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The Company That Revolutionized The World of Networking: Raheel Javaid
The Company That Revolutionized The World of Networking: Raheel Javaid
Raheel Javaid
ISM 158 Analysis Term Paper 02 05 04
Table of Contents
Paper Objective...............................................................................................3
Bibliography............................................................................33
Paper Objective
The objective of this analysis paper is to identify the role and importance of information systems for Cisco Systems in gaining a competitive advantage in the Network Communication Equipment Industry. The industry, which is the focus of this paper, manufactures and sells networking products, focuses on setting up networks, providing network solutions, providing other professional services such as supporting network products and helping businesses become more efficient and competitive. In its entirety it would be identified as the Network Communication Equipment Industry. Since this is fairly long, the industry will hereafter be referred to as the Network Equipment Industry. To accomplish the analysis of the industry and specifically Cisco Systems, the paper has four sections, which are as follows: Section I: This section analyzes the structure of the Network Communication Equipment Industry, briefly discusses the competitors of the industry, the impact of globalization and the importance of information technology within the industry. Section II: This section discusses Cisco Systems role in the Network Equipment Industry and its position in the industry along with its competitors of the industry. Section III: This section discusses the role played by Information Systems in the company internally and externally. Section IV: Lastly the paper anticipates the position of Cisco Systems in the future based on the analysis from the first three sections.
Figure 1: Revenues for the major role players of the industry (*in billions)1
Cisco Systems is the world leader in the Network Equipment Industry. It has been a very stable company that has gone through hard times recently. Figure 2 gives a pictorial representation of how the companies of the Network Equipment Industry compete and influence the market. The router market declined globally by as much as 32% in 20022. The graph shows the revenue for these companies, which have suffered significant losses. Cisco Systems revenues also dropped by about 3.4 billion dollars (about 15% of the total revenue) in just one year. But to date, Cisco Systems has been the only company in the industry to regain its strength and maintain its influence on the market. Lucent Technologies and Nortel Networks on the other hand experienced a major setback and are still struggling to regain their strength in the industry. Lucent Technologies, another significant company in the industry, also focuses on manufacturing products for networks. Its products comprise of telephone switches, Wireless Network equipment, Optical equipment, network management software and an aggressive customer support service. Lucent Technologies had to face hard times during the recession and is still recuperating from the damage that it suffered. Nortel Networks, a well-known company in the Network Equipment Industry, also offers networking and communication services on a global level. Nortel originally focused only on voice networks and cellular technology until after its acquisition of Bay Networks in 1998. The acquisition facilitated Nortel Networks in expanding its operations and exploring the data networking market. Juniper Networks is also in the manufacturing business of the industry, but focuses only on the IP segment of the industry. They mostly provide equipment to small Internet Service Providers and other small businesses. Juniper Networks has also experienced losses in the last couple of years, like most of the other companies in the industry. But Juniper Networks regained its strength soon and is now a posing threat to all the companies in the industry.
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Juniper Networks is a new entrant in the industry that was founded in 1996. It has grown really fast and has shown exceptional results in a very short period of time despite the threats it has had to face in the industry. The key for Juniper Networks success was that it only focused on the IP routing segment of the industry, which helped the company survive and develop and get to the point where it is today.
30 billion 25 billion 20 billion 15 billion 10 billion 5 billion 0 billion 2000 2001 2002 2003 Cisco Systems Nortel Networks Lucent Technologies Juniper Networks
Figure 2: A graph showing the fluctuation in revenues in the industry (*in billions)
In order to be able to compare these companies, it is important to understand that though these companies compete in the same industry, they also focus on product segments that make them different from each other. Focusing on different sectors give these companies a competitive advantage on each other. For instance, Cisco Systems is a company that focuses specifically in data networking, end-to-end communication, and providing complete business solutions along with selling specific network equipment products. So basically, they focus on the LAN and WAN throughout the world. Lucent Technologies on the other hand are more into Wireless Base Stations, Telephone Switches, 3G solutions and other networking management software. Nortel Networks also focuses more on cellular technologies (CDMA, GSM, TDMA, UMTS), Optical Networks etc. Juniper Networks, unlike these giant companies, focuses only one segment of the market, which is IP routing. Though Juniper Networks is a small company that has emerged in the industry recently, it still poses a great threat to the giant companies in this industry.
