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

CommunicationsWeek International, March 18, 2002 by 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?