Cisco Systems: Building Leading Internet Capabilities

Golden Gate University

Spring 2016 ITM225.SF1

Assignment #3:

Case # 9-301-133          

Cisco Systems: Building Leading Internet Capabilities

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1. Why didn’t Cisco rest on its laurels after the web-enablement effort was completed?  What role did Chambers and Solvik see IT playing in the next phase of technology expansion? How did they implement this new role? Is this different from your experience as to the role IT plays? How?

After implementation of Web-enablement and Oracle’s ERP system in most of Cisco’s activities over the past 5 years, the company triggered progress and growth. Nevertheless, the company had to compete not only with its competitors but also with itself to move ahead and achieve leadership in all fields and functions. That’s the main reason it didn’t rest after the completion of web-enablement.  

The internet was the key success for the visionaries of the company, Solvik and Chambers who believed that the future of technology lies basically on the internet which can provide video, data and voice transmission. All these can be combined together in one medium transmission which is depending on digital signals. From their point of view based on internal process approach the internet can perfectly support any department and function in their company. Their prospective wasn’t enough though and therefore Solvik with the help of his team conducted a survey on all the company’s departments when third of the results confirmed that the transformation would have a positive outcome on the company and agreed on the transformation. On the other hand, another third agreed on the transformation but they doubt the benefits; finally, the last third doubted that their functions could be transformed at all. Meanwhile, this results weren’t the same as Chambers’.    

        Chambers announced that in fall the first internet strategy evaluation will be lodged in early 2000 when it will engage all departments’ vice presidents. Hence, the IT department played an important role together with the external consultants who evaluated the reports. The results showed that some functional teams were some keen and committed to the evaluation more than others who played less role with less impact. As a result, and based on Chambers’s decision these review should be conducted on periodical phase – semiannual tradition so that the company will be on track and involve all the departments in other to obtain the best results for the project implementation.            

Subsequently, all de0artments were working together with the IT department and external consultants to achieve the required business and trigger progress. Hence, the IT department addressed the departments’ vice presidents with all the requirements needed for the implementation of the internet internally. Also, they helped and assisted them with their queries to be directed to the right bath and accomplish the project at its best. The IT department has other duties to achieve but this one was the most sophisticated as it depends on collecting functional knowledge to design other business units. So, they needed support to merge and integrate the IT knowledge with the with the functional knowledge.  

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1. When Pete Solvik first came to Cisco, IT reported to the CFO. The function was then moved under the SVP for Customer Advocacy. How important was it that IT reported where it did during the technology ramp-up years?  Explain your answer. Do you think technology adaptation would have moved along differently if IT reported to the CFO? Why or why not?

CFO or Chief Financial Officer in every company is the person, who is responsible for company’s profit and savings, not innovations. The scope of responsibilities for Senior Vice President for Customer Advocacy lies within everything related to customer’s convenience and loyalty, regardless how much it will cost to the company.

Moving the IT department under the management of  SVP for customer advocacy set IT department free in what they could do from the perspective of how much it would cost to a company. The trick is that customers’ loyalty and innovativeness played well for the company in the long run, not right away. The first project after Solvik came on the position of CIO was ERP enablement, which was, to the time, the most expensive project since company’s creation. The next two big IT projects were exponentially more expensive. Would the implementation of such projects be possible if the ones, who responsible for them were reporting to the one, who’s responsible for company’s short time money saving? This question is rhetorical.

The amount of money company put into the implementation of their IT initiatives is tremendous. However, the growth, company experienced thanks to the implementation of these project is even more unbelievable. The implementation of such projects allowed company to become the most fast-growing company in the history to the moment, in late 90s early 2000s.

The internal structural transformation became vital not only for company’s development. As Cisco, in late 90s – early 2000s was the leader in technology assessment, the way, how it handled new technologies, reflected the intensity of technological process in general. The company gave an impulse to innovations in the world. Therefore, in many ways

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1. Pete Solvik insisted that John Chambers play a visible role in this next phase of “Internet Capabilities” roll-out? Why do you think Solvik did that? How important was it for the CEO to be supporting this effort? Why? How important was it that Internet Capabilities were listed as a corporate goal? Explain your answer.

Cisco was among the pioneers of routing and switching market, as well as the high-tech market in general. In its mature phase, in the early 90s, it also became the leader in IT technology adoption in its daily internal and external operations. The leadership positions in both its specialization and innovations conditioned its influence on the society and the pace of technological development. As the main vector of technological development for that time was Internet technology, the company and its CEO, who determined the direction of company’s development, contributed in the next phase of “Internet Capabilities” roll-out. The point is that Chambers listed Internet Capabilities as one of company’s strategical goals, which allowed company to put tremendous efforts in the implementation of the most emerging technologies on the market and making them work for the profit. At the same time, many companies in the industry were not that brave to put significant amount of money in something new.