Going for the full Internet makeover: Members of the Internet Business Solutions Group at Cisco reveal how their consulting services drive business for the vendor

Going for the full Internet makeover: Members of the Internet Business Solutions Group at Cisco reveal how their consulting services drive business for the vendor – People & Management: Team Dossier

Ingrid Lunden

The Internet Business Solutions Group (IBSG) at Cisco, set up four and a half years ago, is a group of in-house specialists providing networking and information technology consultancy to clients in vertical industries such as service providers, retail and the public sector at the executive level.

The aim is to give companies some insight into Cisco’s own IT strategies and business models-and through this process the products and solutions it brings to market. IBSG’s 200 consultants worldwide specialize in areas such as supply chain management and workforce optimization. The group has also been helping to develop and refine Cisco’s IT strategies internally.

Which vertical sectors are currently showing strong demand for networking and IT solutions? Toby Burton. We’re focusing on the government sector worldwide–their budgets have not been hit as much as in the private sector. Local governments have been particularly strong. What’s interesting is that because the public sector doesn’t tend to invest quickly in IT, it now needs to upgrade antiquated systems and make a big step change. They’re looking at technologies such as IP telephony, and they’ve switched from being laggards to leaders. The pharmaceutical sector is also looking strong. One that’s still to come, but we believe will pop, is the insurance sector.

You don’t have sales bottom lines. How do you gauge your success?

T.B. We always have customer satisfaction surveys. We do also track the revenue contribution from our services, not because it’s essential but because it helps prioritize resources. Last year, we influenced $2.2 billion in sales for the company globally, so that was around 10% of Cisco’s sales.

Has the downturn affected customers’ strategies?

Fernando Gil de Benabe y Varela We do account in every quarter how our customer relationships are progressing.

F.G. Executives now are most worried about reducing operating expenditures, how can they do more with less while still getting closer to their customers. Two years ago. we began to work with Telefonica on an e-business strategy, involving supply chain management, customer interfaces, productivity improvements. They implemented 100 different initiatives with 200% re turn on investment within six months, so it paid for itself. They expect to get a 100-150-million dollar return in the first year alone. So even if the project began before the downturn, the investment will continue.

T.B. The focus among lour customers has become more directed. Before, people never thought about long- or short-term benefits. Now the focus is on core projects: how do we improve supply chain management, how do we transfer our workforce. They’re trying to get the basics right. Whereas in the past clients were into surface changes-putting the lipstick on the bulldog, so to speak–now they are interested in investing money in figuring out business processes. And how do you know whether your customers are benefiting from ISBG’s services?

T.B. We’re starting to look more at the customers’ success, their tangible benefits. Two years on. some of our customers are not prepared yet to say whether they have received the benefits of what they’ve invested in. Others have received quite clear benefits–such as Telefonica. They also have very different methods of accounting for return on investment.

How do team members based in different cities work together?

Michael Munro. Teamwork is always a problem when you have a small group. We need to share practices, materials. Putting Cisco’s network into use is of great benefit to us. We need to use secure instant messaging, Web casts, IP telephony and integration with collaboration tools to work more effectively

T.B. Our teams do work very closely with sales teams all around Europe. I think that people coming into our group from other consultancies are used to working in team environments.

How are your management skills transferred to customers?

T.B. One of the concerns we had with ISBG was that after two or three years the group would have become redundant, since we only work with Cisco’s top clients, and by that point all the skills would have been transferred. But with the pace of change both at Cisco and at those other companies, most assumptions have been blown apart. We try to push from one level to the next here as much as anywhere else.

F.G. Our consultants understand real business needs, not just networking needs, which is classically what you would associate with Cisco. This gives a new spin to what the markets are about and what our customers are asking for. They might tell us things that they would never tell to a sales rep.

T.B. Originally, we were constructed to give advice in one way: here’s what Cisco does, and here’s how it applies to your business. But customers have taken us into new areas. We facilitate forums between members of the businesses we consult. They look at e-business trends within the vertical markets in which they operate. They like learning from each other.

So competing companies are willing to speak to each other about internal business practices?

T.B. It’s really more of a handicap in the U.S., than in Europe where they tend to be more collaborative. The financial services sector works together to move forward in areas like standards and security.

