002
24
Value to Customer Analysis
Cisco Systems Inc.
Telecom Network Equip.
• ERP System
•Cisco Connection Online
•Cisco Employee Connection
•New Product Intro. Systems
•Manufacturing Connection Online
Delivery Process
Product/Service
Value-add Process
• Increased Quality
• Better Service
•Convenience of online connection
What the Customer Buys
Value to Customer
Figure 10-2
Figure 13
Linkage to Customer Service
With fixing the problem as the main target, customer service systems are driven
by information value and accessibility. Three levels of implementation involve
increasingly complex technological solutions. The information system may be
primarily utilized by the company’s customer service personnel. Or the system may
be set up to enable customers to fix problems themselves. Or the vendor system may
be directly tied with the product for on-line diagnostics and sometimes even repair.
Cisco Systems aims to take the second approach and enable customers to help
themselves as much as possible, for greater customer convenience and satisfaction,
and company cost savings. A good example is Cisco Connection Online, a Webenabled system for online sales, service, and procurement introduced in 1994. CCO
has grown to be the company’s primary marketing channel with more than thirty-nine
percent of orders. Addressing the areas of commerce, manufacturing, interactive
marketing, and service/support the system has produced a twelve percent productivity
gain and more than $330 million annually in savings.
25
Section IV: Final Analysis
A. Success of Business Strategy and IT Use to Date
The ability and willingness of Cisco Systems Inc. to reinvent itself not only in
times of crisis, but on a continual basis in pursuit of growth and new opportunities is
breathtaking. CEO John Chambers provides vision, enthusiasm, and shapes the
global company into a cohesive whole through frequent communication and an
emphasis upon culture. The impressive speed with which the company executes to
position itself for market transitions has been highly beneficial in capturing market
share and establishing positions in emerging market segments. The importance of
creating their own best example within the company itself casts information systems
into a critical role as a competitive enabler of Cisco’s business strategy. Both
internally and externally, Cisco strives to implement information systems to provide
more information in an increasingly timely manner to add value and increase
efficiency, effectiveness, and competitive advantage. The company has a major
information system for each player in its value chain: suppliers, partners, and
customers. The company has grown phenomenally over the last decade, both due to
market expansion and its acquisitions strategy. Not content to rest upon success, a
healthy paranoia pervades its quest for continual improvement. Some would say that
Cisco’s success was merely a case of selling the right technology at the right time.
While the helpfulness of market conditions cannot be denied, Cisco has proven itself
to possess more than just luck. Even with the market downturn of the last couple
years, Cisco quickly evaluated the changes necessary and restructured the company
accordingly.
B. Have the Above Factors Positioned Cisco for the Future?
Reflecting investor optimism, the Bloomberg U.S. Telecommunications Index,
which includes Cisco and Nortel Networks, rose nearly thirteen percent in January alone.
This increase followed a fifty-two percent climb during 2003. Analysts predict improved
market conditions for companies in the Telecommunications Network Equipment
Industry during 2004. Money will flow to newer technologies such as wireless and Voice
over Internet Protocol and the companies that sell products that make use of them,
analysts said. 34
With its healthy cash flow and established presence in both the wireless and VoIP
technologies, Cisco Systems is poised to take advantage of the coming upturn. Leaner
and warier than before, this global giant is on-guard against the overconfidence that
tripped it before and emphasizing customer communication more than ever.
34
Cox, Jonathon B. “Walking Out of the Basement”. NewsObserver. Jan. 18, 2004
26
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http://newsobserver.com/business/story/3241959p-2898910c.html
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14. “William Elfrink” Executive Management Team
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was key to success now relies on growing its own stars. Not everyone is convinced the
strategy will keep Cisco on top.” Workforce , March 2003
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28
3 Best Sources for Cisco Research
1. Raider, Rhonda, “Putting the IT in Productivity”, Cisco.com. 2002
http://www.cisco.com/en/US/about/ac123/ac114/ac173/ac205/about_cisco
_packet_netizen09186a00801014f7.html
This article was invaluable in describing the internal implementation of
information technology at Cisco. It provided functional detail, while also
including the benefits and importance of each technology.
2. Slater, Robert. The Eye of the Storm. New York: HarperCollins 2003
This book was extremely helpful for gaining an overall sense of Cisco as a
company, particularly in the last five years. It also included background
information of the time period when Cisco was established as a company and
dealt with the formative influence which many key people had upon the
shaping of Cisco’s culture into the strong resource the company draws upon
today.
3. “Cisco IT Financial Management Approach”, CiscoExpo Belgrade 2002
Opening and Keynote
http://internet.fon.bg.ac.yu/download/cisco/Poslovna%20Primena/CiscoITFin
ancialManagementApproach.pdf
This slide collection provided a wonderful overview of the role of
information technology as a business strategy enabler at Cisco. It focused on
the Customer Funded Project model as an important transition point in the
way IT was viewed and used at Cisco.
29