MBA105 - Production and Operation Management

Assignment 1
Case Study: CISCO
SERVICES

CARLITO G. GABRIEL, JR.

Master in Business Administration
 INTRODUCTION

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 become 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?

I. 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)
 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.

II. TIME CONTEXT

Cisco IT had experienced the urgent need to deploy IT budget and

investment strategically prior to year 2011.

III. 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.

IV. 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 a
next-generation network infrastructure while keeping operational and
capital expenditures down.
 V. AREAS OF CONSIDERATION (S.W.O.T.)
Table 1 below is the Areas of Consideration using S.W.O.T. analysis.

Internal Strengths Weakness

1. Strength in greater Less effective and
productivity and agility of efficient Cisco IT
Cisco IT due to expansion department due to lack
2. Strength on how they of standards and
designed/managed to processes during
deploy their IT budget continued growth.
and investment
3. Strategically Unable to deliver greater
Brand name that is of quality service/product
trusted by its stakeholders due to operational
4. Wide range of Innovative inefficiencies
Products/Services
External Opportunities Threats
1. Opportunity for Growth Threat of Complex
and Expansion- Environment-complex
significant growth on environment may lead to
consumer/ customer uncertainties that could
demand impact the quality of
2. Opportunity in the services Cisco IT offered to
Market-demand for a its stakeholders.
next-generation network
infrastructure Threat of Industry
3. Opportunity to offer IT-as- Competitors-IT
a-service (ITaas) companies may advance
4. Opportunity to to next-generation
Collaborate- team up network infrastructure
Cisco Services and Cisco may not be
able to take advantage
of this due to expanded
business requirements.

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 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.

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.

Actions Specific Tasks Responsible Area

I. Adopting a Proactive
Approach to IT
Operations

Have Cisco Network Perform the bulk of the Cisco IT (design)/ Cisco
Optimization Service activities during the NOS
(NOS) in the design design and compatibility
and compatibility testing to stimulate
testing. internal production
environment prior to any
major upgrades to
enable Cisco IT to
leverage the deep
expertise and industry
knowledge of
 experienced NOS
engineers.

Up-to-date Cisco Perform periodic audits Cisco Network Collector/

Network to report on end-of- Cisco IT
life/end-of-sale
products, and the
reports are sent to IT
management and
engineering teams for
action.

II. Enabling Itaas

Through an Internal
Private Cloud

Deploy Internal Automate the Cisco IT

Private Cloud provisioning of virtual
environments, including
network storage and
compute resources.

Create internal Build the IaaS platform Cisco IT/ Cisco Services
process and foundation for the
improvements and delivery of applications,
structural changes in communications, and
the way services are virtual desktops.
requested, deployed
and supported.

III. Achieve Significant

Cost and Time Savings

Resolve support issues Provide Network-wide Cisco IT/ Cisco Services

troubleshooting to
resolve support issues
faster

Internal Process Implement positive

Changes internal process changes Cisco IT/ Cisco Services
relating to CITEIS to
 reduce TCO for
infrastructure operations

Save on labor costs Accelerate time Cisco IT/ Cisco Services

deployment through
Cisco Remote
Management Services
(RMS)

X. CONCLUSIONS

Standards, processes and tools are necessary and must be in place

before a rapid business expansion will be implemented to avoid operational
inefficiencies. Through in-placed standards and processes Cisco were able
to reduced costs, increased business flexibility and accelerated technology
adoption optimizing its network infrastructure. Cisco IT concentrated on
making its current team more efficient and effective to ensure predictable
performance and free up resources to support increased business demands.

Businesses need not to resolve its problems alone, one alternative

courses of action for Cisco IT was collaboration with Cisco Services which
results in identifying numerous operational capabilities that could be
improved by leveraging the people, processes, and technology expertise of
various services teams. This collaboration significantly improved cost and time
savings. Cisco IT resolved support issues much faster than before.

Collaboration, from anywhere and at any time, 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
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
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
"Systematic Problem Solving Strategies: Improving Customer Satisfaction and
Efficiency."
http://www.educational-business-articles.com/problem-solving-strategies/