Figure 3: Companies Net Incomes show the competitive edge in the market (* in billions)
Research and Development is one of the most important ingredients of this industry, since the products being manufactured and technology are constantly being innovated. These companies, in order to keep their influence in the market, have to come up with new and improved products on a regular basis that could give them a niche in the industry.
Customer Support
Products Development
Sales/Distribution
The Porter Competitive Model examines the Network Equipment Industry in detail in relation to the buyers and suppliers of the industry. There are four main parts to the Porter Competitive Model: Potential New Entrants, Bargaining Power of Buyers, 8
Substitute Products and Services, and the Bargaining Power of Suppliers. This model identifies all the competitive forces in the market, existing alliances, potential threats and other sources of positive and negative influence instead of just focusing on the use of Information Technology. The analysis clearly shows that the Network Equipment Industry encompasses all kinds of companies. Some of these are struggling for survival, some are trying to gain a bigger industry share and some are just too big for most of the companies to compete with. The Network Equipment Industry is a very competitive industry. The Porter Competitive Model shows three enormous corporations in the industry that dominate along with the new entrant that could impose a threat to these giant corporations.
Intraindustry Rivalry SBU: Cisco Systems Rivals: Lucent Technologies, Nortel Networks
Figure 5: Porter Competitive Model for Network Communication Equipment Industry (i). The Bargaining Power of Suppliers
The bargaining power of suppliers is significantly based on the uniqueness of their products or services that they have to offer. Since, Cisco Systems is essentially in the business of manufacturing, IT vendors and skilled personnel have the most bargaining power. Standards Organizations such as ANSI, NIST, and IETF are considered to have significant bargaining power also. Component and end-to-end product manufacturers are the most significant suppliers of the industry and have a great deal of bargaining power. (ii). The Bargaining Power of Buyers The bargaining power of the buyers mostly depends on the volumes of production. The Internet service providers are the most significant buyers in the industry. They depend on the networking equipment to provide service to businesses as well as individuals. Corporations depend on networking equipment to perform almost any aspect of their business. Government entities are also buyers in this industry, since they buy some of the most sophisticated and expensive equipment to run their operations. (iii). Potential New Entrants New entrants are companies that are either new competitors in the industry or existing companies that have grown, developed, and are highly capable of competing with the strategic business unit directly. Leaders of this industry are under constant threat by startups and foreign competitors. Their strategy is to manufacture and sell the same products at a price lower then these industry giants. Foreign competitors in this industry are one of the biggest threats because of the fact that most of them do not have any laws regarding intellectual property. Sometimes these competitors, by means of reverse engineering, create most of these products at a very low cost. This in turn increases their profit and influence over the industry. (iv). Threats of Substitute Industries A substitute is an alternative to doing business with the strategic business unit. The two biggest substitutes for the industry are the outsourcing of network management and sellers of used equipment. Most of the work these days is being transferred offshore because of the cost efficiency factor. In the last couple of years, a significant number of companies ran out of business due to recession and most of them sold a lot of equipment for a lower price. This reduced the sales for the companies in the Network Equipment Industry. Conclusions based on Porter Competitive Model analysis
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The analysis of the Porter Competitive Model of the Network Equipment Industry helps us derive various conclusions about the industry. The bargaining power of suppliers is predictably high, since this is an industry that depends on highly skilled personnel and IT vendors for manufacturing, support and sales. The bargaining power of the buyers is also high, since there are so many end users of these products and services that are offered by the industry. Though, this is a highly competitive industry, we still see new entrants frequently. This is because a lot of these companies are still capable of generating profits in the industry and because they realize a possibility of getting bought out by one of these giant corporations. The threat of substitute products and services is something that this industry has started experiencing recently. Outsourcing network management is something that can turn out to be a threat in the long run, since the companies that are providing these services can end up gaining too much control of the industry, which could harm the Network Equipment Industry itself.
