Modern-day technological advancements have simplified the way global companies and individuals conduct their businesses. Many types of businesses involve the exchange of services and products between two or more individuals or companies. In the past, business was cumbersome to conduct. A lot of time and finances were wasted as companies tried to cut deals with other companies around the world.
A very simple transaction of forwarding a cheque for onward clearance and payment could take up to two weeks to be considered successful. However, the development and utilization of tools for information and communication have changed the way business is conducted. Individuals and companies are now able to sell products and services, market themselves globally, and serve a worldwide customer base simply by using the internet to conduct business. The internet is being used by major conglomerates and small companies to conduct business. In Australia, 90% of small businesses are connected to the internet and conduct their business online (eBusiness, 2008).
By definition, electronic business (eBusiness) denotes the utilization of the World Wide Web and the internet to perform business both in the local scene and abroad. Whereas eCommerce involves the exchange of goods and services, eBusiness is broader in that, it involves other business activities that include research, marketing, communications, collaboration, and support services. The information and communication tools used in eBusiness enable individuals and companies to connect their domestic and foreign data processing programs more flexibly and efficiently. They are able to conduct business more easily with their partners and suppliers and gratify the requests and expectations of their clients (eBusiness, 2008).
Major companies around the world have embraced eBusiness as their preferred mode of conducting business and interacting with suppliers, partners, and clients. One of the companies that have invested heavily in eBusiness is Cisco. From its humble beginnings, Cisco has established an empire in e-partnerships, which has continued to provide it with a firm foundation for its accomplishments in eBusiness. Below I attempt to identify and discuss the key initiatives taken by companies, including Cisco, to transform themselves into global networked eBusinesses.
Key initiatives towards transformation into global networked eBusinesses
The cut-throat competition experienced in the world today has left companies with no options other than to use information and communication strategies to remain afloat in the turbulent business environment. Those that fail to invest in technology are finding it exceedingly difficult to conduct business. Cisco has been a major developer of information and communication tools that have been of crucial importance in transforming companies into global networked eBusinesses. It actually functions within an outsized arrangement of partnerships that has served to improve its technology exchange, shared sales and marketing, product development, solution development, and development of novel markets. It has collaborated with big companies, including, Intel, Oracle, Motorola, IBM, and Sony (Zhao, 2005).
Companies need to make some key initiatives in order to transform themselves into fully functional eBusiness status. First, technology is expensive, and getting the right systems that will enable a company to conduct eBusiness may require significant investments. Hard decisions must be made by companies’ Chief Financial Officers, Chief Executive Officers, and the board as to the suitability of eBusiness investments and the returns they will make to the companies involved. Smart companies always take the initiative to invest heavily in eBusiness as they realize the future of business lies there (Haapaniemi, 2001)
To effectively transform into global networked businesses, companies must also put in position schemes and procedures that will facilitate them to increase responsiveness and efficiency while serving their customers. Such systems must also be able to reduce costs. Speed in eBusiness is always of the essence. Processes and systems must therefore be developed prior to switching to eBusiness that will ensure that speed and timeliness in conducting business over the internet are always maintained (Haapaniemi, 2001).
Another key initiative is for companies to emphasize their basic competencies and outsource functions that are not strategic to them. When companies streamline their functions, products, and services, clients and partners will always know where to look on the internet and thus business will increase. Identifying one’s core competency is the right step towards transformation into eBusiness (Haapaniemi, 2001).
Companies must also strive to discover the point and time to commence the eBusiness transformation. This is very crucial and depends on the type of business the company is involved in as well as the areas of transformation that offers the company the largest return on its investments in the quickest time possible. Different companies have different areas of transformation they may want to start with. For example, a small bookshop may realize a significant and immediate rise in revenue by marketing its books globally. In such a scenario, the bookshop managers may want to begin their transformation into eBusiness by developing an internet Web store that has the capabilities of a shopping cart.
This will automatically connect their customers to their suppliers thus giving the managers room to have a firm grip on the increase in business. A food service provider, having outlets around the world may begin its eBusiness transformation by consolidating and shortening its bookkeeping and human resource processes over the internet (Transforming your traditional business, 2000).
