Cisco's Change in Information Technology Structure | Free Essay Example

Cisco’s Change in Information Technology Structure

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Topic: Business & Economics
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Introduction

Today, more than ever before, change is increasingly becoming a constant reality for any organisation looking to survive and thrive in these turbulent and uncertain times (Merrill, 2002), characterized by increasing globalisation, rapid pace of technological innovation, intense competition, new regulations, and shifting social and demographic trends (By, 2005; Carter, 2004; Guns, 2011).

As a direct consequence, effective management and implementation of change is becoming an important undertaking for businesses owing to the projections by academics that organisations that are highly effective in planning and executing change are 2.5 times as likely to outperform their less effective peers when it comes to bottom line performance and competitiveness (Merrill, 2002). The present paper aims to use Bullock and Batten’s Integrated Four-Phase Model to discuss the 2008 Cisco’s planned change in organisational IT structure, the value of this change, and ways that could have been used to improve the planned change.

How Cisco Implemented the Change

While Leifer (1989) cited in By (2005) perceives change as a normal and natural response to internal and environmental conditions, management of change is defined elsewhere “as a planned objective to change a company’s direction from the current to a desired future position in the business environment in response to new challenges and opportunities” (Hurn, 2012, p. 42).

These definitions perhaps best demonstrate the urge with which Cisco Systems Inc, an American multinational corporation headquartered in San Jose, California, set out to adopt innovative technology in its operations with the view to optimize IT services while minimizing costs and improving organization-wide performance and productivity (Cisco Systems, 2008). The firm’s change effort was triggered by new challenges and opportunities arising from the external environment, especially intense competition from rival companies as well as the rapid pace of technological innovation. It is important to note that Cisco had in excess of 65,000 employees operating in 300 locations spanned across 90 countries by the time it initiated the operational change (Cisco Systems, 2008).

In 2008, Cisco undertook to change its IT Network and Data Centre Services (NDCS) from using a traditional siloed organisational structure to Cisco’s own lifecycle model in an attempt to make the organisation’s operations more efficient and responsive to contemporary marketplace (Cisco Systems, 2008).

A siloed organisational structure ensures that operational activities reside entirely within a functional area and only supports objectives for a particular part of the organization (Olt & Trampas, 2007), meaning that the organization become less integrated, ambivalent, and more exposed to duplication of tasks. The life-cycle structure was an innovative model meant to enhance competitive efficiencies and minimize wastage and duplication of roles by ensuring all IT projects within NDCS followed a distinct process, which included preparing, planning, designing, implementing, operating and optimizing (Cisco Systems, 2008).

The present paper utilises the Integrative Four-Phase Model, consisting of exploration, planning, action and integration, to map out and critically discuss how Cisco went about implementing the change. Harigopal (2006) notes that“…the basis for the integrative model of planned change rests on the fact that an organisation exists in different states at different times and that planned movement can occur from one state to another” (p. 58). It is important to note here that Cisco’s change effort was planned by virtue of the fact that it moved Cisco from one ‘fixed state” (traditional soiled organisational structure) to another (own lifecycle model) through a series of pre-planned steps and actions (Cisco Systems, 2008).

The exploration phase of Bullock and Batten’s Model seeks to identify the problem and the critical issues associated with the problem (Bolman & Deal, 2008), as well as allocate adequate resources and commitment to undertake the change (Harigopal, 2006). It is this phase that helped Cisco realise that the traditional siloed organisational structure was not only causing duplication of effort and lack of focus across the organisation (Cisco Systems, 2008), but also strained the effective adoption of newer technology and made it difficult for the firm to compete favourably (Ramaswamy, 2010).

The planning phase “…commences once the problems facing the organisation are understood and the resources for OD are committed” (Harigopal, 2006, p. 58). In Cisco’s case, the problem had already been identified as loopholes caused by the traditional siloed IT organisational structure, and the management had demonstrated the need to commit adequate financial and manpower resources and commitment to migrate into a new IT organisational structure that not only allowed employees to focus on their core operational work (Cisco Systems, 2008), but enhanced the adoption of new technology and sustenance of competitiveness (Ramaswamy, 2012).