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A company in this industry cannot thrive if it does not have a strong global presence. However, the risks of globalization include strain on company resources, cost and legal issues.
Engineering
Marketing
Services
Customer
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companys competitive strategy in the market, significance of the information systems and the companys strengths and weaknesses.
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flexibility. Each area of these areas was a key in establishing an efficient and more effective Internet network. Cisco Systems is the leader in resolving these exact problems and a lot more. The networking market has evolved from just being used as the department of defenses and academic researchers communication line to being a medium to network every single household and business. Cisco as well has tremendously progressed from just an equipment provider to a full fledge solution provider. It has entered every possible market that has to do with data networking and communication and has become an icon of technology, innovation, quality and service. The most important aspect in this industry is the interoperability among various vendors equipment and different technologies. Other things like scalability, reliability, speed, service and pricing are of utmost importance as well. Cisco has focused on all these aspects and much more to make itself the number one equipment and service provider in the networking/data communication market. Business Leaders A company is known by its leaders and its culture. Cisco Systems is fortunate enough to have some of the most capable leaders of the industry. John Chambers: (President and CEO) John Chambers received his law degree from University of West Virginia and an MBA from Indiana University. He started working for IBM Corporation as a sales person in 1977. In 1983 John Chambers joined Wang Laboratories and in a seven year period was promoted to senior vice president of US sales and field service operations. Chambers left Wang in 1991 and joined Cisco Systems the same year as Senior Vice President of Worldwide Sales and Operation. Chambers has had the honor of serving two of the American Presidents. He was on the Vice Chairman of the President George Bushs National Infrastructure Advisory Council and he was on the President Bill Clintons Trade Policy Committee. John Chambers brought a strong leadership to the company along with his experience and vision. In 1995, he was promoted to CEO of Cisco Systems. Since Chambers became the CEO, the companys revenue went from 1.2 billion annually to 18.9 billion in just 6 years5.
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Chambers was voted the Most Powerful Person in Networking by Network World magazine. He has received many other awards and in recognition of what he has achieved and in his career so far and how he made it possible to make Cisco Systems the industry leader and maintain the companies position. John Chambers was a visionary sales person. From the very beginning he started selling the idea of Cisco to the world. He was smart enough to pick the right team, the right technology and the right market to focus on. He dedicated himself on a personal level and brought revolution in the high tech sector by introducing his management style. In the beginning he made sure that he delivered on all his promises as far as the product and technology went. After a few years, he became a brand himself. John and his team shifted through numerous ideas and were lucky enough to choose the perfect ones. This did not happen all the time but most of the time, which is an important measure. Aside from his leadership, his vision, and his commitment to excel he made some amazing acquisitions of companies that could have threatened the company or those, which were coming out with cutting edge technology. Indeed there were many acquisitions that did not justified at the time but proved to be an important step towards the success of the company afterwards. Pete Solvik: (Senior Vice President and Former CIO) Another important leader in Cisco Systems history is Pete Solvik. He is the former Senior Vice President and CIO for Cisco System. Solvik joined the company in the early 1990s. He made an attempt to redefine the companys infrastructure by integrating all the business divisions with the implementation of the ERP systems. He was also responsible for implementing many other applications and tools the company uses in its operations, such as the CCO and the MCO. Implementing the information systems in the infrastructure of the company every step along the way has helped the company achieve all this success and be competitive in the industry. Solvik gave the company its vision and made it clear that it would be impossible to compete in the industry at this level without depending on information systems. Peter Solvik was a visionary and played a significant role in changing the IT infrastructure of the company, which has led to its success. Brad Boston: (Senior Vice President and CIO) Brad Boston, Senior Vice President and CIO of Cisco Systems, has been involved in integrating Information Systems in every segment of the company. Boston has a huge role in creating and expanding the Cisco online retail store and developing the companys image online. He took over the responsibilities of Solvik after he left the company. Boston is following the footsteps of Solvik and is making sure that the infrastructure of
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the company stays well integrated and uses information systems to stay competitive in the industry.
