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PRESS RELEASE

Governments Strive to Reach Web 2.0 Vision

Public Sector Puts Innovation at Top of the Agenda, Cisco Research Shows

LONDON, April 24, 2007 - Public sector organizations have made technological innovation their highest priority in a bid to stay in tune as citizens increasingly use interactive online services. Cisco® today revealed that 'increasing my organisation's ability to innovate' was rated the top priority for 2007 by 35 percent of 84 senior government executives from 17 countries across the world.

The research, carried out among attendees at the Cisco Public Sector Summit in Stockholm last year, shows how government officials, far from being grey bureaucrats, are keen to embrace the so-called 'Web 2.0' generation of Web-based services that is credited with transforming society and commerce. It also reveals that the main issue holding back transformation in public sector organisations is not lack of ambition, but lack of skilled employees, which is claimed to be 'a real obstacle to change' by 23 percent of respondents. After innovation, the main preoccupations of administration officials are increasing the availability or take up of online services (cited as 'top of my agenda' by 29 percent of those questioned), reengineering processes to improve staff productivity (highlighted by 27 percent) and increasing the organisation's ability to collaborate (26 percent). Other issues preventing transformation are political uncertainty or aversion to change (a real obstacle in 16 percent of responses), senior managers blocking change in order protect their parts of the organisation (also 16 percent) and lack of money to fund projects-even where there is a clear payback in two years (14 percent).

Shared services, where resources are split across several departments to free up budgets to be invested in applications that directly benefit citizens, are being adopted by 73 percent of organisations in back-office functions such as finance or procurement. Meanwhile, 84 percent of organisations are introducing them in IT services and infrastructure and 73 percent in front-office services related to interaction with customers. But the research worryingly also shows that some executives have yet to embrace the benefits of a shared-services approach. Six percent claimed that 'exploring the potential for sharing services with others or outsourcing them' is not a priority.

"This research shows how public sector organisations worldwide are keen to embrace innovation to help deliver citizen-centric services, but may be held back through factors such as a lack of skilled personnel or funding," said Le Roux. "Shared services can help overcome this problem by unlocking substantial budgets currently tied up in the duplication of efforts, and it is heartening to see that many departments are now starting to share resources. Those that do not make it a priority, however, risk lagging behind in the race to provide the best value to their citizens."

The respondents to the survey, which was carried out as a precursor to a more in-depth study that Cisco will be sponsoring this year, hailed from countries as diverse as Thailand, Belgium, Canada and Russia.

"Local government and regional or state agencies both highlight the front office as a critical area where they are implementing or shortly plan to implement shared services," said Yvon Le Roux, Vice-President of the Public Sector for Cisco in Europe and Emerging Markets. "Education is the only sector which highlights IT services and infrastructure as the area where they are most rapidly implementing shared services, and healthcare and central government have both cited the back office as the focus."

About Cisco

Cisco Systems, Inc. (NASDAQ: CSCO) is the worldwide leader in networking for the Internet. Information on Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

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