Cisco IT Strategy

Transcript

Introduction

Peter Shaplen: Welcome to this podcast series, an ongoing conversation about trends, technology, and business. For Cisco, I'm Peter Shaplen. Rebecca Jacoby is Senior Vice President and the Chief Information Officer at Cisco and someone who has been instrumental in articulating a new vision of information technology. Welcome to the program.

Interview

Rebecca Jacoby: Thank you.

Peter Shaplen: Explain for us your vision. What is it? What does it look like? And how did you come to it?

Rebecca Jacoby: Actually the badges that we wear everyday says these words right on them: Enable every move we make with IT. And so our vision for our IT organization is to enable every move the company makes with IT, at an operational level, at a business capability level, and in terms of enabling our major growth strategies as a business. When I first came here in the mid-90's there was an opportunity to have IT really change the way it enabled business models. This was really the advent of the use of the internet in people's business models and it created sort of an accelerated productivity. What's really fascinating about today is there's an onset of new technologies around communication and collaboration that really are offering the opportunity for accelerated productivity again in the business. And the way you do that is really enabling new business models that allow you to grow your business.

Peter Shaplen: You bring a passion to something that probably a lot of people take for granted.

Rebecca Jacoby: You know, I think it is true that in some ways we take technology for granted. I will tell you that personally I'm probably one of the most extroverted CIO's you're ever going to meet. My background isn't really technology. In fact, I have a degree in Economics and an MBA, but technology is absolutely ubiquitous today in the way we live and the way that we work. Everybody's dependent on it. And if they don't understand it then it's a little bit difficult to live with. But it turns out that's what really excites me, is to be able to, to drive transformation. Technology can really change business models. And it can open opportunities. I really wanted this job because Cisco as a company is prepared for transformational change today. We have some really exciting growth strategies. How we're going into different global markets, how we are going into new business models and really drive an enterprise scale use of communication and collaboration technologies, where we're really going in the data center. These are transformational opportunities for us as a business and IT plays a tremendous role in each and every one of those. And that requires different kinds of leadership skills and different kinds of communications skills in IT than we've seen in the past.

Peter Shaplen: If we were to create a pie chart in terms of the elements of IT, what would that look like?

Rebecca Jacoby: I would break the pie chart into three parts. First, is the basic operational functionality of your business. How are you running your transactional business? How are you running your basic communications systems? And how are you keeping the lights on every day to, so to speak? And today I think you'd see most IT organizations somewhere in the neighborhood of spending 55 to 65 percent of their budget on pure operational functionality in their business. The second area is really what I would call the category of business capabilities. How do you, on an ongoing basis, provide the new and growing business capabilities that your business needs? Most businesses today spend 20, 25 percent of their budgets on that kind of ongoing capability.

Peter Shaplen: Okay, so we have operational, 55, 65, business capability, 20, 25. What is the third and final slice?

Rebecca Jacoby: The high value slice for IT organizations is to be strategically involved in your particular company's growth strategies, to be investing ahead of the curve to enable your company's growth strategies, and growing into new markets. For IT to be involved early in the decision making process of how those strategies develop is something that can be very, very powerful in an organization. And not that many IT organizations spend a lot of their budget there.

Peter Shaplen: Well, without being an economics major I can see that there's a very small amount of that pie left. We're looking into what,15, 10?

Rebecca Jacoby: Ten to twenty percent depending on the type of company it is. What we're shooting for is an aspirational goal over the next 3-5 years from my organization -- to drive our architecture to a place where we could make it a third, a third, a third. So it only costs a third of our budget to drive an efficient operation of our basic business functionality, while we're participating in a faster and faster timeframe, providing business capabilities that the business requires today -- participating in the shaping of our growth strategies as a business. I'm looking for percentages that actually drive transformational change in our business. We may not make a third, a third, a third, but we're going to drive transformational change. And if we don't get all the way there that's not the important part. The important part is that we made a significant difference in the way we divide up that percentage.