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S le ($m a s il.) 2 ,0 0 0 5 0 .0 2 ,0 0 0 0 0 .0 1 ,0 0 0 5 0 .0 1 ,0 0 0 0 0 .0 5 0 .0 ,0 0 0 0 0 .0 19 97 19 98 19 99 20 00 20 01 20 02
Figure 7: Sales for the company (millions) Figure 8 provides an overview of the companys profits and revenues over the period of the last five years. The only year Cisco Systems had a net loss was 2001. this was the time of the recession.
Figure 7: Financial Highlights for Cisco Systems Figure 9 gives a break down of the companys total sales percentage of different products. The main source of their revenue was the routers and switches, which comprise 70% of the total sales.
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(i). Strengths Cisco Systems has always set high standards for itself and has mostly been successful in achieving them. Excellent Leadership The company has the strongest team in terms of the leaders as well as engineers that work on the products directly. The company leaders have a tendency to look at the big picture and this poses high visibility in terms of innovation. The high return on investment and increased profits give the company a great opportunity to invest in Research and Development. Brand Recognition and Industry Leadership Cisco Systems most valuable strength is its extremely valuable brand equity and recognition. The high quality of their products and prompt customer support guarantees customer satisfaction. Brand is considered a sign of prosperity, innovation, high quality, service, financial stability, intelligence and profitability. Global Presence One of the most important factors under economic strength would be the companys global presence. Cisco Systems is known worldwide and is trusted in the local as well as the international Network Equipment industry. Financially Strong Cisco Systems is financially one of the most stable companies in todays economy. The company has a huge amount of cash at its disposal, which gives them an opportunity to do Research and Development, which in return helps them keep innovating their products and their business strategies. Acquisitions Cisco Systems has acquired the most valuable and fastest developing companies such as Linksys, Hammerhead Networks, Signal Networks and Okena etc. These acquisitions have made this company even stronger in terms of having a greater influence in the Network Equipment industry. Vast Range of products The company has the most expansive range of products starting from just small routers and switches for individual household use to complete business solutions for huge corporations. The company leaders have been able to have some of the best relations with their buyers and suppliers and are highly appreciated by its investors. These are all good signs for the companys future. (ii). Weaknesses
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Cisco in spite of being the worldwide leader and the most influential company in the Network Equipment industry has a few weaknesses. Some of them are ironic because of its size and the market share it has in the industry. Target of every competitor Cisco systems is a giant company in the industry. Whenever a company in the industry competes, it always thinks about Cisco Systems. Size of the Company Cisco is a significantly large company. It has over 34,000 employees worldwide, doing business throughout the world. The size of the company and the fact that it is globally very active makes it hard to manage the company. Lack of Success within the Telco market One main weakness that can be found in Cisco Systems and that might hurt them in the long run is that there is too much focus on the enterprise and all sectors of Network products but not enough on Telco. Acquisitions Cisco systems has made over twenty nine7 acquisitions in the last three years alone and in the long run can face legal issues by taking over too many companies and forming a monopoly, just as in case of Microsoft Corporation. Acquisition strategy can be viewed as both strength and a weakness. Another important issue is that it is difficult to assimilate new products and people into the organization.
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opportunities involving the use of information systems. The way it works is that it starts out by identifying a business target, and then goes through layers of Thrust, Mode and Direction before it significantly uses the information systems to execute the plan.
