1. Going Global:
A two step approach
to Scalability and Growth
Petra Williams, Senior Global Controller
Former Finance Transformation Lead, Cisco Systems
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 1

2. Agenda
 Introduction to Cisco
 Overview of Finance environment
 Changes necessary to align with Business
 View on our latest evolution
 Questions
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 2

3. The Cisco Vision…
Changing the Way We
Work, Live, Play, and Learn
Work Live Play Learn
to shape the future of the Internet by
The Cisco Mission… creating unprecedented value and
opportunity for our customers, employees,
investors and ecosystem partners
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 3

4. Challenges to Finance at Cisco
1991-2000 2005-2008 2012
• Company growth • Re-ignite Sales Growth • Busy in BRICs
(56% CGR) • Emerging Markets • New Business Models
• Acquisition activity • Acquisitions restart
(over 80)
2000-2004 2009-2011
• Slowing economy and • Global Markets Slow
changing
market conditions
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 4

5. As we moved past 2005 other Cisco forces began to
shape how we organized for the future
 Cisco growth +15%: evolve organization to enable and sustain
growth
 Emerging Markets growth 35% +: develop long-term solutions for
global scalability
 Increasing business complexity: more diverse customer,
product & geographic mix
 Organization realignment to address customers holistically
 Cisco evolving: globalization, regulatory requirements, emerging
markets, business model, mergers and acquisitions
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 5

6. Where were we by 2005?
 Finance organised by Region
 ERP instance per region
 Systems only processing US GAAP
 People based in country in traditional model
 Variety of local in country processes, often manual
Needed a SCC to help scale to changing business cycles
and cope with economic challenges and business
opportunities brought by organic or acquisition growth of
the future
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 6

7. Finance and Accounting Shared Services Today
Record to Report
(R2R) Quote to Cash (QTC)
F&A combines our
 GL accounting functional, process, and
geographic expertise to  Billing
 Fixed assets and  A/R
provide integrated best-in-
other B/S
accounting
class service offerings  Collections
 Statutory reporting
 Royalty accounting Delivering to Cisco's
multiple lines of business
Procure to Pay (P2P) Hire to Retire (H2R)
Enabling ―Support the
Business‖ growth in  Payroll
 PO & VM
scalability, quality and  Stock Administration
 Accounts payable productivity
 Expense
management
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8. What Did we tackle first?
Phase I - Regional Shared Service Centre program (May 2006)
 Rebuilt ERP platform for Established Markets
 Six Sigma review for systems deployment in Emerging Markets
 Process centric methodology, simplification and alignment
 Split of Front Office and Back Office, Dedicated Deals desk and
Revenue teams, new verticals for SSC tracks
 Creation of Business Partner Finance Manger Role
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 8

9. Location Evolution: Phase 1 - Regionalisation
Amsterdam
San Jose Tokyo
Singapore
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10. Global Center Enabler
Prior state GC Creation
 High cost  Centralized delivery in lower cost
location will help F&A become
Efficiency  Too decentralized
more cost competitive
 High cost locations
 Reinvest savings into further F&A
improvements
 Service quality and customer  Drive more consistent, satisfactory
sat in need of improvement service experience
Effectiveness
 Inconsistent service  Allow non-GC resources to focus
experience on more value-added activity
 Too much non-value added  Better controls & risk management
activity through centralization
 FASSO capabilities has not  Catalyst to drive common
Flexibility / kept pace with growth & business architecture scaling to
Scalability increasing business meet Cisco‘s growth and
complexity increased business complexity
 >50% of work focused on non-  Leverage & integrate future
transaction processing investments more quickly and
 Emerging Markets not scalable effectively
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential  Enabler for Emerging Markets 10

11. The Steps To Globalization…
Define Model
Define the Strategy Gain Sponsorship
Criteria Defined
Select Vendor
Contract Negations
Implement Plan Project team
Enable with people, processes and
infrastructure
Operations Center
Stabilization
Web 2.0 and Collaboration
Operationalize Operational Metrics
Governance
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 11

