Progressive manufacturers bring together employees, partners, customers, and all key stakeholders and knowledge providers to participate in all aspects of the business.Cisco is seeing that the only way for companies to be successful is to find news ways of engaging with their customers, their partners, and their suppliers – and to use technology to do this. We call this the Dynamic Networked Organization. It’s really a new business model for how companies work with their value chains to drive business advances. This chart highlights the fact that most organizations manage their information in a hierarchical manner within their firewall. That is, they’re not really good at sharing information outside their organizations. This new, dynamic model really focuses on sharing information and can enable manufacturers to work across their entire value chain, with customers, partners, and suppliers, both inside and outside their firewall.By operating as a dynamic networked organization, a manufacturer can begin to view all the parts of their supply chain as a single system. The dynamic networked organization creates an ecosystem, while addressing the security concerns about boundaries and profit interests. All the entities in the ecosystem can interact securely and collaboratively.
Cisco itself is another example of how to unleash the AND. Faced with the same tradeoffs we've already discussed in this presentation, we evolved our business models and today operate as a Dynamic Networked Organization. For example, to enable customer relationships that are both personalized AND pervasive, we implemented a program called Specialist Optimization Access and Results -- or SOAR -- that combines Web 2.0 features with collaboration tools such as remote access, Unified Communications, WebEx, and TelePresence. The SOAR system has increased our customer reach by more than 40 percent, and has increased customer satisfaction by a rating of greater than 4.7. Our specialists save 6 to 17 hours per week, and we've reduced expenses on travel and entertainment by between 50 and 60 percent. In another example, to make our organization both agile AND efficient, we implemented a new governance model. Our Operating Committees, Boards, Support Councils, and Workgroups now share information and work collaboratively in a cross-functional, dynamic structure. The new way of working has reduced operating expenses by $1.5 billion, and, in just five months, helped us reallocate $500 million to over 30 market adjacencies. Finally, to foster innovation in an environment that is both open AND controlled, we created a new way for creative thinkers to collaborate with one another. Our i-Prize competition invites entrepreneurs from around the world to propose new, billion-dollar business ideas for Cisco. To support the competition, we created the Innovation Zone, which lets team entrants located anywhere collaborate on their submissions securely. In our second running of the competition, the Innovation Zone supported 2,900 participants, representing more than 156 countries, and 824 ideas. The winning idea proposed creating a physical and virtual platform that facilitates connectivity along with smart objects, people, and information, and the idea is under consideration as a new Cisco Emerging Technology.