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Case study of making IT a strategic business partner
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17028_01_2003_c3_Bostrom © 2003, Cisco Systems, Inc. All rights reserved.
Strategic Business Partnership
Ayelet Baron
WW Sales Strategy & Planning
March 2003
2© 2003, Cisco Systems, Inc. All rights reserved.
Agenda
Case Studies
Strategies For Success
Q&A
About Cisco
Becoming A Strategic Partner
37028_01_2003_c3_Bostrom © 2003, Cisco Systems, Inc. All rights reserved.
About CiscoAbout Cisco
4© 2003, Cisco Systems, Inc. All rights reserved.
History of Cisco Systems
Started at Stanford
IPO; 192 Employees
End-to-End Solutions Provider
Cisco Routers Power the Internet; LAN/WAN Switching, Remote Access
#1 Communications Equipment Supplier
Shipped First Router
$18.9 Billion Revenue; 34,000 Employees; IP Telephony, Security, Wireless, Networked Home
1998199819841984 19861986 19901990 19941994 20022002 20032003
5© 2003, Cisco Systems, Inc. All rights reserved.
Cisco Products
• Industry’s broadest product line
• Leadership products in each category
• R&D = 16.9% of revenue
• Enables end-to-end network services
6© 2003, Cisco Systems, Inc. All rights reserved.
Cisco Audience
Presentation_ID © 2001, Cisco Systems, Inc. All rights reserved. 66Updated 01/04
• 33,000+ employees in 68 countries
• Average years of service 4.5• 1/3 Engineering/IT, 1/3 Sales,
1/3 all others• All connected to common
Internet tools• Most are Cisco shareholders
• 33,000+ employees in 68 countries
• Average years of service 4.5• 1/3 Engineering/IT, 1/3 Sales,
1/3 all others• All connected to common
Internet tools• Most are Cisco shareholders
7© 2003, Cisco Systems, Inc. All rights reserved.
Foundational Principles
Profit Contribution
Profit Contribution
Mar
ket T
ransi
tions
Mar
ket T
ransi
tions
Open Communication
Open Communication
EmpowermentEmpowerment
Trust/Fair/Integrity/Giving BackTrust/Fair/Integrity/Giving Back
TeamworkTeamwork
Driv
e C
hang
e
Driv
e C
hang
e
Fun
Fun
8© 2003, Cisco Systems, Inc. All rights reserved.
CEC: Cisco Culture and Business Ownership
Cisco University
The New Cisco Employee Connection (CEC) – worlds coming together:Content, Tools, Communication and Technology
9© 2003, Cisco Systems, Inc. All rights reserved.
Executive Communication – Senior Leaders Are Seen and Heard
• Integrated media:
IP/TV, Video on demand, email, portal support sites
• Consistent Message• Candid, Personal, &
Open Communication• Posted Q&As• Benefit: Speeds
Alignment & Results
Video on Demand
10© 2003, Cisco Systems, Inc. All rights reserved.
Global Communication Portals Inform All Employees
• Consistent messaging to all employees
• Customized, geographical content
• Global self-authoring tools and standards
• Geography-based dashboards
11© 2003, Cisco Systems, Inc. All rights reserved.
Benefit:Ensures access to information for each role and function
Multiple Role-based Portals for Varying Audience Needs
• Executive Dashboard
• Managers Dashboard
• Director and VP site for special programs
• New Hire site
• Organization-specific sites
12© 2003, Cisco Systems, Inc. All rights reserved.
Key Cisco Frameworks
121212© 2003 Cisco Systems, Inc. All rights reserved.
13© 2003, Cisco Systems, Inc. All rights reserved.
“I’m never having kids. I hear they take nine months to download.”
14© 2003, Cisco Systems, Inc. All rights reserved.
Cisco’s Financial Benefit from IT
FY ’95 FY ’03FY ’96 FY ’97 FY ’98 FY ’99 FY ’00 FY ’01 FY ’02
• Communications• Internal Directory• External Web Site• Support Self-Service
• Communications• Internal Directory• External Web Site• Support Self-Service
$1B$1B
DepartmentalDepartmental
$3B$3B• Virtual Supply Chain• Online Collaborative
Support• E-Treasury
• Virtual Supply Chain• Online Collaborative
Support• E-Treasury
$1.9B
$2.1B
$1.7B
Inter-EnterpriseInter-Enterprise
$2B$2B
• E-Commerce• E-Procurement • E-Learning• E-HR• Virtual Close
• E-Commerce• E-Procurement • E-Learning• E-HR• Virtual Close
$900M
EnterpriseEnterprise
Financial Impact
15© 2003, Cisco Systems, Inc. All rights reserved.