12. Hybrid model (Managed Captive) was the
Best Option
In-house Hybrid (Managed Captive) Outsource
Model:
= Cisco controlled Mgmt Mgmt Mgmt
= 3rd party
controlled
Functional Functional Functional
supervisors supervisors supervisors
Individual
Individual contributors Individual contributors
contributors
Description:  Build and operate Global  Operate Global Center internally  Transfer responsibility for
Center internally  Use 3rd party to provide majority operations to a 3rd party
of staffing and help develop  Manage to a service level
Global Ctr (‗managed captive‘)
Financial:  Highest savings and  High savings and investment  Moderate savings and
investment investment
Non-Fin  Slow to implement due to  Faster since leverage vendor  Fastest option leverages
benefits: mgmt time required; little capabilities; high vendor capabilities
capability/scalability scalability/flexibility with option to
improvement bring work in & out
Risks:  High risk: No management  Medium risk: Must manage  High risk: Lose control / must
experience transition and remote operations manage transition & supplier
through GSD‘s ―in-between‖
position
Hybrid model (Managed Captive) offers best mix of
Presentation_ID
savings, other benefits & risk
© 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 12

13. Key Transition Elements
Stabilize &
Knowledge Transfer/
Planning Improve
Implementation
Center
Planning & PMO Knowledge Transfer Stabilize
& Improve
• Establish PMO • Establish knowledge Transfer process:
• Develop detailed plans - Documentation requirements:
• Establish on-going
• Kick off project - Current state
center policies &
• Project oversight - Future state
practices
- Define service levels
• Ongoing training
- Training requirements
HR/OA • Institute quality
- Transition of work
framework and teams
- Transfer of documents
• Develop HR strategy • Test DRP and BCP on
• Develop comm strategy Implementation routine basis
• Set up HR function in new
• Set up new facilities:
center
- Define facility requirements :
• Build culture in new center
- Secure and build out new facilities
• Separation support in
- Acquire & set up office equipment
existing locations
• Set up tech. infrastructure
- Design/define requirements
- Acquire equipment
- Build out & test
• Wind down existing facilities & technology
Program Management Office (PMO)
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved.
HR / Organization Adoption
Cisco Confidential 13

14. Multi-Wave, Accelerated Transitions
2008 2009
FUSION Transition Overview Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Process Tower Gantt Chart End
year
Wave 1 I2P
Wave 1.0 India
Wave 1.1 Singapore
Wave 1.2 USA
Wave 1.3 Europe
Wave 1.4 Tokyo
Wave 1.5.1 (A) CEE, MEA & Small Euro
Wave 1.5.2 (B) LATAM
Wave 2 I2C
Wave 1.0 Singapore
Wave 2.2 Tokyo
Wave 2.3 USA Volume Ramp
Wave 2.4 Europe
Wave 3 R2R
Wave 3.0 India
Wave 3.1 Singapore
Wave 3.2 Tokyo
Wave 3.3 Europe
Wave 3.4 USA
Wave 3.5.1 (A) CEE, MEA & Small Euro
Wave 3.5.2 (B) LATAM
KT Planning
Job Shadowing/Remote KT (for EM and US R2R Waves)
Delivery Center Training
Coaching/Stabilization
Go Live
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 14

15. Phase 2 – Globalization .... A New Delivery Model
Four Established Shared
Services—Regional Centers
 High touch
 Statutory Theater/Country
requirements
 Localization Services and
Support
Amsterdam
 Provides multiple language
San Jose Tokyo support capabilities
Bangalore
Opened Fifth Shared Service
Center—Global Center
Singapore
 Co-managed by Cisco and
Partner
 Driving efficiency to enable
scalability
 Provides multiple language
support capabilities
 Global Process Ownership
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 15

16. Vendor Selection – Lessons Learned
 Staying Aligned to Business Strategy
 The up-front work of identifying the problem and defining the
objective helps keep everyone focused
 It takes a strong team – commitment, open mind, communication
 Leverage makes a difference
Playing position
Knowing each others role & playing to strengths
 Executive Support & Trust
On-going Communication
Keeping on task & Keeping to the facts
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 16

17. Key Lessons Learned
 Joint theatre-level transition management and business
process leadership
 Retained team planning (Org charts, leveling reviews, job
descriptions)
 Well designed and orchestrated global communication and
announcement
 Knowledge transfer & training curriculum maps
 Leverage global, standard DTPs, technology solution /
platforms to minimize gaps and adhere to the standard
 Governance Structure – clearly defined; detailed walk through
of ―Paper to People‖ flow
 Readiness Reviews
 Infrastructure – don‘t underestimate building/technology
needs & resources
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 17