M.M. The European model is typically more analytical. They like to get more benchmarking, more thinking about a problem before acting, compared to the American model, which is about just going out there and doing stuff. From a geographical standpoint, the U.S. is very spread out, but in Europe, the locations are more concentrated. When you couple that with the natural inclination to benchmark, it means more cooperation.

How does Cisco’s relationships with other consultancies like cap Gemini fit with the IBSG?

T.B. IBSG doesn’t charge for our services, and we don’t really have the manpower to implement any of the solutions that we consult on. Clients have asked us to implement solutions, and have even offered to pay us for it, but that’s not what we’re about. We rely much more on an ecosystem in which people work with us. We only have half or even a third of a person concentrating on a client.

F.G. The way we position ourselves with our customers is that we often say that clients should be working with a proper consultancy to implement all of the things we discuss with them.

Would you ever advocate e-business solutions involving non-Cisco products?

F.G. We expect the client to buy kit from Cisco, but our role is not tied up with sales. In the service provider market, it’s even more challenging, because, for example, Lucent and Nortel have been the traditional suppliers, and we don’t have as big a piece of the market as they do. We know that they’ll still be buying kit from Nortel and Lucent but what we want them to acknowledge is that they are succeeding in some of their business goals thanks to Cisco.

T.B. Our global leader, Sue Bostrom, reports directly to chief executive John chambers, not to the head of sales, so that’s one way of keeping what we do separate from that side of things. And when we are setting up what the proposition is to the customer, they are very well aware that our goal is to help them buy more Cisco equipment.

M.M. Frankly, if we don’t make that explicit, the client comes back right away and says. “Why are you telling me all this? What’s in it for Cisco?” So we make it clear we are there as a trusted advisor. It’s up to sales to distinguish why Cisco’s equipment is better than other’s. Most of the things we consult on have nothing to do with the network. From an IBSG perspective, it’s really about workforce optimization and business processes.

How do you see the future for the Internet sector?

F.G. I am sure the craziness of two years ago will not return. We have to separate the dot-coin crash from the Internet revolution. We won’t see the former one again, although we firmly believe the latter is here to stay.

T.B. We had analysts in here the other day who said we’re returning back to boring, and I think that’s what it’s going to be.

RELATED ARTICLE: Toby Burton Vice President, Internet Business Solutions Group EMEA, based in London. Burton came to Cisco from PricewaterhouseCoopers, where he developed the consultancy’s e-commerce practice in Europe.

Fernando Gil de Bernabe y Varela Managing Director for Service Providers, based in London and Barcelona. In charge of the vertical telecoms sector in the group, Mr. Gil de Bernabe had been an associate director in the telecommunications, information technology and media practice of Arthur D. Little in Silicon Valley.

Michael Munro Solution Manager, EMEA, came to London from the U.S. nine months ago. He looks at Cisco’s internal practices and applies them to external organizations. American-born Munro came to Cisco from Gartner Group/Dataquest.

Personnel Briefing

* Graham Ward has been appointed the chief executive of Pervasic, a wireless data service provider based in London. He was formerly managing director of Vodafone Corporate Ltd., the mobile operator’s enterprise sales channel. Pervasic’s current CEO, Mark Potts, becomes chairman and chief officer.

* Steve Goggiano is the new CEO of CoSine Communications Inc., a network equipment provider. He had been the company’s president and chief operating officer and is replacing Dean Hamilton, who has resigned to pursue other opportunities.

* Ian Montgomery is the new sales and marketing director for Urband, a joint venture between Thames Water and 186k. He comes from Telewest, where he was head of market management.

* Martin Browne is new head of strategy at Azure, a revenue assurance specialist being incubated within the Brightstar initiative at BTexact, the research and development wing of the U.K. operator. He joins from TelesensKSCL, a billing solutions provider.

* Michael Lach was named chief operating officer of NeuStar Inc., in charge of its numbering and registry services business. He was president of network and systems at Winstar Communications, which filed for bankruptcy in April 2001 and was acquired by IDT in December.

* Ronald Zarrella has joined the board of directors at Avaya Inc., the telecoms equipment maker. He is the chairman and CEO of Bausch & Lomb.

* Bill Davidson has been named vice president in charge of carrier relations for Internet services at Qualcomm Inc. He had been a vice president at Aether Systems Inc.

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