Peter Shaplen: I'm sure there are a lot of CIO's and CEO's who are nodding their heads saying this is an aspiration. Gosh, I want to embrace that too. And then the next question in their mind is, how in the world do I do it? How do you say it so that John Chambers and the other Senior Vice-Presidents get it?

Rebecca Jacoby: The reality is John wants to communicate. And I think this is common amongst CEO's -- they want to communicate about growth strategies. So for him, to have an aspirational goal for success, that makes a world of sense to him. It's not a long conversation to convince him of that. The next thing is to take that next level of leaders and say, how do you really convince them? It's not just selling them on the idea; it's inviting their participation. That's how you really get things done, right? In our case we outlined five major points that we would focus on over the next 3-5 years. Top of the list is leadership. Who's on my leadership team? How do they engage with the rest of the company's leadership team? Second is globalization. How do we operate globally? How do I operate my own organization to service global customers? And then three major transformational areas that we're very focused on are our data center strategy, our commerce strategy, which is critical to most businesses, and then the most fun one is a strategic approach to communication and collaboration.
If I can enable those things, growth, innovation, and productivity, I'm going to achieve his goals. To have those things move and breathe with of course the network as the platform, is how we'll be able to move forward and enable our business.

Peter Shaplen: What words do you use to define an IT operation today, and how would you change those words looking forward three, five years out?

Rebecca Jacoby: Any IT organization will talk to you about their program lifecycle and the gates that you move through to introduce change into your systems. But if the way you're moving forward is completely centered around that then it's very limiting. The ways that IT organizations are effective are changing; they're talking about a general architecture. I have an architectural strategy and that architectural strategy includes all layers of technology moving together to create a specific experience for my clients and my customers. And you know that is my end game. I have an architectural plan and I'm giving you solutions in the context of that architectural plan. I'll revisit that plan as technologies and business opportunities cause me to.

Peter Shaplen: What has to be part of this new conversation in order to truly enable change through IT?

Rebecca Jacoby: You need to have a very technically savvy business leadership, but one that understands the value of technology. And your IT organization absolutely has to be business savvy. Each and every person in the organization has to be a better communicator. It's about accelerating the value of the IT organization and moving up this ladder from operational functionality to growth and to be strategically affecting your growth strategies. But it's also about having this opportunity to be the synchronizer for a business from a communications standpoint, and then stepping up to that opportunity and really providing big value to your business.

Peter Shaplen: You sort of were in a cat-bird seat to observe it perhaps more clearly because you did have an eye toward strategic growth.

Rebecca Jacoby: That's a great description -- of being in the cat-bird seat. There could be both positive and negative aspects to that. I believe that it's very important for the CIO to play that role. If you're going to make a systemic change, you have to have the knowledge of what the systems are and the input to that change and what systems you're going to effect. IT is sort of in a unique position to see where those connect points take place in the business across functions, across diverse businesses, and so on. And so stepping up to making those opportunities visible to your business partners is a key aspect of value.

Peter Shaplen: If your phone was to ring right now and it was John Chambers, what's the one question you most want him to ask you?

Rebecca Jacoby: I would want him to ask me, 'we need your help to really drive this growth strategy, a specific growth strategy.' Particularly if it's one that takes advantage of some of the really cool technologies that are available today like some of these collaboration technologies. 'We want you to lead this effort. You're obviously the people that know the most about it in the business.'

Peter Shaplen: And what would you say to him in response?

Rebecca Jacoby: Anything you want, John. (CHUCKLES)

Peter Shaplen: Rebecca Jacoby is Senior Vice-President and Chief Information Office at Cisco. Thank you for speaking with us.

Rebecca Jacoby: Thank you.

Peter Shaplen: And thank you for listening. An archive of this and other podcasts, both audio and video, can be found online at newsroom.cisco.com. I'm Peter Shaplen for Cisco.