Business Case Study:

Cisco Services Helps Lower TCO for Cisco IT

Leizza M. Niguidula
2/14/2018
Assignment in MBA 105 Production and Operations Management
AMA Online Education
 Table of Contents

I. INTRODUCTION/BACKGROUND Page 3

II. POINT OF VIEW 3

III. TIME CONTEXT 4

IV. STATEMENT OF THE PROBLEM 4

V. STATEMENT OF THE OBJECTIVES 4

VI. AREAS OF CONSIDERATION (S.W.O.T) 5

VII. ALTERNATIVE COURSES OF ACTION 6

VIII. STRATEGY FORMULATION 6

IX. ACTION PLAN/PROGRAMS 8

X. CONCLUSIONS 9

XI. ATTACHMENT 10

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I. INTRODUCTION

The subject business firm for this case study is Cisco IT. Cisco is the worldwide
leader in IT that helps companies seize the opportunities of tomorrow by proving that
amazing things can happen when you connect the previously unconnected. The concept of
solutions being driven to address specific customer challenges has been with Cisco since its
inception. Since then Cisco has shaped the future of the Internet by creating unprecedented
value and opportunity for customers, employees, investors and ecosystem partners and has
become the worldwide leader in networking - transforming how people connect,
communicate and collaborate. (Cisco n.d.)

As a common scenario for many large IT organizations, Cisco IT had also experienced
significant growth in their infrastructure capabilities leading to the rise in their operational
expenses. According to the recent research, up to 75 percent of enterprise IT costs are
operating expenditures. (Cisco Services Helps Lower TCO for Cisco IT 2011) This becomes
the challenge and the focus of this business case study: What are the possible causes of
action that Cisco IT needs to take to deploy its IT budget and invest more strategically? For a
more strategic IT budget and investment,

II. POINT OF VIEW

Like most of the Companies (agencies), there is always a need to understand where
their money is going and what they are getting for their investments. When budgets are
shrinking this becomes more important than ever. Understanding costs helps agencies get the
most for their money, eliminate inefficiencies and find funding for higher priority uses.
(Cutting Cost Effectively Using Strategic Cost Management 2013) The same is also true for
Cisco. It is an established company; a worldwide leader in IT. During the 1990’s, it has
experienced a period of rapid growth, however, such rapid infrastructure expansion also
resulted in some operational inefficiencies due to lack of standards, processes and tools. Over
the years, Cisco IT was able to improve its operational efficiencies, but it knew that
continued growth was on the horizon. With continued growth expected, the challenge for
Cisco IT was to concentrate on how it could make its current team more efficient and
effective while keeping operational and capital expenditures invested strategically. (Cisco
Services Helps Lower TCO for Cisco IT 2011)

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 In business, errors are made; issues arise. Simply put, one must find the biggest
impact, either by number of times the issue arises or the financial impact it has on the
business, or any other scoring method. Then it is a case of focusing the problem solving
effort on this issue until it is resolved. (Systematic Problem Solving Strategies: Improving
Customer Satisfaction and Efficiency 2016). Like in any businesses were issues arise, one of
the issues for Cisco was its inevitable growth, they needed to address noted inefficiencies
integrated with their growth and find an effective solution to their problem.

III. TIME CONTEXT

Cisco IT had experienced the urgent need to deploy IT budget and investment
strategically prior to year 2011. At this point in time,

IV. STATEMENT OF THE PROBLEM

Business' focus on changes as it moves beyond the start-up phase. Identifying

opportunities for business growth becomes a priority for long-term success. But growth
also imposes threats. Cisco’s significant growth in its infrastructure capabilities brings
greater productivity and agility for the overall Cisco organization. For the IT department of
Cisco, this growth had meant a rise in operational expenses. Although growth has its
opportunities, it also imposes problems for Cisco IT. The main problem was how to reduce
costs, increase business flexibility and accelerate technology adoption to optimize network
infrastructure. Cisco IT wanted to concentrate on how it could make its current team more
efficient and effective to ensure predictable performance and free up resources to support
increased business demands.

V. STATEMENT OF THE OBJECTIVES

For this case study, the main objectives for finding the right alternative course of
action for Cisco IT were: (1) To ensure predictable performance and free up resources to
support increased business demands; (2) To drive innovation with new technology for
Cisco teams and (3) to implement of a next-generation network infrastructure while
keeping operational and capital expenditures down.

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VI. AREAS OF CONSIDERATION (S.W.O.T.)
Table 1 below is the Areas of Consideration using S.W.O.T. analysis.

