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Innovation at cisco

Innovation and creativity is the core ofciscos success

Risk taking, initiatives and responsibility is emphasised

Employees are passionate about staying on the leading

edge of technology New e business initiatives taken with a combination of

inspiration, creativity and study of latest technology

trends

Customer satisfaction through innovation is their ultimategoal

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Funding new e-business initiatives

Until 1993: Funding came through IT department

From 1993:

A system was created that decentralized IT investments

Objectives of IT department aligned with strategic goals of

the company

Client Funded Model:

business-unit manager was given authority to make

whatever expenditures were sensible to increase sales and

customer satisfaction

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Organization structure changed

e-business initiatives were all evaluated on the basis of

cost reduction, often overlooking impacts on sales,customer satisfaction, or employee retention

New funding mechanism reduced cost incurred

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Need for centralization in innovation

process

Innovation process is somewhat chaotic As the company grows, controlling the management

becomes more complex

Major challenges are staying connected and pursuance

of similar initiatives by different business units

New initiative generated within business units has very

narrow scope

For developing projects across business unit, Involvement

of senior executives to establish connection and to guide

the collaboration is required

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Three possible options for future

A Technology Research and Training Team

Centralized think-tank

A Venture Engineering Team Centralized technology research & implementation

team

An Internal Venture Capital Group Centralized technology business analysis and funding

team

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Technology Research and Training Team:

Keep employees cognizant of the current initiative and

ramification of those initiative

Wider scope of new initiatives

Complexity will be reduced

Help in developing as well as discovering new

Innovations which is ultimately beneficial to CISCO

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Measurement of innovative efforts and

compensation system

Innovative efforts:

Profitability- R.O.I

Maximizing shareholders value

Organizational culture

Compensation system:

Revenue system Earnings growth

Customer satisfaction

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Measurement of innovative efforts and

compensation system (employees)

rewards

efforts

Employees efforts to come up

with new e-business initiatives

should be well rewarded

It acts as motivation among

employees to come u with new

innovative ideas

Thus, resulting into a direct

proportion between rewards

and efforts