Core Context
MissionCriticalMissionCritical
Non-MissionCritical
Non-MissionCritical
Core and Context
Contributes Directly
to Competitive Advantage
Contributes Directly
to Competitive Advantage
Required to run the
business and fulfill
commitments
Required to run the
business and fulfill
commitments
Shortfall risks company's operations
Shortfall risks company's operations
15© 2004 Cisco Systems, Inc. All rights reserved.
16© 2003, Cisco Systems, Inc. All rights reserved.
Out-Tasking Versus Out-Sourcing
• A whole function (IT)
• Manage contract and SLAs
• Separate IT Systems with reporting
• Process redesign requires contract renegotiation
• A whole function (IT)
• Manage contract and SLAs
• Separate IT Systems with reporting
• Process redesign requires contract renegotiation
• Elements of a function
• Real time visibility and active management
• Shared systems/web services; common data, network standards
• Allows process redesign andcontinuous innovation
• Elements of a function
• Real time visibility and active management
• Shared systems/web services; common data, network standards
• Allows process redesign andcontinuous innovation 16© 2004 Cisco Systems, Inc. All rights reserved.
17© 2003, Cisco Systems, Inc. All rights reserved.
Investment and Partnering Strategy
Core Context
MissionCriticalMissionCritical
Non-MissionCritical
Non-MissionCritical
InvestInvest
Retain In-houseRetain In-house
Drive ProductivityDrive Productivity
Strategic Partners (Few, Tightly Coupled)
Strategic Partners (Few, Tightly Coupled)
Focused InvestmentFocused Investment
Specialist PartnersSpecialist Partners
Control CostsControl Costs
Vendor Management(SLAs Driven)
Vendor Management(SLAs Driven)
17© 2004 Cisco Systems, Inc. All rights reserved.
18© 2003, Cisco Systems, Inc. All rights reserved.
Relative Cisco Functional Out-Tasking
ManufacturingManufacturing
SalesSales
ITIT
CustomerService
CustomerService
HR HR
Finance Finance
% Out-Tasked% Out-Tasked
• Inside sales Inside sales • AdvertisingAdvertising• Lead qualificationLead qualification
• Payroll processing• Travel• Investment Management
• Payroll processing• Travel• Investment Management
• Temp contracting• Benefits admin• Global mobility
• Temp contracting• Benefits admin• Global mobility
• Desktop mgmt• Remote office WAN • E-commerce apps
• Desktop mgmt• Remote office WAN • E-commerce apps
• Board manufacturing • Final assembly & test • Logistics & delivery
• Board manufacturing • Final assembly & test • Logistics & delivery
• Level 1 help desk• Order admin• Field logistics & repair
• Level 1 help desk• Order admin• Field logistics & repair
18© 2004 Cisco Systems, Inc. All rights reserved.8712_09_2003
19© 2003, Cisco Systems, Inc. All rights reserved.
Becoming A Valued Partner Becoming A Valued Partner
20© 2003, Cisco Systems, Inc. All rights reserved.
What is A Strategic Business Partner?
BusinessAlignmentBusinessAlignment
StrategyStrategy
ProcessProcess Change Agent
Change Agent
TrustedAdvisorTrustedAdvisor
ProductivityProductivity
Customer,Customer,EmployeeEmployee
andandShareholderShareholder
ValueValue
21© 2003, Cisco Systems, Inc. All rights reserved.
Necessary Transition
Order TakerOrder Taker
• Respond to requests
• Fire fighting role
• Not invited to the strategic discussions
• Responsible for tools and vehicles
• Focus on achievement of function objectives
• Respond to requests
• Fire fighting role
• Not invited to the strategic discussions
• Responsible for tools and vehicles
• Focus on achievement of function objectives
Trusted AdvisorTrusted Advisor
• High business impact
• Viewed as a partner in success or failure—skin in the game
• Data-driven
• Leverages process
• Risk taker
• Provides business solutions
• High business impact
• Viewed as a partner in success or failure—skin in the game
• Data-driven
• Leverages process
• Risk taker
• Provides business solutions
Change AgentLanguage
RelationshipsBusiness Impact
Change AgentLanguage
RelationshipsBusiness Impact
© 2003, Cisco Systems, Inc. All rights reserved.
