It pays to be brave - The Cisco approach

Working in the tech industry over the last month or so you can't have failed to notice John Chambers. The CEO of Cisco has been everywhere; he seems to be on a one-man mission to make Cisco the brand we associate most with the Internet of Things (or the Internet of Everything as Cisco has rebranded it).

According to Chambers the total economic impact of adding intelligence to the wealth of everyday objects stands at $19 trillion, already way up from the $14.4 trillion Cisco was estimating in Februrary 2013. This is more than the current GDP of the US but to my mind this isn't the most astonishing thing about this. What I find more fascinating is the way in which, quietly, without any of the usual bells and trumpets we expect from US CEOs, Chambers and his team have transformed the Cisco brand from a networking company to an information powerhouse.

What the Cisco leadership team understood is that tinkering with the brand wasn't going to cut it. The transformation that has taken place over the last five years has caught a lot of big tech brands out. EMC is still struggling with its storage legacy, Microsoft is having to cannibalise (and commoditise) itself to keep up and even the king of enterprise tech, Oracle, is trying to work out where its future lies. The fact is that it simply isn't about technology any more – it's about information and the insights that can deliver competitive advantage.

What Cisco is trying to do is what I have been telling CIOs they ought to be doing for the last two years. It has built a position for itself in which it becomes the purveyor of insight; the company that you can go to embed intelligence across your organisation and allow you to reap the rewards.

Let's imagine for example that you run a supermarket. In a world in which customer experience is king the speed with which someone can get from aisle to exit is critical. By embedding intelligent, networked sensors at store entrances and inside trolleys you can not only get a real time update on how many people are in the store but where they are going and how much they buying. By using that data to predict the flow of people to the check-outs (and how long they are likely to stay there) you can predict how many people you will need staffing the check-outs and even which type of check-out (self or manned) are likely to be in highest demand.

This kind of data isn't just useful for understanding and predicting customer behaviour it can help across all elements of organisation - from understanding what impacts employee productivity to improving supply chain efficiency. It can also help you identify all kinds of unseen relationships between data sets and events across the oragnisation.

What Chambers and co have also realised - and this is the really clever bit - is that selling the kit that makes all this happen is one thing, but actually the real value is in the data it delivers. The client doesn't care how it's done. They aren't interested in the bits and bytes. In effect Cisco isn't selling a product anymore; it's selling knowledge.

No one is going to pretend this is going to be easy. Cisco is a beast of a company employing thousands of people across the world and sitting at the centre of a complex web of partner and customer relationships. Moving to the insight layer is going to take time and effort and no small amount of re-engineering. However, as a statement of intent and a commitment to path for the future it is both brave and astute.

This is relevant to the CIO not just because of what Cisco offers but because in some ways Cisco demonstrates where the value of the CIO lies. As I have said many times in the past, the business that the CIO works for these days has absolutely no interest in the how, it just wants the what. As the person who holds the key to the technical infrastructure within an organisation, the CIO is now in a position to reap the rewards associated with the insights that an integrated and data-centric architecture can deliver.

So the CIO has a choice. There is the EMC approach (which is basically to replace some labels but effectively keep plugging the same old stuff); the Microsoft approach (end up commoditising and devaluing the very thing you have spent years selling); or the Cisco approach, which is to be brave enough to understand that the world has changed and that you will have to be brave enough to change with it.

Copyright © 2014 IDG Communications, Inc.

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