30 minute interview

“We saved $2.2 billion in 2004”

Brad Boston CIO & Senior VP Cisco

*As the CIO of Cisco, what were the challenges faced by you?

The key challenges were two-fold—to drive employee productivity and to make the business more agile and productive. We believe in standardising and simplifying our operations, and our principal aim is to eliminate complexities in IT operations. Unnecessary complexities add to cost. We are also focussing on business process re-engineering to automate everything and do everything electronically. As 95 percent of our manufacturing is outsourced, we are looking to integrate different business-to-business applications (such as ERP and CRM) on to a single platform. This should result in uniformity, and will resemble a large unified environment embracing all outsourced manufacturers. Further, we have implemented a Sales Force Automation (SFA) solution which we have integrated with our IP telephony network. The SFA solution has helped us deal with our customers, especially SMBs. Security is one of our major concerns, and we have adopted a proactive approach towards it.

*5 percent of Cisco’s revenues are pumped into IT. What do you get in return?

Of this 5 percent, 50-60 percent is spent on IT infrastructure—data centre networks, phones and high-speed connections; the balance goes into application development. We saved $2.2 billion in 2004 as a direct result of the efficient use of IT. Information technology has helped us automate our online ordering system. This has considerably reduced the lead-time to market our products. It has brought transparency and visibility in our sales deals, and there is better flow of information. We have also streamlined our inventory management. We deploy our own technology within the organisation, and work on internal case studies that help us analyse the business returns from using IT. This exercise helps us optimise the use of IT within Cisco.

*Is IT spending by large corporations on the rise globally?

IT spending varies as it depends on the type of industry. IT has been a key driver for financial services, logistics and airlines as their businesses are completely dependent on it. For instance, the IT spend of a financial services company is in the range of 8-12 percent of its total revenues. Companies are displaying optimism—especially in the financial, airlines and the retail verticals—when it comes to spending on IT. During the downturn, IT spending went up in some financial and retail companies as they wanted to get closer to their customers to understand their preferences and requirements better.

*What kind of work does your Indian centre do? How important is it to Cisco’s overall strategy?

Our Indian centre focusses on R&D work (development work surrounding our products) and on managing the internal IT infrastructure of Cisco. The centre is significant as we have an operation command centre located in Bangalore. This centre administers and manages our internal IT infrastructure at the global level. It is Cisco’s only operation command centre outside the US. The Bangalore centre works in tandem with our centre in the US, and monitors our internal IT infrastructure very closely. In addition, the Indian team here works on the IT application upgrade projects, and is playing a significant role in automating our business processes. It also plays an important role in database administration.

—Abhinav Singh