Strategic Advantage Figure 10: The Strategic Option Generator Target: There are three possible strategic targets that a company can choose to gain competitive advantage over others; Supplier, Customer and Competitor. Cisco Systems has always kept a keen eye on its customers and have acted according to their needs. It has made buying services and products more convenient and reliable. The Cisco Connection Online is one of the biggest online stores that serves its customers and provides them with customer support for the products. The companys customer service has been the key to its well-recognized brand name and goodwill. Thrust:
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Thrust deals with the business strategy a company adopts. It can be divided into two categories; primary and secondary strategies. a) Primary Strategies: Primary strategies consist of two different strategies, which are as follows: i) Differentiation ii) Cost A company can choose only one out of the two primary strategies. It can either have a business strategy that differentiates itself by having something unique about itself from its competitors or it can go for the cost effective route and provide the same services and products as its competitors for cheaper prices. b) Secondary Strategies: In addition to choosing the primary strategies a company can also choose secondary strategies. A company can choose none or all three of these strategies. They are as follows: i) Innovation ii) Growth iii) Alliance Cisco Systems primary strategy has clearly been differentiation. The company has always focused on customer satisfaction and providing complete business solution to its customers rather than providing solutions to smaller problems like many of its other competitors. The companys intensive use of information technology throughout its business process has made it competitive and unique in the industry. Cisco Systems has used all three of the secondary strategies for its success. It has been innovative, has tremendously grown in a short period of time and has formed the most alliances in the industry then any of its competitors. Mode: Mode simply means if the company is aggressive in the industry or not, are they the leaders or are they the followers. This depends on a few factors such as innovation, how much the company spends on Research and Development and a lot of other factors. Cisco Systems is recognized as a company with an offensive business strategy in the industry. The company has spent a lot of money of Research and Development and has taken risks just to be the industry leader. Direction: Direction is divided into two classifications Use and Provide. If the use of the information system is internal i.e. within the company then it comes under Use. If the use of the information systems is beyond the boundaries of the company then it is also
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provide. Cisco Systems is one of the very few companies that uses its own products internally and externally to run its daily operations.
Senior Management
IT Leadership
Business Leadership
Information Systems Organization Use of information systems has proven to be not only one of the most significant and contributing sources to the companys success but has played an integral part in 23
managing the fast paced growth of the company in a short period of time. The nature of the business and the size of the company make the use of information systems essential and possible to manage the company. Like any large company Cisco is motivated to run its business in the most effective way possible. Given the nature of its products it is also both logical and necessary for it to become the best possible example of running its business through the use of its own products. Peter Solvik attempted to change the role of IT within the infrastructure of the company. He was the one to make the most significant change in the business strategy of the company by implementing an ERP system to integrate all the different divisions of the company. By this time Ciscos information system had become a key competitive advantage by generating most of Ciscos sales. Senior management was smart enough in its evaluation and implementation strategy. Peter Solvik was able to recognize early on that Cisco had two primary challenges in its IT department. First, the IT department was too traditional because it was viewed as a cost center that reported to the Finance department. He changed this by making the information systems department report to the Senior Vice President of Customer Advocacy himself. Secondly, Solvik recognized that the current infrastructure at that time would not be able to support the growth the companys business strategy was aiming for and nor would it be able to let the company to compete in the industry. He was also the person to let the information systems department give the authority to make all the decisions about implementing any new application or making changes to any of the existing strategies. The implementation of the CCO was also Solviks idea. He was able to analyze the effects and the benefits of having a online connection between the company and its customers. Peter Solvik was a visionary and played a significant role in changing the IT infrastructure of the company which has led to its success. When Brad Boston took over as the CIO he continued the work of Solvik by further improving the companys information systems department and making innovations on a regular basis. He implemented various other applications to the infrastructure of the business, which helped the company integrate its partners and suppliers in its EDI systems. Since the company realized the importance of information systems, pointed out by Peter Solvik, Brad Boston as the CIO got all the support of the senior management and the funding to implement the strategies.
(c). Redefine/Define
Redefine/Define is another concept, which helps us to understand a companys approach
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of successfully using information systems to gain a competitive advantage in the industry. Cisco Systems has implemented the use of information technology in almost all of its daily operations within all its departments. The use of information technology has added to the companys competitiveness significantly.
