Transforming IT: Cisco’s Structural Changes and Their Implications

Transforming IT: Cisco’s Structural Changes and Their Implications
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 si