Aimee Fuller and Mark Bonfoey - Cisco · © 2010 Cisco and/or its affiliates. All rights reserved. 1Cisco Confidential Aimee Fuller and Mark Bonfoey Distributor Update Cisco LSS/CE

© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1

Aimee Fuller and Mark Bonfoey

Distributor Update

Cisco LSS/CE Brazil

April 2013

© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 2 © 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 2

Continued Engagement – Gaining your Insights

Discussion

New Cisco in Brazil

Cisco Confidential © 2010 Cisco and/or its affiliates. All rights reserved. 3


Our goal is to:

• Inform you of changes and gain feedback, ideas and support

• Determine impacts and/or potential updates to scope, processes, timeline

• Create scalable and meaningful pre- and post go-live support

• Ultimately shape and support mutual business expansion and success

• Discuss expanded approach (including automation) plus added product set

• Executive Distributor/Partner Forums

• 1-on-1

• Quarterly Updates

How We Achieve Our Goals


Enable

• Contracts

• Processes

• Pre- & Post Enablement Support

• Follow-up

Gain Insight

• Assess Impacts

• Business Processes

• Gather Feedback

Engage

• Benefits of Country Enablement

• Inform, Listen, Adjust, Educate, Execute and Support

PARTNER & DISTRIBUTOR

CONFIDENCE

Minimum Disruption

Coordinated Planning

Timely Communication

BUSINESS CONTINUITY


Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-13

Pa

rtn

er

& D

istr

ibu

tor

En

ga

ge

me

nt

Sw

itc

he

s

Brazil on LSS Bundle 1

Awareness Communication

and Invitations for Executive

Sessions

Exec Sessions and Partner/Disti

1:1s

Partner/Disti Survey

Executive Update

Go-Live Prep Communication

Go Live Update

Optional Training

FAQs

Partner/Disti Summit

Gain Insight Engage

Enable

WS-C2960S-48LPS-BR

(October 14th)

WS-C2960-24TC-BR

(June 17th)

WS-C2960-24PC-BR

(August 19th)

Communication Meeting

Partner/Disti Handbook

Partner/Disti Confidence Survey

Executive Update

Ongoing 1:1s


Why We Are Doing This

• Creating a future buy/sell entity

• Creating full local subsidiary capabilities

• Increasing local manufacturing for more competitive pricing

Potential Challenge

• Interim – parallel ordering requirements

• Additional training requirements

Benefits to Customers, Partners and Distributors

• New business models

• Increased satisfaction levels and ease of doing business

• Reduced cycle times



Local

Mfg

Intellectual

Property

Agreements

Innovation

Center

With World Cup And Olympics, Cisco Bets Big On Brazil - Forbes So urce: forbes.com

Image via Cisco Cisco is betting big on Brazil. With the 2014

World Cup and the 2016 Olympic Summer Games coming to Brazil, US-based Cisco is investing $545 million over the next

four years. According to one report, Cisco plans to capitalize on the global attention on the world soccer championships and

the [...]

Cisco Investment Package

Announced: April, 2012


Transforming the order to fulfillment processes and

systems by:

• Protecting and growing your market share

• Improving Ease of Doing Business for you and your

customers • Enhance “no touch” customer experience

• Increasing efficiencies • Speed acquisition integration

• Improve reporting functionality

• Accelerating time to market

• Providing greater scalability


Enhanced

Route to

Market

for

Channels

in Brazil: LSS Bundle 1/

Country

Enablement

Strategic Manufacturing Node

Routers &

Switches,

WAP UCS

IP

Phones STB /

EMTA

Improved lead

times

For local Mfg

products


• Product +TS for locally mfg products

• Stand-alone TS local and imported products

• Advance Services (AS-S, AS-T, AS-F)

• Service Sales to support SW

• XaaS (Increased automation – TBD)

Legal Contracts,

BRL Pricing

T&C’s, Customer

PO, SO

Cisco

Brazil

Selling only Product locally in country

-50% of all Cisco products

Locally

Manufactured

Product

• Product +TS for imported products

• Standalone Software Sales (SW)

• SW Subscription Sales **

Legal Contracts,

USD Pricing

T&C’s, Customer

PO, SO

Channels continues to import from Inc and resell to

customers for all products not manufactured in

country Non-locally

manufactured

Product

Cisco

Inc

subsidiary

Order

(Manually

split)

** SW Subscription doesn’t have separate service SKUs (i.e. there are not separate services sold to support software subscription sales).