22© 2003, Cisco Systems, Inc. All rights reserved.
Roadmap
Set It up Right
Set It up Right
Prove the Value
Prove the Value
Get InvitedGet Invited
Create the vision, determine the approach and get the right people on board
Create the vision, determine the approach and get the right people on board
Show success through bottom line results
Show success through bottom line results
Be there when the strategy & initiatives are decided and scoped
Be there when the strategy & initiatives are decided and scoped
Change the Way You WorkChange the Way You Work
• Gradually educate and communicate across various levels of the organization
• Create business metrics, targets and incentives to achieve desired results
• Gradually educate and communicate across various levels of the organization
• Create business metrics, targets and incentives to achieve desired results© 2003, Cisco Systems, Inc. All rights reserved.
237028_01_2003_c3_Bostrom © 2003, Cisco Systems, Inc. All rights reserved.
Case Study #1Collaborative Problem Resolution
Case Study #1Collaborative Problem Resolution
24© 2003, Cisco Systems, Inc. All rights reserved.
Business Problem
Inconsistent global methodology to identify, prioritize and address complex business problems resulting in inefficiency, productivity loss and lack of cross-functional teaming, and issues not getting resolved
Our Opportunity: Having the methodology in place to solve complex, cross functional
business issues in a short window of time
© 2003, Cisco Systems, Inc. All rights reserved.
25© 2003, Cisco Systems, Inc. All rights reserved.
WW CPR Team
• Committed Business Sponsors (3)
• Cross-functional representation
• Global team
• Directors/Senior Managers
• Experimented with the methodology, while creating it
• Piloted in APAC
© 2003, Cisco Systems, Inc. All rights reserved.
26© 2003, Cisco Systems, Inc. All rights reserved.
What is the Collaborative Problem Resolution (CPR) Process?
• Collaborative Problem Resolution (CPR) is a problem-solving methodology, enabling business leaders to address complex, business challenges quickly
• It produces better and faster business decisions by:• Focusing on tangible business results, including productivity
and profitability• Engaging sponsors who are committed to action• Identifying the right people—geographically and organizationally• Eliminating redundancy by focusing on prioritized issues
• Develop breadth and depth of leadership
• Collaborative Problem Resolution (CPR) is a problem-solving methodology, enabling business leaders to address complex, business challenges quickly
• It produces better and faster business decisions by:• Focusing on tangible business results, including productivity
and profitability• Engaging sponsors who are committed to action• Identifying the right people—geographically and organizationally• Eliminating redundancy by focusing on prioritized issues
• Develop breadth and depth of leadership
© 2003, Cisco Systems, Inc. All rights reserved.
27© 2003, Cisco Systems, Inc. All rights reserved.
Key Elements of CPRThe 4P’s
PlatformPlatformProblemProblem
ProcessProcessPeoplePeople
28© 2003, Cisco Systems, Inc. All rights reserved.
Key Components of CPR
Identifying the Right Problems to Focus on the Highest Prioritized Business Challenges
• Business issue is identified as one of the top 5 for WW Sales, the Theatre, Country or area with a committed sponsor
• Project has the highest business impact for Cisco
• Participants bring some domain expertise with an understanding of the business challenge and possible
solutions• Participants are passionate about addressing the issue• Participants are stretched by the project• SLDP participants and other high potentials• Small core team for each project – process should allow
flexibility for different team sizes• Executive sponsor (for active guidance; roadblocks; VP+ level)• Business partner (for day-to-day engagement; Dir+ level)• Extended team to include functional analytical support
Getting the Right People Organized in the Right Way is Key
© 2003, Cisco Systems, Inc. All rights reserved.
29© 2003, Cisco Systems, Inc. All rights reserved.
