Moments ago, we announced that Cisco Systems IT won top honors in the SOA Consortium | CIO magazine case study contest. Highlights from the Cisco IT Case follow.
Company Background
Cisco Systems, Inc. designs, manufactures and sells hardware, software and services to create Internet and networked based solutions.
Business Scenario
Inconsistent, Disconnected Business Processes: Cisco’s legacy infrastructure had more than 400 diverse applications, many of which supported products and services that had been developed and acquired over the years. Consequently, several core business processes such as product ordering and pricing were becoming inconsistent, monolithic, complex, and inflexible to change. A lack of comprehensive end-to-end monitoring was also a concern.
Disjointed Customer Experience: While customers could initiate nearly all their orders electronically, most still required employee assistance for completion. Customers also had to use multiple online applications. The overall customer experience was far from unified, essentially impeding the flow of company revenue. Numerous initiatives were underway to improve the situation, further complicating the process.
Quest for Unified Customer Experience: Cisco wanted to create a consistent, unified ordering experience for users of its online commerce applications. Ideally, customers, partners, and sales representatives could visit a single Cisco site to securely register an opportunity, configure products, place and track orders, renew maintenance agreements, or evaluate leasing options, all from a unified interface. Cisco also wanted to improve operational efficiency by reducing the number of online transactions that required human intervention.
Commerce Transformation Initiative: The aptly named “Commerce Transformation” initiative is based on SOA principles that have allowed Cisco IT to create a solid architectural and technology foundation for both existing and future application development. Commerce Transformation was chosen as a key proof point for SOA adoption for several reasons. Support for large business priorities was driving significant IT application investment. Numerous business capabilities were identified that would be ideal as reusable services - and the IT organization was ready to embrace SOA principles. Cisco also wanted to achieve differentiated business capabilities to maintain its leading market position.
Early Use Case: Since most of Cisco’s revenues come through partner channels, one of the first projects developed within the Commerce Transformation initiative was the Partner Deal Registration (PDR) application. Before PDR was developed, application access to business services such as pricing and configuration resided behind Cisco’s firewall. This required Cisco employees to manually help partners integrate these services into their systems, prolonging deal cycle times.
PDR was designed to give partners secure access to Cisco pricing concessions and programs, leveraging reusable enterprise-class business services such as corporate pricing, configuration, and partner profiles that were coupled with flexible business rules for price lists, contractual discounts, and promotions, among others. Existing functionality such as pricing could be wrapped into a reusable business service that partners could easily incorporate into their own processes. Granular services could then be combined to provide composite services, with the ultimate goal of an agile Business Process Management (BPM) implementation. The expectation was that developers could effectively combine services to quickly offer new value-added capabilities.
At the same time, this approach would ensure that key business services were available consistently and securely across the enterprise and would simplify their incorporation into partner commerce portals.
ROI
The Commerce Transformation initiative is already delivering scalable solutions, enhancing customers’ experiences, and providing the partner ecosystem with secure access to business services like pricing, promotions and configuration tools. It also allows Cisco to more easily and cost-effectively support new business models and enter new markets.
The solution leverages reusable enterprise-class business services such as corporate pricing, configuration, and partner profiles, coupled with business rules such as price lists, contractual discounts, and promotions.
Key benefits achieved from the PDR project:
- Improved process agility: The way quotes are priced can be rapidly changed, enabling processes such as stacking discounts and promotions.
- Growth: There has been steady growth in the number of partners, deals, and bookings. Six months after initial project rollout, the system had more than 9,000 partner users worldwide and had processed 37,000 deals worth $1.2 billion. Nearly a year later in June 2009, there were close to 20,000 partner users, and 56,000 deals worth $3.92 billion net had been processed.
- Productivity: Deal cycle time has been reduced by 50 percent, allowing sales representatives to focus on providing customers with value-add solutions and services. The volume of time consuming non-standard deals has shrunk by using upfront pricing and incentives. Since the project’s pilot rollout in September 2007, the company has realized estimated savings of $12.7 million through improvements in discounting trends and reductions in non-standard pricing. More than 18,000 man-hours of productivity have been gained by eliminating unnecessary administrative tasks for field sales team members.