Product/Service
Network Equipment/Services
Delivery Process
ERP Systems
Customer support available 24/7 Convenient and fast online transactions High Merchandise Availability
Value to Customer
ERP (Enterprise Resource Planning): ERP is the backbone of a business. It is an application that is used to integrate all the different divisions of a business into one. Cisco implemented the Oracle 11i ERP system in the year 19948, which integrated the companys manufacturing and sales departments and made the production more efficient, cost-effective and manageable. Before the ERP system was implemented, an order from the customer would take much longer to process. The ERP system also enables the companys partners and suppliers to act as part of the company itself, hence making the operations more effective.
www.cisco.com
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CCO (Cisco Connection Online): Cisco System introduced the Cisco Connection Online. The Cisco Connection Online is an online store where the customers can conveniently place orders after doing research on different products of their interest, get technical support for their products and manage their accounts online etc. These online buyer connections not only provide convenience and advantage to the companys customers but also enable the company itself to keep track of the orders and process the orders more efficiently. A big part of the companys sales is done through CCO, which cuts down the cost of their sales expenditure. MCO (Manufacturing Connection Online): The Manufacturing Connection Online is an attempt to communicate with the companys manufacturers and suppliers online and be able to place orders to the suppliers. This application keeps all the information of the suppliers and the status of the orders that the company puts in. CEC (Cisco Employee Connection): Cisco Systems has implemented a system used within the company itself. This system maintains contact between the employees of the company and the senior management and the sales and manufacturing departments. The system has made it easier for the company to deal with its internal issues and also communicate more efficiently.
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Customer
Sales Department
Manufacturing
Database
DF Model
Non DF Model
Contract Manufacturing
Contract Manufacturing
Customer
Cisco Systems
Customer
Figure 12: An overview of a typical manufacturing and sales process The manufacturing and sales process can sometimes be a highly complex procedure, depending on the product and its quantity. Figure 12 gives an overview of the complete traditional cycle from the point of receiving an order to shipping it to the customer. First the customer places an order with the sales department. The sales department puts the demand for the order through an EDI (Electronic Data Interchange) system to the manufacturing department along with the product number and the order specifications. These orders are refreshed every other day in the database. The manufacturing department links to all the CMs (Contract Manufacturers) and product manufacturers through another EDI system. The manufacturing department sends the order out with all the specifications to the manufacturer who has the contract for that specific product with Cisco Systems. The CM downloads all the information for this product from a Cisco Systems database. There are two different types of orders; the DF model (Direct Fulfillment model) and the non-DF model. The DF model is shipped directly from the CM to the customer and once it is shipped, the accounting department at Cisco Systems makes the payment to the CM. In case of a non-DF model, once the product is manufactured, it is shipped back to Cisco Systems from where it is shipped to the customer site. The payment is made to the CM as soon as the product is received. Cisco Systems has a lot of tools to assist the whole process. The company uses a tool
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called the Meter (Manufacturing end-to-end report). This tool is an online instrument, which keeps track of different manufacturing processes with different contract manufacturers. The contract manufacturers are logged in the system by serial numbers provided by the company. The manufacturing department can access the progress of an order on this system. Then the company has another tool called the SCE (Score Card Evaluation), which evaluates the companys suppliers. These evaluations are then added to the suppliers history in the database. In addition to all these tools and software, Cisco Systems has implemented various other information systems tools, which have enabled the company to be more competitive, and customer oriented. The company has implemented a variety of other tools in its Human Resource, Accounting and Finance and sales departments to stay closely connected with not only its suppliers and customers but also its employees.
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The GSM (Global Supply Management) is responsible for the selection of an approved supply base that meets the quality, technology, service, and cost requirements of our product. All production commodities are acquired from these approved sources, defined as either Cisco Preferred Suppliers or Cisco Approved Suppliers. After a component is qualified, the vendor is controlled through Approved Vendor List (AVL) and EDI software. Supply Operations personnel are responsible for acquiring material from approved suppliers only. If an issue is encountered with a suppliers part or process, the Supplier Corrective Action Procedure is used to correct it. In the year 2001, Cisco Systems implemented an application called the eHub9, which is responsible for maintaining a close connection with the companys suppliers. It is basically an application that the companys suppliers can access along with the companys employees. It gives a detailed inventory of all the suppliers in one place, which makes it easier for the company to accept orders from customers and place orders to suppliers. Cisco Systems has implemented telecommunications and network communication internally and externally in its day-to-day operations, which has significantly helped the company be competitive and form relationships with its customers and suppliers.
