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Todd Elizalde Director, Internet Commerce

Todd Elizalde Director, Internet Commerce 1113_07F7_c1 Business to Business Electronic Commerce and Support 1152_04F8_c1 Agenda Internet Commerce Business Strategy Strategy & Goals Status & Future Direction CCO Demonstration CCO Business Impact Internet Commerce Business Strategy

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Todd Elizalde Director, Internet Commerce

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  1. Todd Elizalde Director, Internet Commerce 1113_07F7_c1

  2. Business to Business Electronic Commerce and Support 1152_04F8_c1

  3. Agenda • Internet Commerce Business Strategy • Strategy & Goals • Status & Future Direction • CCO Demonstration • CCO Business Impact

  4. Internet Commerce Business Strategy

  5. Cisco Order Management: 1995 FY95 Results * 80% orders entered same day * 60% booked/sched same day * 33% rework rate * $5M bookings/person * Satisfaction < 3.9/5.0 Customer Database Customer Service Sales Fax Fax

  6. Cisco Order Management Vision FY99 Goals * 100% orders entered same day * 95% booked/sched same day * < 1% rework rate electronically * $10M bookings/person * Satisfaction = 4.2/5.0 Database Customer Customer Service Sales Fax Fax

  7. Internet Commerce Strategy FY ’99/00 • IC Today • Order status • Pricing information • Configuration assistance • Order all products LOB Focused Commerce FY ’98/99 Integrated Ordering FY ’97/98 Internet Ordering • FY ’99 Goals • 730K IC transactions/mo • $2.5B Bookings (IPC/EDI) • $9B annualized run-rate • 4.35/5.0 satisfaction FY ’96/97 Commerce Agents “Old Way” Phase 0 Phase I Phase II Phase III Phase IV

  8. Internet Commerce Goals • Fiscal 1996 Goals • Automate 50% of standard queries • Increase customer satisfaction to 4.0/5.0 • Fiscal 1997 Goals • Automate 75% of standard queries • Automate 30% of Cisco order volume • Increase customer satisfaction to 4.15/5.0

  9. Internet Commerce Goals • Fiscal 1998 Goals • Automate 90% of standard queries • Automate 60% of Cisco order volume • Autobook 70% of Electronic order volume • Increase customer satisfaction to 4.2/5.0 • Fiscal 1999 Goals • Automate 80% of Cisco order volume • Achieve 90% autobooking of Cisco order volume • Increase customer satisfaction to 4.35

  10. Internet Commerce Applications • Ordering Tool • Invoice • Configuration • Pricing • Status • Contract Status • Service Order • Lead Times

  11. Phase I Status: Commerce Tools • Capabilities and statistics: • Status, pricing, configuration assistance available via Commerce Tools. • 90% of queries automated. • Customer satisfaction 4.3+ Cisco Has Established a New Benchmark in Delivering Customer Service… Catch Up, Anyone? —Dataquest Q4 ’98 40K 550K 4.2 Q4 ’99 53K 730K 4.35 Results/Checkpoints Registered Users Monthly Transactions Satisfaction Q4 ’97 16K 320K 4.1+

  12. Phase I Status: Commerce Tools • Invoice • Check status of invoice and account information • Configuration • Provides access to configuration rules across Cisco’s product line • Pricing • Enables users to search prices based on product family, product description, or product number with download capability • Status • Track progress and status of Cisco orders with electronic proof of delivery • Contract Status • Review contract information including service and support coverage and installation sites of contracted equipment

  13. Phase I Status: Commerce Tools • Service Order Submit • Submit and/or check status of service orders and receive information via screen, fax or e-mail • Service Order Parts • Access to Cisco’s Service Parts inventory list • Service Order Status • Track progress and status of service orders and review via links provided to Federal Express and UPS Web sites • Lead Times • Provides entitled users current lead times of Cisco products

  14. Phase I Status: Commerce Tools • Upgrade • Allows users under contract to submit online requests for software and hardware upgrades. • Notification • Proactive agent enables users to be automatically notified regarding order acknowledgements and pricing updates. • IPC Extract • Allows users to view orders submitted via IPC and download copies to their desktop for integration into their local reporting or purchasing systems.

  15. Phase II Status:Internet Ordering • Capabilities and statistics: • All Cisco products and services orderable via WWW and EDI • > $2.6B bookings in Q3 FY’99 • $10.2B run-rate ($28.1M/1200 orders per day) • Customer satisfaction 4.2 Cisco’s Online Sales Clearly Establish CCO as the Top Revenue Generator on the Web Today. —Communications Week Q4 ’98 1000 60% 4.2 Q4 ’99 1300 80% 4.35 Results/Checkpoints Registered Customer Sites Ordering Run Rate Satisfaction Q4 ’97 650 32% 4.1

  16. Phase II Status:Internet Commerce Benefits • Savings in productivity • 100% accuracy of orders placed through Internet Commerce applications • Many companies, as a result of accurate orders, increase their productivity by up to 20% • Faster product delivery • Domestic users have been experiencing an increase in delivery times by three to five days • International users have been experiencing an increase in delivery times by five to seven days • Large multi-country companies using Internet Commerce report a one week savings in lead time due to no rework

  17. Phase II Status:Ordering Tool • Features: • Configure, price, route, and submit online • Order routing enables network to route within users’ companies • Submit online and receive prompt confirmation of receipt • Utilize supporting applications for orders inquiries • Benefits: • Current configuration and pricing information results in less rework with improved lead times of two to three days • Control and manage ordering process with improved user productivity of 20% per order

  18. Phase II Status:Ordering • Q3 FY ‘99 Results • EMEA 83% • US 64% • Channels 67% • Asia 88% • Latin Am 96% • Cisco overall 76%

