| BUSINESSWEEK ONLINE : SEPTEMBER 13, 1999 ISSUE | ||||||||
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| COVER STORY
The Man Who Hones Cisco's Cutting Edge Since joining Cisco Systems Inc. in 1993, Peter A. Solvik has been working almost nonstop. The company's chief information officer has replaced every computer and every piece of software at the company--not once, but three times. He has installed complex financial and manufacturing software and built state-of-the-art Internet programs that give every Cisco employee, customer, and supplier instant access to its vast storehouses of data. That may sound like a nightmare, but the overhaul has given Solvik a starring role in the Internet Economy. With a strong mandate from Cisco CEO John T. Chambers, the 41-year-old Solvik has revamped Cisco's operations around Net technologies and created a blueprint for how other companies can do the same. The results are dreamy: Cisco gets 78% of its orders over the Net--some $30 million worth every day. Thanks to a Web site that's chock-full of information and free software, a remarkable 80% of customer-service issues are handled electronically, shaving millions off product support costs. Cisco's aggressive use of networking and E-commerce has boosted revenues per employee by 20%--to some $650,000 for each of its 19,000 employees. That compares with an average $396,000 for the S&P 500, and $253,000 for archrival Lucent Technologies. And the company has cut $1.5 billion in costs in the past three years. ''Customers come to us and ask 'How can we get that?''' Solvik says. It wasn't that long ago that Cisco knew nothing about such E-engineering. When Solvik joined the company after a stint running online businesses for Apple Computer Inc., he found a mishmash of computers and an isolated tech group that was treated as a cost center. He sacked most of the staff and got then-CEO John P. Morgridge to pump up tech spending. A year later, Solvik and Carl Redfield, vice-president for manufacturing, masterminded a top-to-bottom overhaul of Cisco's computers and software. It was a prescient move: Had Cisco kept its gaggle of systems, Solvik says, leaping into E-business would have been much harder. The overhaul was barely done, though, when a new tech wave hit: Web browsers that made getting information off the Net far easier. Just three months after Cisco had finished installing its new corporate systems in February, 1995, his team reworked the software to allow access via browsers. Now every part of Cisco has been ''Netized.'' Cisco recruits and screens job candidates over the Web. Managers can pull up staff records and information on competitors. And within a year, Cisco aims to become the first company in the world that can ''virtually'' close its books any day of the quarter to gauge financial results. PAPER-FREE. The Net also is woven deeply into Cisco's manufacturing operation. The company outsources most of its production to manufacturers like Flextronics Inc., and half of customer orders placed on Cisco's Web site flow directly over the Net to its contractors, who ship to the customer. For those orders, no Cisco employee ever touches a piece of paper until a check arrives in the mail to pay for the goods. Soon, with E-payment, even the check could become a thing of the past. Chambers is so taken with the results that he has made Cisco's E-business success story the heart of his sales pitch, since persuading other companies to mimic Cisco drives sales of its products. As for Solvik, he isn't resting on his laurels. He's now bent on setting up ''virtual'' Cisco teams that can work together around the globe, which could help cut overhead. Sounds like more nonstop work ahead. By Andy Reinhardt in San Jose, Calif. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 RELATED ITEMS Meet Cisco's Mr. Internet COVER IMAGE: Cisco TABLE: Building John Chambers' New World Network RESUME: John Thomas Chambers PHOTO: John Chambers with Son John on a Fishing Trip TABLE: Cisco's Stock Rockets TABLE: The Tech Industry's Cookie Monster The Man Who Hones Cisco's Cutting Edge ONLINE ORIGINAL: Cisco Could Be the Safest Net Play Around INTERACT E-Mail to Business Week Online | |||