Internal Strengths Weaknesses

Strength in greater productivity
and agility of Cisco IT due to
-1 expansion
Strength on how they
designed/managed to deploy their
IT budget and investment
-2 strategically
Less effective and efficient Cisco
IT department due to continued
growth
unable to deliver greater of
quality service/product due to
operational inefficiencies

Brand name that is trusted by its

stakeholders
-3

Wide range of Innovative

Products/Services
-4
External Opportunities
Opportunity for Growth and
Expansion- significant growth on
consumer/ customer demand
-1
Opportunity in the Market-
demand for a next-generation
network infrastructure
-2
Opportunity to offer IT-as-a-
-3 service (ITaas)
Opportunity to Collaborate- team
-4 up Cisco Services
Threats
Threat of Complex Environment-
complex environment may lead
to uncertainties that could impact
the quality of services Cisco IT
offered to its stakeholders
Threat of Industry Competitors-
IT companies may advance to
next-generation network
infrastructure and Cisco may not
be able to take advantage of this
due to expanded business
requirements

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VII. ALTERNATIVE COURSES OF ACTION

Below is a list of alternative courses of action Cisco IT can take to solve its
problem or meet the challenges in their industry/organization.

(1.) Collaboration- Collaborate with Cisco Services for help in expanding from a break/fix
approach to support a broader set of IT capabilities while keeping operational and capital
expenditures down.

(2.) Adopting Proactive Approach to IT Operations- Adopt a proactive approach to IT

operations to help ensure complete, end-to-end support in deploying ITaas.

With alternative number (1.), the advantage of collaborating with Cisco Services is
for Cisco IT to identify numerous operational capabilities that could be improved by
leveraging the people, processes, and technology expertise of various Services teams. The
benefit could significantly improve cost and time savings. Cisco IT could resolve support
issues much faster than before

With alternative number (2.), adopt a proactive approach to IT operations to help

ensure complete, end-to-end support in deploying ITaas. In a full life-cycle engagement, it
would start with infrastructure design reviews, move to implementation, and eventually
focus on operations and optimization guidance. This is a more strategic way to deploy their
IT budget and investment strategically.

Collaboration and proactive approaches also hold risks; the risks that the team-up
may not be successful or may fail or being proactive may not suit their current industry
which could lead to more costs instead of savings.

VIII. STRATEGY FORMULATION

Faced with the challenge on hand, Cisco IT knew the root causes of their problem.
Operating Expenses goes up as they grow, but devising a strategy to augment the rise in their

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expenses was one of their strategic plans to solve their predicament. Collaboration also holds
risk; the risk that the team-up may not be successful or may fail. In this world were
technological advancement are at its peak, the risk is also high when there are investments at
stake. It may either be a success or fail.

With today’s increase in user mobility, it’s more important than ever for
organizations to adopt a strategy on effective collaboration solutions to maintain teamwork
and improve productivity with their employees, partners, suppliers, customers, and other
third parties. Collaboration could bring phenomenal benefits to organization, and it requires
a network optimized to achieve them. (Cisco 2017) The benefits are greater than the costs.
Rich Gore in his Cisco Blog entitled “A Wider View of Collaboration – and its Benefits,
2015”, Gore (2015) discussed that, “Collaboration” usually means “people working together
productively by sharing voice, video, and data”. Inside Cisco, the standard idea of
Collaboration includes a lot of IT Technology, like: all voice-based Unified Communication
(that is, all IP Telephony from hardware and software phones, and all Unity voicemail, and
all Contact Centers); all Video conferencing (from Jabber or WebEx clients, video phones,
desktop video, room TP, and immersive TP);all streaming video like Cisco TV (IP/TV) for
large multicast events; and software clients like email, web sites and blog sites and document
repository sites, Jabber IM, voice and video, and WebEx voice, video and data. But
sometimes Collaboration means more. For example, Cisco IT likes to say that we “enable
people to collaborate with any device, from anywhere, at any time” which really expands the
scope of collaboration.” (Gore 2015).

Collaboration as a strategy for Cisco IT would bring phenomenal benefits to their

organization, and it requires a network optimized to achieve them. Being proactive will
follow from this collaboration strategy because there are greater chances of working
productively together.

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IX. ACTION PLAN/PROGRAMS

Table below shows the Action Plan/ Steps that must be taken in order to achieve Cisco IT's goals/ objectives as mentioned above
(Section V. Objectives) through the alternative courses of actions to be undertaken.