18. What did we achieve?
 Model: Phase II concluded - Europe (2008), Emerging (2009)
 Systems: 2010 concluded Oracle ROI model & Oracle R12
 Process: Aligned by global process not by ‗theatre‘
 People: Partnering, GPM‘s, Councils, Change Managers
 Policy: Global from Strategic Enterprise Program Managers
 Portfolio Management…..People, Process and Technology
….So better prepared to support business
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 18

19. Post Globalisation – What Next & Why
 First Globalisation, then Stabilization, next continued evolution
 Options:
More of the same scope - for new entities
New scope - for same entities -move up the value chain
New Finance groups in scope – Sales Finance, Channels…
New groups outside Finance – Marketing and more
 Retention of Regional Hubs as Centre of Excellence
Incubator…..Standardizing new tasks for globalisation
 Leadership, Collaboration and CRM skills
Organisational evolution - Virtual Controller role
Leveraging technology to work across borders
Strong Change management skills
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 19

20. F&A Services Next Evolution
Certain activities are stronger candidates for outsourcing, while
others are more likely to be retained.
Strong outsourcing candidate
High
Possible outsourcing candidate
Strong retained candidate
Corp.
Svc. &
Mgmt.
Value Added
Decision
Support
Financial
Planning
& Analysis
Accounting
& Reporting
Basic
Revenue
Cycle
Disbursements
High Complexity of Interaction Basic
* Payroll may report to CFO or HR
Presentation_ID © 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 20

21. Potential Scope Expansion Opportunities
PRELIMINARY Second priority First priority
High Cisco Org.
WWSFOps
CSF—Country
Rev. controllers
recognition
Rebates Business Ops
Benefit Fin
GSO
potential Cisco Process CSF—CA
GSM
Cost savings Capital
reqs PO Finance
Accg.
Expertise team
Tax QTC
Benefits Commissions
Quality Other GCCO
Service Manu.
SSC Tax/treasury
Flexibility (standard
costs, inv. Cisco Capital
Acctg)
Stock
CA Fin
admin. (Spare parts,
def. rev.,
etc.)*
Treasury
Low
Not feasible Second priority
Difficult Easy
Suitability and ease of implementation
Strategic relevance
Stable and mature processes
Complexity of migration
Regulatory and other restrictions
Presentation_ID © 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 21

22. What did we do next to evolve?
 Natural Stabilization period
Operational Excellence program
Further transaction transition from hubs
 Organizational re-design
Entity Support Model
Cisco Captive
 3rd Party Relationships
Improved OE
Evolved EY/ACCN relationship for Stat & Tax returns
Engaged ADP to drive Payroll evolution into regional hubs
 Country Enablement
Supported organic growth & new business models eg. Utility based billing
Accelerated acquisition integration with new systems strategy & BPO
Presentation_ID © 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 22

23. Shared Services Journey
F&A Shared Services model continues to evolve…
Deploy ESM
and drove
Country
Enablement
Deploy Oracle
R12 & design
Entity Support FY‘12
3rd party BPO Model
evolve from hub
to Global
processing
FY‗10
Co-location: FY'08
35 geographic
locations into
four regional
centers
Presentation_ID
FY'06
© 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 23

24. Shared Services Model Expected Benefits
Efficiency High cost—Cost was Low cost
 Improved efficiency overall not a consideration provider
“Competitive”
Effectiveness
 Higher quality of service
 Global consistency of services
Keep Industry
 Improved customer satisfaction lights on standard
“Top Quartile”
 Improved operational metrics
 Improved employee satisfaction and retention
Flexibility/Scalability
 Ability to meet needs of Cisco‘s existing
changing business models Standard Fully custom
offerings offerings
 Ability to grow with Cisco‘s rapid growth
“Segmented offerings and
 Ability to integrate acquisitions Service levels”
Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 24

25. Accomplishments
 Establishment of F&A SSO
Delivery and Service
 ―Operationalization‖
 Extended Quality & Service
 Globalization and Consistency
of Processes
 Evolvement of Organization
 Flexibility to support the business
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