Both locally and

non-locally

manufactured

products

Selling both Product manufactured

locally in country as well as those

imported from out of country

Order


1-Tier

Partner

End user

INC.

1-Tier

Partner

End user

CE Brazil

Distributor

As-is with Importation

As-is Local Manufacturing Manual

R$

$

R$ R$

To-be with Importation (no change)

To-be Local Manufacturing Automated

1-Tier

Partner

End user

INC.

$

End user

CE Brazil Type

5 Entity*

R$

*CISCO COMÉRCIO E SERVIÇOS DE HARDWARE

E SOFTWARE DO BRASIL LTDA

Services attached

to standard Cisco

products will

continue to be

purchased through

Cisco Inc

Ability to purchase

through the local

entity:

• Products

purchased thru

Distribution or 1-

tier

• Locally

manufactured

products and

attached

services

• Both local and

non-local stand-

alone services

1-Tier

Partner

$

R$

$



Minimize Disruption

• Specific to q2 changes next year (1 Tier purchasing opens up), how can we minimize the disruption or address concerns?

Coordinated planning

• For the new products in the portfolio & the expanded route to market, what elements do we need to pay particular attention to?

• What is your overall impression of collaborative planning?

• What could we do together to accelerate and address any concerns?

Communication, Training & Overall Readiness

• Where do you need added support in these areas?

• What is the single biggest inhibitor to ensuring your readiness and how can we help mitigate any concern?

What is your overall confidence?


• What would be the preferred process for creating deals, quotes, and

submitting orders given the dual approach?

• What are the impacts to your internal systems/processes to break up the

placement of orders based on Brazil Price List vs.. Global Price List? This

would include quoting, ordering and invoicing.

• As orders will now have both US$ and Brazilian Reais, what challenges will

this create for you in quoting to end customers? What other challenges will

this create? What support would you expect from Cisco to resolve these

challenges?

• What could we do to improve the process for you?

• Will this model impact your willingness to do business with Cisco?


• Does the need to have a Bill To address in Brazil create challenges to your

existing business?

• Any unique Global deal impacts?

• What challenges created by potential lead times differences as well as stock

locations from Cisco Inc vs.. Cisco Brazil?

• What support do you expect from Cisco to minimize this impact?

• How can we ease the process of signing the sales agreement with Cisco

Brazil for you? What kind of support / documentation will you need and how

much lead time would you expect?

• What would you require to support an electronic “click to accept” of a new

Internet Commerce Agreement? (or legal agreement)?

• Any other issues or concerns about this new model on your ability to sell and

deliver product to your end customers?


• What challenges do you expect for your business because of the

need to have contracts with both entities and how can we support

you?

• Do the Service contract start dates match the Purchase Order

submission dates? Are the invoices being sent in the same calendar

month as the service contract start dates?

• What process is used by the Partners for receiving returns from their

customers in Brazil?

• Service contract splitting. Service contracts with sites in Brazil and

outside of Brazil will need to be split going forward (This will mean

more service contracts).

• Any other issues or concerns about this new model on your ability to

sell and deliver Services?


• What are the implications to your B2B ordering processes?

• Will you need this capability Day 1 for purchases through CE Brazil ?

• Do you foresee any additional integration / migration work we have to

prepare for on B2B? What lead times should we plan for?

• What are your lead times needed to make the changes and what constraints

will this model create for your tools?

• Are there any issues around signing new ICA agreements, do you require

any advance information outside of the actual new agreement 60 days prior

to go live?

• Are there any communications templates/materials that would be beneficial

from us to support the change experience/expectations to your customers

with this dual model?

• Any other issues, concerns or opportunities for this new model on your

ability to sell we should be aware in relation to B2B?


Review 1-Tier Questions

Q. Will Partners have a secondary credit line for local manufactured products? If not, how do we control it considering that today confusion persists when placing orders with different credit lines.