Information Systems Integral to the Business: Cisco relies on its Information systems to do its day-to-day business. The ERP system forms the basis for the company's web-centric and IP-based IS infrastructure. It has allowed the company to completely integrate and streamline its operations ranging from
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customer service and internal client service to supply chain management and net commerce. If all of a sudden Ciscos IS suffers a shutdown the company will simply screech to a halt and tens of millions will be lost everyday.
Executive/IS Manager Partnership Cisco Systems is a company with a culture that allows the senior management and the information systems management develops an ongoing working relationship. The information systems department has achieved so much in making the company competitive in the industry that it has made itself credible in the company. The senior management and the information systems management work together on forming competitive business strategies and analyzing the already existing ones. Linkage to Customers The main purpose of implementing the information systems for Cisco has always been its customers. The companys main focus has always been its customers, which is obvious from their business strategies and implementation of the information systems. The company implemented the EDI systems, CCO and various such applications just to be able to form a close relationship with its customers.
applications make it possible for the company to be efficient and have a competitive edge over its competitors. Apart from the manufacturing and sales department, even the HR and the finance department use highly sophisticated software to carry on with their daytoday operations. Internally, Cisco Employee Connection (CEC) helps its employees by providing centralized access to information, tools and resources. Through the Communication and Distance Learning initiatives, Cisco keeps employees informed with the latest data relevant to them and provides current information regarding Ciscos performance resulting in an increase in employee morale, monitoring of progress and a total optimization of the workforce. Externally, Cisco continues to maximize the utilization of its IS architecture for customers with online help. The CCO has generated a large amount of the sales performed by the company in the recent years. These online sales reduce the cost of the company by a huge number, hence increasing the profits. The online support also guarantees customer satisfaction. An integral part of Ciscos growth is derived from external acquisitions. One third of Ciscos new technologies are from partnerships and acquisitions. Because of Cisco's Internet Protocol and standards based IS architecture, the company is able to quickly and efficiently add the capacity required to handle the administrative processes of acquired businesses. Because of IS Cisco was able to create an environment that keeps their customers, suppliers, partners, and employees satisfied, which is the key for the companys success. Much of Ciscos success come from the understanding of the importance in implementing and updating IS to stay competitive in the industry. The company has also maintained its market leadership by being able to create innovative products and service that keep the companys customers interested. It is clear that Cisco would not be able to sustain a competitive advantage without the use of IS. (b). Is the Company Effectively Postured for the Future? Cisco Systems has established itself as the worldwide leader in the Network Equipment Industry. The company uses its highly sophisticated Information System to remain on the offensive side and to maintain its leadership position in the industry. It has established a sold foundation both on the technical and business side of IS which will allow it to remain a market leader. Senior management within the company understand the importance of IS in the companys continual success and that is something very crucial to a business. They must continue to use IS to provide innovation, be efficient, and cut cost to provide even more value to its customers. Cisco Systems must concentrate on making sure that it will always have the competitive advantage over its competitors by focusing on its customers.
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Cisco Systems IT strategy both harmonizes and supports its business strategy. Cisco Systems is a company with a solid financial background and have enough assets to invest into Research and Development and keep innovating their products, service and their infrastructure. With a remarkable management and information systems team, motivated employees, and the financial situation of the company, Cisco Systems will continue to be the leader of the industry.
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http://www.networkmagazine.com/shared/article http://finance.yahoo.com/q?s=csco&t=1y http://www.cisco.com/warp/public/750/execs/solvik.html Cisco Behind the Hype, Business Week, January 21, 2002
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Hoovers Inc, Hoovers Company This site was one of the best sources since it provides all the factual information about the company and its competitors in the industry in a precise and clear way. www.cisco.com This site provided the most current and relevant information about the company in depth, which gave a good understanding of the business the company is in, the leaders of the company, financial information, and topics like innovation, alliances, growth etc. It also gives a very good undersatnding of the company for someone who does not know much about the company itself or the industry. http://www.soe.ucsc.edu/classes/cmps158/Winter04/cisco.html This was a good source since it has all the inforamtion pertaining to the paper in one place. This source has all the information about the company and its competitors divided up in sections just like in the guidelines.
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