1.

Cisco Systems: Value Chain

Technical Sales
Complex System
Configuration
and
Specifications
of Network
Systems
required by
Customers
Outsourced
Manufacturing
Incoming Orders
broken down to
component
level given to
each
Subcontractor
Assembling,
Testing and
Shipping the
final product
After Sales Support
Heavy dose of
technical
support
required due to
very complex
network
systems
required by
customers
Training & Jobs
Recruitment
Reimbursement & Travel
R & D & CRM
Core Competency
Global Spread
Financial & Operational Reporting
$3bn Company
6000 man days for a quarter
reporting
High
Cost
No
Differentiation
High Cost & No
Differentiation
Value Chain Competitive Advantage
Technical Sales
Web Based Self
Configuration
Ordering System
Benefits:
Large Savings in
Selling Expenses
Pre Net era:
33/100 orders
incorrect
Post Web: All web
based orders
correct (80% of
total orders in
99)
Outsourced
Manufacturing
Web based
dynamic
replenishment
system
Benefits:
50% of the Cisco
Orders were
transmitted to
fulfilled by
subcontractors
without Cisco
employee
touching a piece
of paper (late 99)
After Sales Support
Web based
technical support
and
troubleshooting
Benefits:
From 94 to 99
Sales up 6x,
Support Staff up
2x
Customer sharing
experiences with
each other over
web creating pool
of knowledge
Training & Jobs
Reimbursement in 2 days
Online training facilities from
employees to channel partners
R & D & CRM
Cross Border Collaboration

Financial & Operational Reporting
Quarter closing of books in a day
Faster response since all time data
availability
Use of manpower in more strategic
tasks.
Low
Cost
Differentiation
Differentiation
& Low cost
2. GIC : Value Chain
New Customer
Application Process
Staff
Segregation
based on
Insurance
Policies
Manual
submission of
application
forms

Processing &
Warehousing
Manual Filing of
documents

Physical Storage
of documents

Cash & Cheque
processing
Claims & Renewals
Manual
Accident
Intimation
System within
certain time
frame

Physical renewal
processes
High
Cost
High Cost & No
Differentiation
High
Cost
2. GIC : Internet Implementation
New Customer
Application Process
Online
submission of
application
forms
Staff
optimisation
Online
verification with
rider clause

Processing &
Warehousing
No manual
Filing of
documents

Online Storage
of documents

Online payment
processing
Claims & Renewals
Automated
online
intimation
service

Online renewal
processes
Low
Cost
Low
Cost
Differentiation
& Low cost