The objective was set to initiate the change intended to introduce Cisco’s IT lifecycle methodology, which provided the structure essential to make IT operations more cost-effective and responsive (Cisco Systems, 2008). In this context, it can be argued that Cisco’s change effort was transformative in scope as it was marked by rapid shift in the firm’s organisational structure (By, 2005), which was triggered by internal and external variants such as duplication of effort by employees, lack of focus across the organization, rapid technology shifts, and intense competition (Cisco Systems, 2008).

The action phase includes implementing all the processes and activities aimed at transitioning the entity from its current state to the desired future state (Harigopal, 2006). As observed by this author, “…the change activities are monitored and evaluated periodically to assess their progress and to check whether positive results are being achieved or whether they need modification and refinement.

Unlike in an incremental change whereby “…organisations and their people continually monitor, sense and respond to the external and internal environmental in small steps as an ongoing process” (By, 2005, p. 373), Cisco undertook to radically change its organisational structure from a traditional soiled organisational structure to the Cisco lifecycle methodology to make the organisational structure more efficient and responsive in its capacity to optimise technology services and resources, improve competitiveness, reduce costs and enhance organization-wide productivity (Cisco Systems, 2008).

The integration phase of the model entails “…making the changes part of regular organisational functioning after having successfully implemented and stabilized them (Harigopal, 2006, pp. 58-60). Cisco initiated the optimisation part of its new platform not only to uninterruptedly plan, design, and implement incremental enhancements to existing processes, but also to strengthen and inspire new behaviour (Cisco IT lifecycle methodology) through continued feedback, incentives and rewards. Cisco also used this phase to identify and resolve potential problems and improve IT staff skills to further enhance productivity and minimize inefficiencies in the new organisational structure (Cisco Systems, 2008).

Value of the Planned Change

Change is always a difficult undertaking for many organizations as available statistics demonstrate that 70% of all change efforts fail to succeed (Merrill, 2002). However, Cisco’s change effort acted as a binding and steering mechanism for Cisco to remain competitive and reduce structural inefficiencies by shifting people’s beliefs and attitudes to the status quo (Bamford & Forrester, 2003).

According to these authors, such a change initiative “…can hold events together long enough in people’s minds so that they do something in the belief their action will be truly influential” (p. 556). In this case, it can be argued that Cisco’s change initiative animated and oriented its leadership and employees to think beyond the traditional siloed organisational structure to a more modernised IT lifecycle methodology that was more efficient and responsive to the market (Cisco Systems, 2008).

Second, Cisco’s planned change effort acted to reframe the change context with the view to function and post results in stereotypical environments where resistance to change is expected (Burnes, 2003). Cisco undertook to engineer a transformational change in its organisational structure, and, consequently, resistance from employees was a natural consequence due to the scope and magnitude of this change effort (Carter, 2004). Dibella (2007) is of the view that when participants “…engage in a change they perceive as undesirable, they are unlikely to do so unwillingly or constructively and will often work at cross purposes with change advocates or stakeholders who view the change in more positive terms” (p. 236).

However, as is the case in Cisco’s change effort, change leaders can utilise change initiatives to generate images in people’s mind that would counter the undesirable perceptions and communicate a compelling vision of perceived desirability. In the design phase of the new organisational structure, for example, it was demonstrated how the intended change will reduce the duplication of effort among employees, and the positive impact that this capacity will have not only to employees but also to the organisation (Cisco Systems, 2008).

