Value-added services are at the core of Cisco’s strategy from transforming itself from a box pusher into a solutions vendor. The company’s collaboration services provide a case study for how this strategy will work.
Cisco is on a self-described mission to transform itself from a box pusher, into a solutions vendor and trusted architectural adviser. Although its goal is certainly ambitious, such a transformation requires a big dose of high-value services—including many of the type of services that Cisco repeatedly emphasizes are the domains of its partners, rather than of Cisco.
Just how far will Cisco go in creating such high-value services and what role will they play in the company’s value propositions? Just as importantly, how will the company reconcile its rapidly growing value-added consulting line-up with its long-term commitments to delivering the vast majority of its services through partners?
The rapid growth the company’s Collaboration Services portfolio provides a valuable window into Cisco’s entire value-added services strategy. This article briefly profiles the role of services in Cisco’s collaboration value proposition and the range of collaboration consulting and hosting services it currently offers. Two additional articles will follow:
- One that examines the composition, growth and unique roles of Cisco’s two consulting organizations in bringing new services to market.
- A third that examines the role of these consulting groups in rolling new solutions out through and in driving success of Cisco’s channel partners.
The Critical Need for Collaboration Services
Collaboration is one of the largest, most strategic and fastest growing of Cisco’s 40 “market adjacency” opportunities, with its collaboration product line, consisting of products ranging from instant messaging and mail though Web conferences and Telepresence-based video, growing at about 25% per year. While Cisco’s enterprise customers are rushing to embrace collaboration solutions as a means of better engaging with customers and improving their own organizational effectiveness and agility, few of these customers are currently prepared to design or manage their own implementations. Fewer still are able to transform their processes and organizational cultures in ways that will allow them to derive optimal value from these solutions. A recent Cisco-commissioned study by the IESE Business School, for example, found that:
- Only one in seven companies has a formal process for managing deployment of social networking tools;
- One in five have policies in place for managing social networking; and that
- IT organizations are directly involved in only about one in ten implementations.
Business value assessments of collaboration implementations are often cursory, organizational ownership responsibilities are vague and integration with established enterprise tools and processes are limited And this does not even begin to get into the corporate culture and organizational model changes that are required to transform traditional command-and-control companies into agile, collaborative organizations.
Effective assessment, preparation, implementation and management, not to speak of effective use of these new tools, requires a broad range of expert services. However, as with most new IT and communications technologies, such skills are in short supply. Vendors who want to create a market for such tools must often develop and initially deliver such services themselves. Cisco is no exception.
Cisco’s Collaboration Services Portfolio
Cisco recognizes that customers need help through the entire collaboration planning and implementation process; from justifying business value and ROI, to understanding what tools are necessary and how they integrate with each other and into legacy environments, to planning organizational adoption and support and often, to managing the entire process.
The company has, therefore, introduced a services-led process to help customers plan for and address the business, as well as architectural and technical issues entailed in an enterprise-wide collaboration implementation. This five-step service-based process entails:
- Discovery Sessions and Collaboration Index, a Telepresence-delivered session designed to help stakeholders envision and prioritize the business benefits of different forms of collaboration within their specific organization and industry;
- Readiness Assessment, an online self-assessment tool that evaluates the organization’s current collaboration capabilities, assesses and suggests remediation measures for its network infrastructure, suggests program management and governance models and evaluates customer readiness;
- Collaboration Solution Design, which designs Cisco/Microsoft –based collaboration solutions that can be integrated with the organization’s current collaboration tools;
- Collaboration Infrastructure Deployment, which includes architecting and implementing an in-house solution or designing and planning a SaaS implementation; and
- Collaboration Strategy and Architecture, which develops detailed business and use cases, identifies the highest-value applications and users, outlines business process and cultural changes that will be required and defines a deployment program.
Cisco’s Services Collaboration Methodology, meanwhile, helps customer’s identify implementation and adoption challenges, suggests and helps them set up governance and incentive structures and define and implement required business process changes.
Cisco will then use its 800 Advanced Services collaboration specialists to design and implement the customer’s solution, train its staff to manage the system and support the ongoing operation with its 1,000 collaboration technical services specialists. (My June 6 blog will have more information.)
New Delivery, Payment and Optimization Models
Although the majority of Cisco collaboration solutions are implemented at the customer’s site, few IT organizations, as mentioned above, have the time, the people or the experience required to manage today’s sophisticated, mission-critical unified communications environments. Nor, in the current era of tight corporate budgets, can all corporations afford or justify paying for all of this out of increasingly tight capital budgets. Cisco, therefore, now offers a broad range of deployment and payment options. It can, for example, Build, Operate and Transfer (BOT) the system to the customer or deliver its collaboration software either as a managed service, or as software-as-a-service. It also now offers a broad range of payment options, including utility-based pricing.
Since Cisco initially expected these alternate delivery models to be attractive primarily to mid-sized companies, it designed them to be offered through third-party partners (see my upcoming June 13 blog). Much to its surprise, however, a rapidly growing percentage of large enterprise customers are also looking for these delivery options and some are insisting that Cisco deliver such services itself.
Cisco’s large, enterprise collaboration customers are also demanding that Cisco provide more than a new level of solutions and architectural consulting services and new, more flexible delivery and pricing options. They also increasingly require that Cisco tailor these solutions to the needs of their specific industry.
The company has been developing industry-specific sales skills over the last several years and has been rapidly expanding its industry-based services capabilities. It, for example, now has collaboration service specialists with deep focuses in industries including healthcare, financial services and education and now counts on highly specialized implementations in industries including pharmaceuticals, airlines, education and state governments for some of its highest-profile reference accounts. And, with Cisco services receiving customer satisfaction ratings of 4.6 out of 5.0, it appears that most are appreciative of the company’s increasingly sophisticated and specialized value-added services capabilities.