“Digital” means different things to different organizations. One can digitize customer experiences to enable seamless customer interactions or digitize internal operations to improve efficiency. Others can leverage data to reimagine business models and create new value propositions. While several organizations focus on the first two, few leverage new platforms and business models to seize digital opportunities.

Cisco’s interpretation of “digital” involves the creation of platforms and business models to build and nurture customer relationships and explore innovative niches for value-added subscription services. This unique perspective has led to Innosight’s recognition of Cisco as one of the top 20 companies that have achieved the highest impact business transformations over the past decade.

Venkat Krishnamurthy, Vice President of Engineering at Cisco, joins Todd Pruzan, Senior Editor for Research and Special Projects at Harvard Business Review to discuss the impact of Cisco’s transformation journey on the customer experience.

Todd Pruzan, HBR

Venkat, thank you so much for being with us today.

Venkat Krishnamurthy, Cisco

Thank you for having me. It’s great to be here.

Todd Pruzan, HBR

Venkat, how did Cisco use strategic transformation to reposition itself?

Venkat Krishnamurthy, Cisco

OK, that’s a great question. I will answer it in a couple of ways. Number one, Cisco always looked at inflection points. These are places where market transitions happen, and we have recognized what these transitions are and how to react to them. I will give you two or three instances. In the late ‘90s and early 2000s, voice, video, and data converged on a single network instead of multiple networks. While our CEO said it at that time, there wasn’t that much of a belief, but this was an inflection point. Another inflection point that began in the 2000s and 2010s was the internet of things, which was not just about routers, switches, and servers. It was sensors. It was cars. It was machines.

The other inflection point that kind of builds on the internet of things, which we saw during the pandemic, is about hybrid work digitalization, smart cars and smart cities, connected cars, and others. So we took advantage of these inflection points, made the right moves, and positioned ourselves to serve our customers.

The companies that didn’t do these things got left out. My favorite example is Blockbuster; that’s where you went when you wanted to rent a video 15 years ago. But they didn’t take advantage of the streaming service idea, and it ended up disrupting their business model.

One thing we’ve always understood from the very beginning is how collaboration is going to change. The mission of Cisco is to change the way our customers live, work, play, and learn. Collaboration tools play a large part in all these. During the pandemic, we saw that collaboration not only ensured business continuity, but governments were run using collaboration tools.

Another thing that we understand is the culture of innovation and transformation through spin-ins, acquisitions, and internal R&D we see in market transitions. We change toward the direction of these market trends and constantly listen to our customers through multiple advisory boards, engagements, and events.

Todd Pruzan, HBR

It’s great to have that historical context. So how have Cisco’s partners and Cisco’s entire ecosystem contributed to its transformation in ways that have changed the customer experience?

Venkat Krishnamurthy, Cisco

In a word, tremendously. So we have always recognized that our partners are an essential part of how our products and solutions solve a customer problem.  We see our partners as people who have specific expertise that enable us to complete or change our solutions, and not as people who supply resources to enable our business.

I’ll give you an example that relates to this. We work with partners that are really good at training people to ensure they train our customers to use our products and solutions effectively. We also work with partners who can ensure that our customers are using our critical services 24/7.

We have partners that build certifications based on our products and solutions. We have even created certifications that are unique and help create a team of people who can provide networking and IT solutions to our customers.

The example that I want to talk about is a product we’re working on right now. So my team is creating network management and automation solutions for service priorities in mass-scale networks. We are currently building the next gen of a planning tool we have had for many years, and we’ve collected a lot of data on it.

Now, we can analyze the data. But we also want to talk to Persistent—as they have extensive data practice, great algorithms, and experience working with data, and did I say they have great algorithms? They really do.

So we are jointly embarking on a project where we are going to use our planning tool data and Persistent’s algorithms to see the kind of insights we can provide. This is just one small example of how we use the expertise of our partners to build data to create business outcomes and improve the solutions we give our customers.

Todd Pruzan, HBR

So you can’t do it alone. You need partnerships. As we mentioned, Cisco was recently recognized as one of the top 20 business transformations of the past decade. So what key elements will sustain Cisco’s transformation over the next decade?

Venkat Krishnamurthy, Cisco

Yeah. So as I mentioned before, we’ve been consistently good at reading and predicting some of the inflection points and trends in the industry. We listen to our customers, and we have a very good idea of where our customers—which include companies, enterprises, service providers, governments, and government agencies—are going, what bigger problems they’re trying to solve, and how can we lead them toward that.

So in all of this, I think what we have done, and will continue to do, is to deliver the important principles of what our customers want. Number one, they want their solutions to be simple. The complexity of what we do is difficult to quantify, but it can be understood. Just this conversation alone goes through multiple Cisco products, and I’m very certain of that. Our customers want ease and simplicity, and we want to continue giving them that.

Another thing we have always done is to make our systems intelligent. This means that our systems provide lots of data, and the ability to make sense of that data. It’s not enough if we give our customers thousands of pages of logs and counters. We also have to ensure they can make sense of them.

Also, we give our customers scalable solutions. We have customers that have smaller footprints. And some customers have acquired lots of networks. They have to put it all together, and our scalable solutions help them do that.

Another big solution we give our customers is security. Companies are now more open than ever. Every year, Amazon tells us the number of online sales we get.

And more and more, we rely on automated processes. I mean, self-driving cars are just one extreme example of that.

So we need to continue providing secure systems. We currently handle 47 terabytes of traffic, 75 million web transactions, and 1.2 trillion security events in 170 countries daily. And based on our projections, these numbers are going to increase. So we have to continue making these systems secure and, of course, constantly make these processes automated.

One of the first automated processes that Cisco created, which was unique, was the virtual close, where you can actually close a quarter on any given day and then know where we are. It was a huge IT process, and we’ll continue to work on that. These are some of the ways we’ll continue to innovate and disrupt to serve our customers over the next 10 years.

Todd Pruzan, HBR

Well, that is fascinating. Those are some pretty staggering numbers you mentioned there. Venkat, thank you so much for a great conversation and all of your insights today.

Venkat Krishnamurthy, Cisco

Thank you for having me, Todd. I really appreciate it.

To learn more about Cisco, please visit cisco.com

Whether you’re at the beginning of your digital transformation journey or looking to advance to the next level of digital business, Persistent’s team of software product engineering experts stands ready to transform your experiences.

Learn more about our Digital Engineering Expertise.