Additionally, available literature demonstrates that planned change not only sets a performance goal for everyone, but also accelerates the rate of attainment of set goals (Dibella, 2007). Cisco set out to achieve its change effort through distinct phases, which included preparing, planning, designing, implementing, operating and optimizing (Cisco Systems, 2008). However, the resultant organisational culture made the firm more efficient and responsive to the goals of optimising technology services and resources, improving competitiveness, reducing operational costs, and enhancing organization-wide performance and productivity. Such tangible objectives, according to Carter (2004), bring another value of planned change initiatives in that they enhance the value of stakeholders.

Lastly, a strand of existing literature demonstrates that planned change not only promotes learning and sharing of new ideas (Franken et al., 2009), but also improves execution of strategic change and sustains organisational success (Hurn, 2012). In the case of Cisco, this is clearly demonstrated in how employees benefited from IT skills and expertise, and how the organisation benefited from managing service support, service performance, service resilience, and managing change (Cisco Systems, 2008).

Ways to Improve the Process of Planned Change

Cisco’s planned change was largely successful as demonstrated by the dramatic improvement in the 2008 figures when compared to 2006. The organisation made improvements in managing service support, managing change, service performance, service resilience, and staffing and expertise (Cisco Systems, 2008). However, the planned change could have been improved by allocating more resources to internal communication frameworks.

As documented by Proctor & Doukakis (2003), effective internal communication in any change scenario improves the process by removing the fear of the unknown, availing information where it is needed, removing perceived threats to status and identity, minimizing the fear of failure among stakeholders, and demonstrating the perceived benefits of the change process. Indeed, “…good communication during change fosters understanding, aligns the organisation from top to bottom, and guides and motivates employees (Merrill, 2002, p. 20). According to Bolman & Deal (2008), ineffective internal communication is one of the major sources of resistance to change.

Additionally, Cisco’s planned change could have been improved more by undertaking sustained and focused employee learning and development. Indeed, employee development is critical in any change effort as it not only empowers the employees to be committed and motivated to the change process, but also provides them with the skills and expertise needed to make use of the effort (Smith, 2005). Merrill (2002) postulates that sustained and focussed employee learning activities can help push a change initiative along, primarily because employees need to have the knowledge and skills necessary to effectively adapt to change.

Moving on, organisations need to allocate adequate resources to implement new ideas, remove procedural obstacles, and enhance cooperation in the organisation to improve the process of planned change (Proctor & Doukakis, 2003). It is clear that Cisco had already allocated adequate resources and commitment to the planned change (Cisco Systems, 2008), but the company could have benefited more from enhanced cooperation from stakeholders as they negotiated the change process.

Cisco could have significantly improved its change effort by projecting a clear vision on the intents and objectives of the change with sponsorship from its top leadership as leaders not only inspire confidence in the planned change, but create clarity among employees and foster a sense of community (Proctor & Doukakis, 2003). Lastly, the organisation could have used a balanced set of metrics to define success and generate mechanisms to support continuous improvement so that future change of its organisational structure is undertaken on an incremental basis (Guns, 2011).

Conclusion

This paper has used Bullock and Batten’s Integrated Four-Phase Model and a multiplicity of change concepts to demonstrate how Cisco undertake a planned change from its traditional siloed IT organisational structure to its own life cycle model to minimize duplication of effort and minimize lack of focus across the organisation. The shift, which targeted Cisco’s IT Network and Data Centre Services (NDCS), not only triggered improvements in terms of optimising technology services and resources, but also enhanced competitiveness, curtailed operational costs, promoted organization-wide efficiency.

Additionally, the planned change occasioned considerable operations improvements across five diverse metrics, namely: management of service support, service performance, service resilience, and management of change (Cisco Systems, 2008). Additionally, the discussion has emphasized the value of planned change to include: acting as a binding and steering mechanism; reframing the change context to reduce resistance; setting performance goals and accelerating the rate of attainment, and; promoting learning and sharing of new ideals. Finally, it has been demonstrated how Cisco could have improved the change process through internal communication, employee learning and development, allocating adequate resources, projecting clear vision through leadership, and employing a balanced set of metrics to define success.

Reference List

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