Action Specific Tasks Responsible Area

I. Adopting a Proactive Approach to IT Operations
Have Cisco Network Optimization Service (NOS) in the
design and compatibility testing
Up-to-date Cisco Network
II. Enabling Itaas Through an Internal Private Cloud
Deploy Internal Private Cloud
Create internal process improvements and structural
changes in the way services are requested, deployed and
supported.
Cisco NOS perform the bulk of the activities
during the design and compatibility testing to
stimulate internal production environment prior to
Cisco IT (design)/ Cisco NOS
any major upgrades to enable Cisco IT to leverage
the deep expertise and industry knowledge of
experienced NOS engineers.
Cisco network collector and smart analytics
capabilities performs periodic audits to report on
Cisco Network Collector
end-of-life/end-of-sale products, and the reports
/Cisco IT
are sent to IT management and engineering teams
for action.
Cisco IT Elastic Infrastructure Services (CITEIS).
Cisco Unified Computing System and Cisco
Nexus products as well as the Cisco Intelligent
Automation solution use Cisco Tidal Enterprise Cisco IT
Orchestrator software to automate the
provisioning of virtual environments, including
network storage and compute resources.
Build the IaaS platform and foundation for the
delivery of applications, communications, and Cisco IT/ Cisco Services
virtual desktops,

III. Achieve Significant Cost and Time Savings

Cisco FTS provides Network-wide
Resolve support issues Cisco IT/ Cisco Services
troubleshooting to resolve support issues faster

Implement positive internal process changes

Internal Process Changes relating to CITEIS to reduce TCO for Cisco IT/ Cisco Services
infrastructure operations

Accelerate time deployment through Cisco

Save on labor costs Cisco IT/ Cisco Services
Remote Management Services (RMS)
X. CONCLUSIONS

Cisco is the worldwide leader in IT, but even Cisco who experienced significant
growth in their infrastructure capabilities were faced with the challenge in the rise of their
operational expenses and increased business demands. The main problem for Cisco IT was
how to reduce costs, increase business flexibility and accelerate technology adoption
optimizing its network infrastructure. Cisco IT wanted to concentrate on how it could make
its current team more efficient and effective to ensure predictable performance and free up
resources to support increased business demands. The main goal of Cisco IT were to: (1)
Support increased business demands to ensure predictable performance and free up
resources; (2) drive innovation with new technology for Cisco teams and (3) implement of a
next-generation network infrastructure while keeping operational and capital expenditures
down. One alternative courses of action for Cisco IT was collaborating with Cisco Services
to identify numerous operational capabilities that could be improved by leveraging the
people, processes, and technology expertise of various Services teams. The benefit could
significantly improve cost and time savings. Cisco IT could resolve support issues much
faster than before. Collaboration also holds risk; the risk that the team-up may not be
successful or may fail. For a more strategic IT budget and investment, Cisco IT enlisted the
help of Cisco Services to increase business flexibility, reduce costs, and accelerate
technology adoption by optimizing its network infrastructure. Another was to adopt a
proactive approach to IT operations to help ensure complete, end-to-end support in
deploying ITaas. In a full life-cycle engagement, it would start with infrastructure design
reviews, move to implementation, and eventually focus on operations and optimization
guidance.

Collaboration, from anywhere and at anytime, enables Cisco employees all around
the world to work productively together. This improves productivity; they can build teams
from the best people for any task no matter where they are. They can take advantage of
people around the world who before may not have been able to employ because of their
distance from normal Cisco locations. Cisco can integrate newly acquired company’s
employees faster and also increase employee retention, as moving to new locations no longer
means losing job. The goal: collaborate from anywhere, on any device, at any time. Along
the way, found ways to save millions of dollars monthly. (Cisco on Cisco 2018)
XI. ATTACHMENT

Cisco. https://newsroom.cisco.com/overview (accessed February 7, 2018).

Cisco. Empower Collaboration with Cisco. 2017.
Cisco on Cisco. "Cisco." Journey to Collaboration. January 24, 2018.
https://www.cisco.com/c/en/us/solutions/collateral/enterprise/cisco-on-cisco/journey-to-
collaboration.html (accessed February 12, 2018).
Cisco Services Helps Lower TCO for Cisco IT. Case Study, CISCO, 2011.
Cutting Cost Effectively Using Strategic Cost Management. Grant Thornton LLP, 2013.
Gore, Rich. "Cisco Blog." Cisco. March 18, 2015. https://blogs.cisco.com/ciscoit/b-c-
03182015-wider-view-of-collaboration (accessed February 12, 2018).
"Systematic Problem Solving Strategies: Improving Customer Satisfaction and Efficiency."
educational-business-articles.com. 2016. http://www.educational-business-
articles.com/problem-solving-strategies/ (accessed February 9, 2018).

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