A. 1-Tier Partners will maintain their credit line as is with Cisco Inc. for purchases through Cisco Inc. Purchase of locally manufactured goods will be through the local Distributors. Credit lines with the Distributors will be dependent upon the agreement between the 1-Tier Partner and the Distributor, as is done today.

Q. If it is through Distribution, who will provide credit lines? What interest rates should we expect?

A. Credit lines and interest rates provided through the local Distributors, will be dependent upon the agreement between the 1-Tier Partner and the Distributor.


Q. Cisco informs that the lead time for locally manufactured goods will be three weeks -will this lead time be guaranteed for high volume sales? Are there specific steps required for high volume orders?

A. In order to take advantage of the shorter lead time for high volume orders, the Cisco Sales Team will meet monthly with each Distributor to effectively plan the forecast.

Q. Does the Partner have to have two discount approval paths?

A. Yes. Locally manufactured and Cisco Inc. products will be addressed as separate opportunities. There will be one deal for Cisco Inc. products, and one deal for locally manufactured products.

Review 1-Tier Questions cont.


Q. What will be the RMA process for locally manufactured goods? Through the Distributor?

A. All early life hardware failures will be supported by the Distributor. The Distributor will accept the defective unit back from the end user and will provide the end user a credit or replacement unit (out of the Distributor inventory), dependent on the terms of sale.

Q. Why is Cisco manufacturing in Sao Paulo and not in places with a more attractive tax incentive?

A. Cisco follows a robust process in selecting a manufacturer and their respective location(s) of operation. Evaluation was conducted across a number of dimensions including quality, price, proximity to customers, etc. For the respective products the selection of Sao Paolo offers the best balance of all dimensions, for Partners, Customers, and Cisco.


Thank you.


• # Discuss with Internal /

Partner / Both Question

1 Both Dual ordering model for solution selling. What would be the preferred process for creating deals, quotes,

and submitting orders given that part will need to go through Cisco Systems, Inc. and the other part

through CE Brazil?

2 Both B2B ordering. Will this capability be needed Day 1 for purchases through CE Brazil (this covers the

Locally Manufactured Product and Services that will be sold through CE Brazil)?

3 Both Will Boleto be used? How often?

4 Both For things like Service Upgrades, what is the preferred method of settlement? E.g. netting? What would

that look like from your perspective?

5 Partner How are Partners working with their customers in Brazil for Service Contracts? Do the Service contract

start dates match the Purchase Order submission dates? Are the invoices being sent in the same

calendar month as the service contract start dates?

6 Partner What process is used by the Partners for receiving returns from their customers in Brazil with respect to

Nota Fiscals and booking the returns, e.g. is a Return Nota Fiscal received and then the return order is

booked?

7 Internal (Non-Sales) Data migration requirements – e.g. ask them what they view is required when data is migrated from the

Deloitte platform to the Cisco platform, e.g. historical order data.

8 Internal (Sales) (Potentially

sensitive topic!) Is CSPP a must-have program for Services through CE Brazil? What is the impact if it’s not available Day

1?


• # Discuss with Internal /

Partner / Both Impact

1 Both A Bill To address in Brazil is a requirement to do business with CE Brazil.

2 Both Service contact splitting. Service contracts with sites in Brazil and outside of Brazil will need to be

split going forward (This will mean more service contracts). Cisco will need to engage customers

prior to go-live to manage this split.

3 Both Service Contract Renewals. For the foreseeable future, all TS contract renewals will need to be

done through CE Brazil for both TS contracts sold by Cisco Systems, Inc. and by CE Brazil. For

TS contracts initially sold through Cisco Systems, Inc., the renewals will need to follow the CE

Brazil process, which includes local currency, invoicing, and require a Brazil Bill To address.

4 Both Global deal impacts. Partners and Customers buying locally manufactured product and services

to be delivered in Brazil, they will need to have a local presence, i.e. Bill To address in Brazil, to

purchase from CE Brazil.

5 Both (Potentially

sensitive topic!) Distribution Channel Model. On Day 1, the model will be similar to how it is in the current local

manufacturing entity where the Brazil entity will only sell the locally manufactured product at a

local price in BRL. Specifically, there won’t be any stock rotations or 30-day price protection.