Key Strategic Drivers
Results and People Should Be Showcased at the Right PlatformsGlobal Platforms• SVP Quarterly Staff meetings• Business Sector Councils• Executive councils• Chambers’ senior staffTheatre Platforms• Theatre Staff Meetings• Theatre Ops Reviews
• Creating a global and local governance process• Prioritizing and tracking the top business issues and their
resolution• Using a consistent framework and methodology to identify and
resolve business issues• Integrating the process in how we do business at Cisco
Getting the Right Process in Place that Can Be Leveraged and Scaled Globally is Critical
© 2003, Cisco Systems, Inc. All rights reserved.
30© 2003, Cisco Systems, Inc. All rights reserved.
CPR Benefits
© 2003, Cisco Systems, Inc. All rights reserved.
• CPR Enables Teams to Focus on the Most Important Issues identified with executive involvement
• Ensures engagement and commitment from executive management
• Provides a showcase opportunity
• CPR Clears the Path for Complex Problem Resolution
• CPR tools—structured brainstorming, idea prioritization and action plan development—are ideal for making improvements
• Deploying CPR teams on these problems saves time by identifying the systemic problems requiring resolution
• CPR Leverages Internal Cross-functional Knowledge
• CPR taps into our internal knowledge by having cross-functional representation on key issues
• CPR teams provide the ideal vehicle for engaging those who must live with the solution through ownership and accountability for results. Nothing cuts through resistance to change faster than results
• CPR engages Leaders to Build Improvement Priorities
• CPR helps align leadership teams on priorities for decision-making and execution
• CPR should help sort out the "mountain vs. foothills" opportunities before resources are committed
31© 2003, Cisco Systems, Inc. All rights reserved.
1. Relevant? Top 5?
2. Incremental value-add to audience?
3. Focused?
4. Quantifiable results?
5. Not duplicative?
6. Crisp Recommendations?
7. Implemented for FY04?
8. Do-it, or clean hand-off?
Business Problem Checklist
© 2003, Cisco Systems, Inc. All rights reserved.
32© 2003, Cisco Systems, Inc. All rights reserved.
Case Study #2 Cisco IT
Case Study #2 Cisco IT
33© 2003, Cisco Systems, Inc. All rights reserved.
Cisco’s IT Evolution
IT as Cost Center
CFP& ERP
Internet Enabler
Outcome Defined
Trusted Business Partner
Value Creation
Proactive
Reactive
200019971993-951991
IT Supports Business Strategy IT Enables New Capabilities and Roles
BusinessValue
• IT worksindependentlyof business
• Seeing as nonvalue adding
• IT seen as “high” cost
• Focus on technical performance
• Supports businessstrategy
• IT seen as a support process
• Focus on Returnon Investment
• Supports andenhancesbusiness strategy
• IT seen as a critical process
• Focus on cycle time, cost reduction, service quality
• Enables business strategy and integral part of the business
• Effective use and leverage of technology and “virtual” resources
• Focus on Shareholder value
34© 2003, Cisco Systems, Inc. All rights reserved.
Business Challenge
From: A service delivery organization…
To: A Consultative Business Partner offering:
• Strategic Solutions
• A Catalyst for Change
• Technology Leadership
• Breakthrough Productivity
35© 2003, Cisco Systems, Inc. All rights reserved.
Change Management Framework
DESIREDSTATE
SPONSORCOMMITMENT
SKILLS
CULTURALALIGNMENT
RESISTANCE
PAIN
CO
MM
ITM
EN
T
TIME
SYNERGISTICRELATIONSHIP
REMEDY
PLAN
TRANSITION RISK AREAS
Frame of Reference
PRESENTSTATE
36© 2003, Cisco Systems, Inc. All rights reserved.
IT Strategic Plan
• Taking Partnerships to New Heights
• The Way We Work
• Taking Partnerships to New Heights
• The Way We Work
• Leading Internet Capabilities
• Ongoing Assessments• Cascading Workshops• Ongoing Engagement
• Leading Internet Capabilities
• Ongoing Assessments• Cascading Workshops• Ongoing Engagement
• Internal Communication Capability• Cross-functional Team: IT & Business• Online solutions: IT & Cisco• Ongoing Communication
• Internal Communication Capability• Cross-functional Team: IT & Business• Online solutions: IT & Cisco• Ongoing Communication
• IT Senior Staff• Internal Clients• IT: 75 Interviews Worldwide• Strategic Off-site
• IT Senior Staff• Internal Clients• IT: 75 Interviews Worldwide• Strategic Off-site
StagesStages
TransformTransform
ImplementImplement
Plan & EngagePlan & Engage
AssessAssess
19991999
20022002
Fo
cus
& In
vest
men
tF
ocu
s &
Inve
stm
ent
20002000
37© 2003, Cisco Systems, Inc. All rights reserved.
