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Analyze This!: ‘Shareholder engagement’ keys analytics teams’ success at Cisco

March/April 2011

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Vijay Mehrotra

By Vijay Mehrotra

To understand what analytics in a large organization looks like, I recently paid a visit to Cisco. I had several reasons for choosing Cisco. To work at Cisco is to live with constant organizational change, as the company has acquired and integrated 144 other firms [1] since 1993, stitching them together to form an increasingly broad set of products. The company now has more than 300 different families of products comprised of over 65,000 different parts that are produced by more than 1,000 different suppliers, with contract manufacturing partners and distribution operations across the globe.

I was also motivated by some ancient (at least by Silicon Valley standards) history. When the music abruptly stopped playing at the end of the Internet bubble, Cisco ended up with roughly $2.25 billion in unneeded parts, as its overly optimistic forecasts collided with a precipitous drop in demand. Given this history, it is certainly no surprise that (a) there is significant investment in supply chain optimization at Cisco, and (b) demand forecasting is still a big part of the action.

But, as I learned during my recent visit, to focus only on traditional supply chain analytics is to miss much of the story. Given the complexity of Cisco’s ecosystem, a huge amount of effort and investment is required just to attempt to extract value from the mountains of data captured by the company. In visiting with members of the Customer Value Chain Information and Data Strategy (CVC IDS) group (led by Anne Robinson) and their close partners from the Customer Value Chain Information Technology and Business intelligence (CVC IT BI) group (led by John Buffi), I met a diverse group of intelligent professionals who are on a journey to turn the theoretical concept of an “information value chain” [2] into a business reality.

I came away from our meeting with a sense that the mission and challenges for analytics at Cisco were much broader than I had imagined. With a combined total of just 23 people, IDS and IT BI have as their internal customers more than 9,000 knowledge workers in the Customer Value Chain Management (CVCM) organization. CVCM’s scope of responsibilities includes collaborative planning, new product introduction, sourcing and supplier management, manufacturing, order management, delivery, corporate quality and quality management, all of which adds up to a voracious need for all sorts of data and analytics.

Several themes emerged during my visit. First of all, there are a lot more resources focused on data management and data quality than I had imagined. As a fellow industrial engineer/management scientist, Robinson had warned me about this, but it was still eye opening. In my experience working in smaller organizations and consulting firms, those conducting statistical analysis and/or building mathematical models are often responsible for much of the associated data extraction, quality checking, aggregation and other “pre-processing.” By contrast, the two groups I met with featured talented BI strategists, architects and developers, enabling others in the IDS group and many more across CVCM to focus on the specifics of their analyses.

Secondly, Robinson’s group sees itself as enabling CVCM to become a more data- and analytics-driven organization. Significant time and energy is invested in supporting the effective use of data warehouses and analytic tools by people in a wide variety of roles across the broader CVCM organization, including manufacturing managers, demand planners, marketing product managers, quality specialists and process owners. These efforts include not only training and documentation but also user groups, knowledge bases and help desks. All of this is intended to increase adoption and create champions for the group’s work. Given the size and diversity of the population served by Robinson’s group, this seems in retrospect like an obvious strategic choice – but a challenging one to implement successfully, especially in a company this large and distributed. Success seems to depend heavily on the close collaboration between Robinson and Buffi’s teams.

Thirdly, there is a mindset of innovation that permeates both teams. Our discussion was sprinkled with references to plans for advanced hardware and software technologies to manage the constantly expanding needs for data across CVCM. There were also interesting discussions about innovations such as utilizing social media to disseminate information, capturing and storing data about video images, and distributing canned models and solutions to a broad population across CVCM in more efficient ways. These folks clearly spend a lot of time engaging with key CVCM stakeholders trying to understand their problems, developing and deploying prototype solutions, and getting feedback to further clarify what the business needs really are, all the while thinking of new and better ways to address them.

Finally, there is the always-important matter of senior management support. In the past, analytics professionals have often made the mistake of thinking that their funding came either by divine right (“of course our work is invaluable”) or by dumb luck (“we happened to bump into the right person and she totally ‘gets it’ ”). By contrast, these teams have been successful within Cisco because of their regular outreach across CVCM – indeed, the phrase I heard most frequently during our meeting was “shareholder engagement.” That these teams have had consistent and increasing financial support over the past three years despite the difficult economic conditions is the strongest measure of how just how much sweat equity they have built up.

At the beginning of our meeting, one of the professionals within IDS provided a brief description of how Cisco’s operations have evolved over the past two decades, growing from manufacturing operations to supply chain optimization to customer value chain management. Along with this evolution, the growth in analytics has steadily increased in size, scope and visibility. I will look forward to coming back to visit again in a few years. Based on this visit, I am confident that analytics will be thriving at Cisco for a long time to come – though I am not quite sure what the company, or the analytics groups, will look like when I return.

Vijay Mehrotra (vmehrotra@usfca.edu) is an associate professor, Department of Finance and Quantitative Analytics, School of Business and Professional Studies, University of San Francisco. He is also an experienced analytics consultant and entrepreneur and an angel investor in several successful analytics companies.

REFERENCES

  1. For a full listing of Cisco’s acquisition history, see http://www.cisco.com/web/about/doing_business/corporate_development/acquisitions/ac_year/about_cisco_acquisition_years_list.html
  2. See, for example, http://www.informationvaluechain.com

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