- Detailed tracking: A SOA dashboard provides deep visibility into service usage and delivers data that enables service architects to continually improve services.
- Improved customer experience: The number of clicks and time to place an order have been reduced. Users receive consistently correct pricing regardless of quoting or ordering process, making it easier to conduct business with Cisco. Pricing functionality can be smoothly integrated into partner systems.
- Increased back-end efficiency: Almost 70 percent of quotes are processed with no human intervention. The pricing service is now centrally managed to reduce overhead. Business Rules Engine integration provides faster, more accurate decision-making.
- Faster time to market: The reusable pricing service improves time to market as the company sells into new markets and embraces new business models.
- Better compliance: Built-in compliance processes provide the required audit trails.
Partners now have self-service access to incentive programs, promotions, and return merchandise credit capabilities that previously required direct contact with a Cisco salesperson. Quotes initiated by partners through PDR can now be shared with Cisco sales representatives using Salesforce.com for further opportunity collaboration, increased productivity, and reduced cycle time. The PDR application has been localized in 15 different languages in 150 different countries around the world.
Project Organization
Boards and Councils: Cisco’s “boards and councils” governance model was critical to the success of the Commerce Transformation initiative. Cross-functional councils comprising business and IT leaders were tasked with the planning and execution of an integrated capabilities roadmap. The roadmap was developed collaboratively across teams representing different functional groups, initiatives, and capabilities.
Before the roadmap was defined, pricing capabilities were spread across multiple IT and business organizations. To provide reusable SOA-based pricing services that could be used by the PDR and other applications, the councils had to identify business rules and processes that led to the definition of a target pricing service.
SOA Project Team: Once the roadmap was finalized, a SOA project team consisting of their Enterprise Architecture team, Business Architects and IT Architects evaluated the use of SOA. As functional, operational and compliance requirements were assessed, the need for a companywide SOA platform was established. Several areas of concern associated with developing pricing as a set of business services were identified, including availability, performance, security, operational excellence, and governance. The team also evaluated existing capabilities and gaps in technology.
SOA Framework & Platform: Working closely with their business and IT counterparts, the EA team began building a framework for the identification, creation, reuse, governance and monitoring of services and composite applications. The SOA platform and framework were developed by matching Cisco’s business needs and long-term strategy with products and solutions available in the market. This early work greatly streamlined the implementation of new capabilities for many other teams within Cisco and generated positive feedback from business stakeholders.
Center of Excellence: The EA team acts as the Center of Excellence for SOA and BPM and is responsible for building the foundation for all current and future SOA and BPM initiatives. They focus heavily on the areas of concern identified during the SOA assessment to ensure a solid foundation for enterprise-class business services.
Lessons
- SOA is not about technology, but rather how you implement, operate, and govern it. A large-scale enterprise SOA rollout requires maturity from people, processes, and technology as well as grassroots-level adoption.
- SOA and BPM go hand-in-hand. Plan for it in advance.
- A combination of iterative top-down and bottom-up approaches results in faster realization of SOA benefits.
- SOA introduces additional challenges with distributed business services. The SOA technology platform must be architected for the enterprise rather than focusing on a project-by-project basis.
- The organizational model of councils, groups and collective decision-making was initially painful but important to the success, funding and adoption of this project.
- Initial success stories go a long way in creating awareness, confidence and enterprise adoption of a SOA platform. The team has seen tremendous adoption of the SOA platform after the initial success of the highly visible PDR project.
- High availability, performance and end-to-end visibility of services infrastructure are paramount for long-term sustainability of SOA-based solutions.
- When you are a large company, most of the benefits will come from volume, so target simple things (services) with high volume.
- Governance is most needed when you are about to be most successful. If you don’t have it, you will fail.
To learn even more about Cisco’s SOA approach, check out this podcast of Lead Architect Harvinder Kalsi, recorded at the December 2008 SOA Consortium meeting. Don’t have time for the podcast, at a minimum grab the slides. The service lifecycle approach slide is outstanding.
[Disclosures: The SOA Consortium is a client of my firm, Elemental Links. I was a contest judge.]
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