Cisco vs Huawei Study
Case #1-0001
Cisco Systems (A): Evolution to E-Business
"We view the Internet as a prototype of how organizations eventually will shape themselves in a truly global economy. It is a self ruling entity." —John Morgridge, Annual Report, 1993 Cisco Systems, says president and CEO John Chambers, is “an end-to-end networking company.” Its products and services enable the construction of corporate information superhighways, a driving concern of today’s CEOs, seeking to become “e-business” leaders in their industries. Defining “e-business” can prove more difficult than embracing it, however. In executive programs at the Tuck School, Professor Phil Anderson frequently asks participants, “How will you know when you have seen the first e-business within your industry?” Typically, there is little consensus. Is it mass customization? Streamlined production processes? Oneto-one marketing? Cisco’s Internet Business Systems Group (IBSG), an internal consulting group, advises senior executives on information technology investment strategies. The group is closer to major corporate buying decisions than anyone at Cisco. As advocates for Cisco’s equipment, group members’ main struggle is identifying the benefits of becoming an e-business, which are wide, varied, and difficult to quantify. Additionally, the initial infrastructure investment is large enough to prompt many CEOs to wonder whether it’s really worthwhile to become an e-business. Trying to build a business case (calculate an ROI) for making a major IT investment can be an exercise in frustration. Says Sanjeev Agrawal, a director within the IBSG, “Can you show me the ROI of going to sixth grade? The amount of time it is going to take to try to go through the logic of that is not worth it.” The IBSG hopes that potential customers will look to Cisco as an example of how a company can make the most of information technology. In fact, Cisco has evolved successfully from a Silicon Valley garage startup to arguably the most
Cisco Systems (A): Evolution to E-Business
"We view the Internet as a prototype of how organizations eventually will shape themselves in a truly global economy. It is a self ruling entity." —John Morgridge, Annual Report, 1993 Cisco Systems, says president and CEO John Chambers, is “an end-to-end networking company.” Its products and services enable the construction of corporate information superhighways, a driving concern of today’s CEOs, seeking to become “e-business” leaders in their industries. Defining “e-business” can prove more difficult than embracing it, however. In executive programs at the Tuck School, Professor Phil Anderson frequently asks participants, “How will you know when you have seen the first e-business within your industry?” Typically, there is little consensus. Is it mass customization? Streamlined production processes? Oneto-one marketing? Cisco’s Internet Business Systems Group (IBSG), an internal consulting group, advises senior executives on information technology investment strategies. The group is closer to major corporate buying decisions than anyone at Cisco. As advocates for Cisco’s equipment, group members’ main struggle is identifying the benefits of becoming an e-business, which are wide, varied, and difficult to quantify. Additionally, the initial infrastructure investment is large enough to prompt many CEOs to wonder whether it’s really worthwhile to become an e-business. Trying to build a business case (calculate an ROI) for making a major IT investment can be an exercise in frustration. Says Sanjeev Agrawal, a director within the IBSG, “Can you show me the ROI of going to sixth grade? The amount of time it is going to take to try to go through the logic of that is not worth it.” The IBSG hopes that potential customers will look to Cisco as an example of how a company can make the most of information technology. In fact, Cisco has evolved successfully from a Silicon Valley garage startup to arguably the most