Perhaps the most important initiative is the vision shared by the management in transforming their companies towards being global networked eBusinesses. The vision of eBusiness should be plain enough for all to understand. All the employees and managers should relate the process of eBusiness transformation with an obvious view of the desired goal. To effectively transform, companies must evaluate their current status, set in motion the change facilitators, outline a vision for the enviable organization, create action plans that will progress them towards their expectations, and tackle information, structures, relationship, and processes issues.
The vision shaped must be transformed into an action plan that must encompass the measurements and milestones that portray the electronic transformation route. This action plan must be appraised at regular intermissions by the senior managers (Endington, 2006).
Outcomes of Cisco as a global networked business
Cisco has its origins in 1984 when Sandy Lerner and Leonard Bosack invented a technology that linked their separate computer systems. They could have communicated with one another but their computers were connected to different operating systems. To solve the problem, they developed a router that functioned like a mailroom. The translator or router could open up packets and allocate the information. With the software they developed, data could be processed and read by any computer under the network and even across diverse operating systems. The two, who were husband and wife, developed the idea further after receiving considerable funding and eventually went public in 1990 ( Chatman, O’Reilly, and Chang, 2005).
The company plunged into business by offering high-end routers and specialized in the Local Area Network market. Its routers had the advantage of connecting to any computer, from Apple to Unix to IBM machines. Cisco entered into the corporate network’s market much earlier than its competitors due to their routers, which were considered least congested and most efficient. Demand for the routers was high. Cisco began its diversification into other network technologies and markets in 1993.
This was facilitated by the changing nature of the worldwide internet and corporate intranet systems. A dynamic-powered technological discovery happened around that time in the form of switches. They were less sophisticated than typical routers but performed many more functions. Cisco obtained that technology by acquiring the company that discovered it together with the talent (Chatman, O’Reilly, and Chang, 2005).
Cisco became a force to reckon with in data networking equipment, thanks to the new technology. 80% of major routers that powered the internet by 1997 were manufactured by Cisco. The company now deals with routers, Wide Area Network (WAN) switches, Local Area Network (LAN) switches, internet appliances, networking solutions, and software for network management. True to its vision, Cisco has continued to outline the future of worldwide networking by developing extraordinary openings and value for its employees, partners, customers, and shareholders. Cisco systems, one of the Silicon Valley companies, is a market leader in software and hardware technology for internet traffic routing as well as developing routers for corporate networks. (Chatman, O’Reilly, and Chang, 2005).
Cisco has continued to reap impressive outcomes from becoming a global networked eBusiness and from developing products and services that help other companies to be networked globally. First, its market capitalization stood at $550 billion in early 2000, thus making it the most valuable company in the world at that time. Cisco’s revenue base grew at an annual average of 53% between 1995 and 2000. John Chambers, the CEO, has worked very hard to see annual revenues increase from $1.2 billion in 1995 to over $18.9 billion in 2005.
Secondly, Cisco has enabled individuals and companies to be strategically linked through its information and communication networks, thus enabling those companies to have strong collaborations and interactive associations with one another. The switches developed by Cisco have served as catalysts for growth in companies and individuals that continue to embrace their use. For example, its Enterprise Resource Planning (ERP) package enables partners to be directly linked while at the same time providing real-time access to crucial information that is paramount for supply string. Many companies depend on this package to contact their suppliers and clients as well as to outsource non-core functions to other companies in the system (Zhao, 2005).
ERP is a business term used to denote a wide set of actions that are supported by the multi-unit application software that helps individuals, companies, and manufacturers to manage crucial parts of their core business. Without this software package from Cisco, individuals and companies could be finding it difficult to effectively manage their tasks under the ever-increasing pressure arising from spirited market pricing.
To make vital business decisions promptly and correctly, they must rely on up-to-date information that is provided in the ERP systems. Organizations that have embraced this strategy have a long-term competitive benefit over their challengers in that, they carry out their operations in an instantaneous, synchronized, and precise manner (Nolan, Porter, and Akers, 2001).