Client Feedback IT Performance vs. Business Need
4.5
4.2
4.3
4.5
4.5
4.3
3.5
3.4
3.2
3.8
3.6
3.5
0 1 2 3 4 5
Knowledge and understanding of yourbusiness & related goals
Understand leading cross-industry bestpractices
Represent business issues and solutionsacross all functions
Sustainable competitive advantage
Create Shareholder Value
Work as a virtual organization with no time,distance and functional boundaries
IT Effectiveness
Business Criticality
0.8
0.9
0.7
1.1
0.8
1.0
Example
38© 2003, Cisco Systems, Inc. All rights reserved.
Change Readiness Assessment—InternalKey Risk Areas
• Strong belief that IT senior staff supports the changes we need to make
• Some concern about IT senior staff sharing common goal around Business Partnership
• Caution around leadership by example - walking the talk
• Management has a history of losing focus on important projects when other problems or issues compete for its attention
• Failure to involve middle managers in planning change has resulted in their indifference and opposition to initiatives
• Managers in past changes said they supported a change but their behavior often suggested the opposite
• Employees understanding of how Cisco’s business goals translate into specific things they can do in their jobs
• In deciding to support a change, people do what they think will please their boss rather than what is best for Cisco
• There will be some difficulty in explaining BP to employees
• Communication in IT is open and candid • IT’s usage of rewards, measurement and other
processes to communicate its seriousness and signal a change
• A compelling reason to change has not been clearly communicated
• Employees will not easily understand the costs associated with not implementing BP
• Employees expect change to happen at Cisco• Employees will not be motivated to achieve
Business Partnership • Employees will need to be invested in the new
way of operating • Employees will not feel a sense of control in
implementing Business Partnership• BP will be regarded as requiring employees to
make substantial changes to their own day-to-day activities
• Employees do not have the assimilation capacity for Business Partnership
• IT Senior Staff has the skills and abilities to execute and deliver Business Partnership
• Managers already possess Business Partnership skills
• Employees already possess Business Partnership skills
• Employees have the skills and abilities they need to accomplish this change
SPONSORSHIP
RESISITANCE
COMMUNICATION
SKILLS
39© 2003, Cisco Systems, Inc. All rights reserved.
Internal AssessmentRisk Area: Sponsorship
0% 20% 40% 60% 80% 100%
Has a history oflosing focus
Shares commongoal
Walks the talk
Supports thechange
Low
Medium
High
IT Senior Staff ...IT Senior Staff ...
0% 20% 40% 60% 80% 100%
Total
Employees
PMs
Managers
Direct Reports
Sr. Staff
Low
Medium
High
IT Senior Staff Supports This Change...IT Senior Staff Supports This Change...
Example
40© 2003, Cisco Systems, Inc. All rights reserved.
Behavior ChangeCommitment
AwarenessAwarenessUnderstandingUnderstanding
TranslationTranslation
CommitmentCommitment
InternalizationInternalization
41© 2003, Cisco Systems, Inc. All rights reserved.
IT Connection IT e-Communities IT Client Portal Best Practice Website Meetings & Off-sites Chats with CIO Manager Weekly e-alert Meeting-in-a-Box
IT Connection IT e-Communities IT Client Portal Best Practice Website Meetings & Off-sites Chats with CIO Manager Weekly e-alert Meeting-in-a-Box
Client Feedback MBO Alignment Quarterly IT Business
Partnership Award IT Champion Award
Performance Reviews CAP Awards Training Program IT Communication
Function Centralized company-wide
Client Feedback MBO Alignment Quarterly IT Business
Partnership Award IT Champion Award
Performance Reviews CAP Awards Training Program IT Communication
Function Centralized company-wide
Training for Sr. Staff Delivery of BP Workshops Quarterly IT All-Hands/IPTV Sr. Staff Meetings Management Staff Meetings Chats with CIO CIO Corner IT Connection Sr. Staff Forums BP Team
Training for Sr. Staff Delivery of BP Workshops Quarterly IT All-Hands/IPTV Sr. Staff Meetings Management Staff Meetings Chats with CIO CIO Corner IT Connection Sr. Staff Forums BP Team
Communication Plan
SYSTEMS/PROCESSES MEDIALEADERSHIP
42© 2003, Cisco Systems, Inc. All rights reserved.
