Cisco: 'Productivity enhancement should come from systems innovation'

Cisco as an enterprise is known to be saving around $1 bn
annually by implementing its own technology. What's the secret of your
success?

IT is the enabler of Cisco's business strategy. Our vision is to enable
everything we do with IT, which means to be successful as a company, we must
align IT with the business imperatives at multiple levels. By enabling business
operational functionality, business capabilities, and growth strategies, IT at
Cisco sets the standard for increasing productivity not only by reducing
operating expenses, but also through enabling revenue growth.

How do you measure the impact of IT in your organization? What
are the key measurement metrics and methods for tracking accountability?

We have always measured the impact of IT from a productivity perspective,
expecting at least half of our productivity to come through systems innovation.
At a company level, Cisco measures productivity as simply revenue per headcount,
or expense to revenue for operational functions. In recent years, we have found
it useful to measure process and transaction cycle times, as well as revenue
enablement. These measures help us to be more selective when prioritizing
projects and more effective at measuring the success of a project. As IT becomes
more aligned with the business and moves up from offering operational
functionality and business capabilities to enabling strategy we are now also
measuring the time it takes to produce or scale required capabilities.

What are some of the challenges you face in implementing the
latest IT and communication technologies, considering they are changing really
fast?

The key is to add value as fast as the business' needs require it and at
the same time to balance the risk. When making changes to the business
architecture and the system architecture simultaneously, often, we must decide
between making incremental changes or creating something new-and taking
advantage of more flexible technologies.

The pace of change really highlights the real power of building
upon a services oriented architecture, which allows IT to be as agile as the
business demands. Managing the power of these technologies requires ever tighter
alignment with business strategy.

Enterprises in India, in general, are reluctant to adopt IP and
wireless technologies for doing their business. What do you think could be the
reason?

I do not think that this reluctance is unique to India. Many customers are
facing these same concerns: Is the technology mature and available? Is it
secure? Also, realizing the full value from technologies requires tight
alignment with business strategies. Many enterprises are worried about their
processes and skill-sets to manage the new technology. These are issues we
address with our customers daily. This is a great opportunity for competitive
differentiation.

Are you in favor of enterprises outsourcing their IT
infrastructure to managed service providers? What are the challenges enterprises
face when they outsource?

In general, I think it is appropriate to outsource work that is not core or
mission critical to the business. A common challenge with any infrastructure is
maintaining its ability to add new technology or applications as they are needed
for the business. This flexibility can be compounded if the network has been
outsourced and not closely managed.

Sudesh Prasad


sudeshp@cybermedia.co.in