Another benefit for companies using the ERP system is a reduction in operating costs. Due to the possession of real-time information in their management systems, companies are able to lower their inventory control costs, among other costs. ERP systems enable employees to perform their duties more easily and with more flexibility. Worldwide clients are served better and efficiently and some overhead costs are done away with or reduced. (Nolan, Porter, and Akers, 2001).
By being integrated into the ERP system, a company in Australia can effectively serve clients in the US and Canada in real-time. This automatically translates to more revenues for the company. The ERP systems are thus viewed as an engine for economic development and carry the potential to unlock the growth of companies, both big and small.
Another plus for companies is that they can now fill out and actively track orders with much ease and using less time. Before the discovery by Cisco, ordering goods and services was a cumbersome affair. Companies used to take months to order basic commodities thus slowing down the business. Orders could not be tracked and some companies depended on sheer luck to get their orders through. However, the ERP systems, used in tandem with eBusiness and web IT has put to rest all the disappointments that were associated with the ordering processes. Now, orders are filled, processed, and tracked more speedily and with much ease. Inventory levels are always rationalized in real-time. Companies are now able to collaborate with their vendors with much ease (Nolan, Porter, and Akers, 2001).
The technology brought up by Cisco has opened up emerging economies, especially in developing countries to more growth opportunities. Africa for example has benefited exceedingly from technological advancements that have been made possible by Cisco. More and more multinationals are opening up subsidiaries in emerging economies, as the business of controlling such subsidiaries has been made easier. In real-time, a parent company in the US can be able to conduct a real-time evaluation of its business interests in another foreign country (Jones and Kiron, 2004). This is what eBusiness is all about. This has in turn stimulated emerging economies to achieve higher growth rates and open up more employment opportunities.
Cisco can be credited to the fast economic growth rate that China has achieved over the years, especially from 1994. Though China was among the fastest growing IT hubs in the world, Cisco faced some stiff competition from local Chinese companies including the Chinese IT giant, Huawei. Other challenges faced in emerging economies like China were issues of software piracy and harsh government policies. However, its opportunities were there for all and sundry. Through its technological advancements in the development of LAN switches, WAN switches, ERP’s, and other information and communication packages, Cisco has been at the forefront in ensuring that emerging economies are opened up for business (Jones and Kiron, 2004).
Lastly, Cisco Networking Academies is working with 63 developing economies and countries to provide much-needed education in technology. This has contributed much to the uptake of its technology in these economies thus positively transforming the lives of people in these economies. Unemployment levels are going down in some of these economies, thanks to Cisco’s technology and gadgets (Jones and Kiron, 2004).
In conclusion, it can be said that eBusiness is here to stay. Companies are now taking advantage of the World Wide Web and the internet to conduct their businesses in a more efficient and less time-consuming manner. Processes are being speeded up while the costs of doing business are being dramatically reduced – thanks to the concept of eBusiness. Nevertheless, without companies like Cisco and Oracle, we could not be where we are today in terms of eBusiness and eCommerce. Such companies deserve a pat on their backs.
Works cited
Chatman, J., Charles, O., Victoria, C. Cisco Systems: Developing a Human Capital strategy. 2005. Commonwealth of Australia.
eBusiness. 2008. Sydney web. Web,
Eddington, F. The Three Phase change Management framework for eBusiness Transformation. 2006. Web.
Haapaniemi, P. How Companies Transform themselves: Execution is what will Distinguish the Winners from the Losers in the Next Phase of eBusiness. 2001. BNET. Web.
Jones, G.G., Kiron, D. Cisco Goes to China: Routing an emerging economy. 2004. Harvard Business Publishing. Web.
Nolan, R.L., Kelly, P., Christiana, A. Cisco Systems Architecture: ERP and Web-enabled IT. 2001. Harvard Business Publishing. Web.
Transforming your Traditional Business. 2000. AME Info. Web.
Zhao, F. Maximize Business Profits through E-Partnerships. 2005. Idea Group Inc. Web.