IT Connection Mission
IT Connection will become the number one business communication tool in supporting IT through knowledge sharing and innovative methods of increased productivity across geographic boundaries, creating a collaborative environment of informed and interdependent IT employees
42
43© 2003, Cisco Systems, Inc. All rights reserved.
IT ConnectionRoadmapIT ConnectionRoadmap
Leadership
IT Senior Staff engagement in
e-business efforts in IT
IT Portal becomes an every day mindset/expectation—how we work
Technology
Flexible application and data architecture for quick delivery
Scalable infrastructure
Portal software
Integration of disparate DBs
Governance
Clear MBOs/metrics that drive execution
Dedicated resources
Identify overlap
Competency
Ruthless execution on “quick hits”
Globalization of e-business solutions and team
Speed and agility in opportunity
44© 2003, Cisco Systems, Inc. All rights reserved.
Collaborating Across IT
45© 2003, Cisco Systems, Inc. All rights reserved.
46© 2003, Cisco Systems, Inc. All rights reserved.
Client Satisfaction
69%
19%
9% 2%
78%
12%4% 2%
0%
20%
40%
60%
80%
2000 2001
Satisfied Neutral Dissatisfied DK/Don't use
Mean 4.2Mean 4.2Mean 3.8Mean 3.8
47© 2003, Cisco Systems, Inc. All rights reserved.
Success StrategiesSuccess Strategies
48© 2003, Cisco Systems, Inc. All rights reserved.
Partnership Model
• Situation analysis/Change Readiness Assessment
• Gap analysis
• Global team
• Identify quick wins
• Leadership buy-in
• Define sponsor roles
• Strategic direction
• Benefit analysis
• Best practice sharing—integrate
• Change management &communication plan
• Establish metrics
• Get buy-in
• Set up teams
• Deliver plan
• Identify new needs
• Monitor results
• Assess business results
• Integrate and leverage
Sponsorship & Communication
Where are we now?
Where do we want to be?
How will we get there?
Who must do what?
How are we doing?
49© 2003, Cisco Systems, Inc. All rights reserved.
Engagement Model
Ensure Successful
Implementation
Ensure Successful
Implementation
Assess Business Needs &
Gaps
Assess Business Needs &
Gaps
Identify key Initiatives
Identify key Initiatives
Leverage ResourcesLeverage
Resources
Create Actionable
Game Plans
Create Actionable
Game Plans
Business Partnership is a relationship of
mutual trust and influence built on shared ownership
of and complementary contributions to business results
50© 2003, Cisco Systems, Inc. All rights reserved.
The New Agenda
Create value-added business change – not simply support how we do business
View your clients as the business and the customers—how do we help make them more effective?
The outcome of communication is more aligned strategy and business results
Communication is not just another support organization that takes orders—it has earned the right to be a key driver of the business
Create value-added business change – not simply support how we do business
View your clients as the business and the customers—how do we help make them more effective?
The outcome of communication is more aligned strategy and business results
Communication is not just another support organization that takes orders—it has earned the right to be a key driver of the business
51© 2003, Cisco Systems, Inc. All rights reserved.
Questions to Consider
If your team were freed from what you are doing now,what could you do to align and
increase your impact on the business?
52© 2003, Cisco Systems, Inc. All rights reserved.
Questions to Consider
What does your team do todaythat you would be willing to
surrender,provided you were assured
the work would be handled correctly?
53© 2003, Cisco Systems, Inc. All rights reserved.
FY’04
“… chance favors only the prepared mind.”—Louis Pasteur
FY’05
FY’06
FY’07
54© 2003, Cisco Systems, Inc. All rights reserved.
Q and A
545454© 2003 Cisco Systems, Inc. All rights reserved.Presentation_ID