6 Internal (Maybe Both

with Wording change) Standard shipment level will only be offered as that is how the local pricing is built. There will be

no express shipment level. 1-Tier and Direct are Opt-In. 2-tier is Opt-Out.

Side Note For Presenter If asked about the need to have local presence for the 2-tier model (meaning any requirement to

have the Distributor, Reseller and End Customer all with local presence in Brazil), defer the

question to say we are working through it and will get back on the question at a later time.


• What are the impacts to your internal systems/processes to break up the placement of orders based on Brazil Price List vs.. Global Price List? This would include quoting, ordering and invoicing.

Legal and Commerce Agreements

• How can we ease the process of signing the sales agreement with Cisco Brazil for you? What kind of support / documentation will you need and how much lead time should we plan for?

• Under what conditions will you support an electronic “click to accept” of a new Internet Commerce Agreement? (or legal agreement)?

Quoting, Deal Approval, Ordering

• How do you prepare to quote your end customers when you do part of an opportunity in US-$s and part in Brazilian Reais (if that is the case)? Any considerations we have to be aware of?

• How do you plan to deal with different lead times and potentially stock locations, tax, importation of products sourced from Cisco Inc vs.. Cisco Brazil?

• For partners with an existing Cisco B2B solution: Do you foresee any additional integration / migration work we have to prepare for on B2B? What lead times should we plan for?


Services

• You will have equipment under Service with Cisco Inc. and with Cisco Brazil. What challenges do you expect for your business because of this and how can we support you?

Other

• For B2B Partners, what are your expectations around notice timing and what constraints will you have?

• Are there any issues around signing new ICA agreements, do you require any advance information outside of the actual new agreement 60 days prior to go live?

• Are there any communications templates/materials you need to be able to support the change experience/expectations to your customers with this dual model?


Review 1-Tier Questions

Q. Will Partners have a secondary credit line for local manufactured products? If not, how do we control it considering that today confusion persists when placing orders with different credit lines.

A. 1-Tier Partners will maintain their credit line as is with Cisco Inc. for purchases through Cisco Inc. Purchase of locally manufactured goods will be through the local Distributors. Credit lines with the Distributors will be dependent upon the agreement between the 1-Tier Partner and the Distributor, as is done today.

Q. If it is through Distribution, who will provide credit lines? What interest rates should we expect?

A. Credit lines and interest rates provided through the local Distributors, will be dependent upon the agreement between the 1-Tier Partner and the Distributor.


Q. Cisco informs that the lead time for locally manufactured goods will be three weeks -will this lead time be guaranteed for high volume sales? Are there specific steps required for high volume orders?

A. In order to take advantage of the shorter lead time for high volume orders, the Cisco Sales Team will meet monthly with each Distributor to effectively plan the forecast.

Q. Does the Partner have to have two discount approval paths?

A. Yes. Locally manufactured and Cisco Inc. products will be addressed as separate opportunities. There will be one deal for Cisco Inc. products, and one deal for locally manufactured products.



Q. What will be the RMA process for locally manufactured goods? Through the Distributor?

A. All early life hardware failures will be supported by the Distributor. The Distributor will accept the defective unit back from the end user and will provide the end user a credit or replacement unit (out of the Distributor inventory), dependent on the terms of sale.

Q. Why is Cisco manufacturing in Sao Paulo and not in places with a more attractive tax incentive?

A. Cisco follows a robust process in selecting a manufacturer and their respective location(s) of operation. Evaluation was conducted across a number of dimensions including quality, price, proximity to customers, etc. For the respective products the selection of Sao Paolo offers the best balance of all dimensions, for Partners, Customers, and Cisco.




Lower Street Price

Lower VAT (non refundable)

Cisco Price

• List Price

• Average Discount

• Average Selling Price

Partner Price

• Importation + Logistics

• Partner Markup



1. Promon

2. Damovo

3. Ingram

4. Comstor

5. Officer

6. Multirede

7. Wittel








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Aimee Fuller and Mark Bonfoey - Cisco · © 2010 Cisco and/or its affiliates. All rights reserved. 1Cisco Confidential Aimee Fuller and Mark Bonfoey Distributor Update Cisco LSS/CE