  19. May 1999 Registered Users 58,430 Total Inquiries 479,611 Order Status 264,524 CCO Internet Commerce Tools Usage

  20. Phase II Status:Partner validation Cisco Partner, Sprint “The error rate for orders processed prior to using the online ordering system was 20 percent. Today that has decreased to 2 percent.” —Frank Santafemia, Program Manager Sprint Corporation

  21. Phase II Status:Partner validation Cisco Partner Data Systems West “The configuration and pricing software within the ordering application reduces order errors to almost zero while reducing lead time. I would estimate an increase in productivity for the ordering process of 20 to 25 percent and, in the overall sales cycle, a productivity increase of 10 percent.” —Jamie Burton, Account Manager, Data Systems West

  22. Phase II Status:Partner validation Cisco Partner GE Information Technology “The configuration and ordering applications save me probably a couple of hours a day. Without it I’d have to fax orders in and confirm that they were received. Orders are configured correctly, which means we receive product faster. It’s a great tool, and easy to use.” —Barbara Cronin, Buyer GE Information Technology

  23. Phase II Status:Partner validation Cisco Partner Datacom Austria “It’s not only a time savings for me, but also for my colleagues who must enter orders into our computer system. It saves them several hours per week.” —Peter Pallwein, Purchasing Department Datacom Austria

  24. Phase III:Plans and Checkpoints • Integrated Commerce Solution: • Full integration with partner IT systems: partner enters order once! • Electronic orders 100% accurate via link with Cisco business rules etc! • 20% of Cisco’s Orders. Cisco Has Built an Outstanding E-Commerce Function in its Cisco Connection Web Site. —PC Week Checkpoints/Plans Cumulative Integrations Cumulative Bookings % Satisfaction Q4 ’97 0 0% — Q4 ’98 10-12 10-15% 4.3 Q4 ’99 20-25 25-30% 4.4

  25. Phase IV:Plans and Checkpoints • Capabilities: • “Reseller Marketplace” allowing resellers to price, configure and submit orders to distributors • “Configuration Express” tool allowing SP customers to pre-configure Cisco hardware before it leaves the factory. Cisco Has Sped so Far Out in Front with its Electronic Commerce Efforts that the Competition Can’t Even See Its Dust Anymore.—Internet Week Checkpoints/Plans Reseller Marketplace Bookings Configuration Express Orders Satisfaction Q4 ’99 20% 5,000 4.3

  26. CCO Demonstration

  27. Internet Commerce Business Impact

  28. May 1999 Registered Users 58,430 Total Inquiries 479,611 Order Status 264,524 CCO Internet Commerce Tools Usage

  29. May 1999 Registered Companies 1,432 Orders to Date through IC 446,416 Orders-per-Day Run Rate 28.1 Million Yearly Run Rate 10.2 Billion Satisfaction 4.13 CCO Internet Commerce 77% 76% 75% 74% 73% 72% 70% 69% 66% 64% 64% 57% 55% Percent of Usage

  30. May 1999 Registered Companies 1,432 Orders to Date through IC 446,416 Orders-per-Day Run Rate 28.1 Million Yearly Run Rate 10.2 Billion Satisfaction 4.13 CCO Internet Commerce Usage History 77 76 75 74 73 72 70 69 66 64 64 57 55 52 47 42 41 39 38 37 36 33 Percent of Usage 32 26 23 20 16 15 13 12 9 7 5 4

  31. CCO Internet Commerce Revenue 2.6 B 2.1 B 1.9 B 1.4 B 960 M 778 M 629 M 399 M 231 M 126 M Revenue 81 M

  32. Reg. User Satisfaction 4.21 Reg. User Satisfaction 3.4 May 1999 Registered Users 267,549 Questions Answered 80% CCO Logins and Satisfaction Total Logins

  33. SW Downloads Tech Support Applications CCO Software and Tech Support May 1999 Usage Software Downloads 380,318 Tech Support Applications 337,284

  34. + Very InnovativePractices CommerceCategory CCO Awards 1995 1997 1998 1999 Business 2.0 #1 of the 100 Hottest Companies on the Net 1996 New Media Invision Award

  35. 1995 70% Customer Service Representatives 15% Regular Order Entry 15% Temp Order Entry 1999 80% Customer Service Representatives 10% Temp Order Entry 10% Customer Business Solutions Employee Mix

  36. 1995 70% Customer Service 30% Order Entry 1999 80% Customer Service 10% Order Entry 10% Customer Business Solutions Where We Spend Our Time

  37. CBS Mission • Improve customer satisfaction by Identifying and implementing business process improvements to make it easier for strategic customers to do business with Cisco.

  38. Who are we? CBS - Global Alliances • Hewlett Packard & Earthlink • AT&T & EDS • Intel, Microsoft, Oracle • GTE • Alcatel

  39. Tactical -vs- Strategic CSR - Tactical • Action ---> Reaction • Order Management • Immediate Problem Solving • Transactional • Understand/Manipulate Order Process

  40. Tactical -vs- Strategic CBS - Strategic • Analytical ---> Proactive • Process Management • Planning • Multi-level Engagement • Understand Customer’s Business, Market, Competition and Cisco

  41. CBS - Goals • Achieve Customer Sat Rating of 4.3 • Implement a Internet Commerce strategy • Account Specific Business Process Improvement Goals

  42. Example Goals - Microsoft By close of Q4, FY ‘99: • Achieve Cust Sat Score = 4.6 • NC Order Submission = 50% • DSO < 30 days • Reduce Order Cycle Time by 60% • Reduce Recv’g Times by 90%

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