global site strategy df_cisco presentation.pdfglobal site strategy process . governance . taxonomy ....

© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1Cisco Confidential 1© 2010 Cisco and/or its affiliates. All rights reserved.

Global Site Strategy

Corenet - An Introduction to GSSJohn Corbett – Theatre COE Lead, APJCI

25 March 2014

© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 2

• Aligning WPR with Cisco’s Business Models and Corporate Strategies.

• Defining Governance and Decision Framework :

Workplace Resources (WPR) will govern global real estate portfolio planning through a Global Site Strategy framework, coordinating with the Business Functions to classify all sites using “Core”, “Non-Core Critical” (NCC) and “Non-Core Non-Critical” (NCNC) designations.

• Providing Guiding Principles, Decision Guidelines and Priorities

• Supporting Global Strategic Initiatives and defining long-range Site Strategies


Proactive Site Strategy Has Significant Benefits:

Align RE portfolio with company's targeted growth markets/work force planning

Attract and retain World-Class Talent

Build Leadership

Increase shareholder value by effectively deploying capital through greater visibility to the future of sites

Enable company's ability to respond to future opportunities and challenges

Accommodate for an unexpected economic downturn

Provide opportunities for Productivity gains and infrastructure savings by consolidating fragmented teams via portfolio optimization

4© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialGlobal Site Strategy

“An important part of our strategy is to develop our people and evolve our organization so that we can deliver a simple, scalable and agile foundation that will enable us to support current and innovative business models. To accelerate our ability to deliver strong business outcome in FY14.” Olivier Kohler, SVP Global Business Services


After developing the GSS one of the first steps was getting a policy developed and endorsed.

This endorsement allows WPR to move forward with implementation of the GSS that is aligned with it’s leadership.


Policy: WPR governs global real-estate portfolio planning through a Global Site Strategy (GSS) framework, and coordinates with the Business Functions to classify all sites using “Core”, “Non-Core Critical” (NCC) and “Non-Core Non-Critical” (NCNC) designations.

Representative Supporting Principles and Policies1. Business Functions shall provide a 12-month site exit plan for employees and activities in

sites not classified as Core or Non-Core Critical.

2. All new investment in facilities must adhere to WPR published standards for Cisco Connected Workplace, inclusive of Space Policy. Labs and Data Centers must follow current WPR specifications, with endorsement of the appropriate governing body.

3. All new and existing facility investments and commitments shall comply with GSS Portfolio Guidelines.

4. Acquisitions: All new sites acquired through Acquisitions are provisionally classified as NCC (to be reviewed for reclassification in 12 months from Announce Date).

5. New Sites: Any proposed new site shall be approved if and only if it is explicitly required as Core or NCC by the Function’s Business Plan, has approved funding, and is in accordance with all other GSS policies.


Cisco Vision & Strategy translated into a Physical (RE) Blueprint resulting in the GSS framework.GSS is WPR’s execution plan that supports Cisco’s vision of having an integrated operating model that supports the company’s priorities.


Physical Blueprint - WPR


Global Site StrategyProcess . Governance . Taxonomy . Structure . Guidelines

Business Strategies CRM - Policy Making Clients, Global Demand, Advance Planning - Corporate

Planning efforts (ACT, Work Force Planning etc)

Functional Site StrategiesFSO , GES, CA, SCM …

1.Client Communication (BRs)

2.Portfolio Optimization

3.Metro Implementation Plans,

4. Investment Strategy/ Pipeline

5. Integrated Solution Sets/ Offerings aligned to GSS framework

Strategic InitiativesGDCS, Lab, Customer Engagement, …

Geo StrategiesClassification- Charter- Phase

TheaterCountry

Metro

Delivery: Regional/Local Leadership/Demand & Current Supply situation


1. All Cisco offices classified into 3 site classifications.

2. Site Classifications are created by WPR and the Business

3. All WPR teams need to understand the site classifications, attributes and lifecycles and use it to guide investment/support decision making

4. Portfolio guidelines, Lease structures, Growth, Investment, WPR Offerings services, Design solutions


Current Efforts

Global Site

Strategy*Process

*Objectives*Governance *Classification

*Policy*Guidelines*Strategic -Initiatives*Regional-Strategies

Portfolio Calls & Metro Implementation

PlansStrategic Direction at

Regional Level applying GSS and portfolio Guidelines

Next Steps• Site Charter/ Leadership Business develops Site Charter/ Mission and Leadership in partnership with WPR• Offerings/ Solution SetsPolicies, Design and Service Standards mapped to GSS framework

GSS policy Communication &

TrainingGoverns the adherence to

GSS across Cisco

Portfolio Optimization

Ongoing quarterly process optimizing our portfolio

based on Business Strategy/Demand and Utilization of space (w/

cross functional PMO team)

Theater CallsPrioritized Investment

pipeline Aligned to GSS

Governing Body: Subset of Operating Committee


Start-up

Pre-chasmNew Acquisitions

High-Growth

Post-chasmEstablished – Mature

Strategic ObjectivesAgility

Rapid decision to deployment, Test Premise

Elasticity / Flexibility / Scalability for Growth

Differentiation, Optimization

Portfolio Short-term CommitmentsMaximum Flexibility

Mid-term (weighted) with long-term Commitments

(Leased)

Long-term (weighted) with mid-term Commitments(Leased and Owned)

Planning 100% Fungibility, Multi-purpose

Minimized /cluster Specialization

Differentiated and Clustered by Functions and

Specialization,

Design100% mobile/virtual,

transferable, disposable, multi-purpose solutions

Maximized mobile/virtual, generic solutions

Differentiated ,Purpose-built


GSS Site CategoryGSS Site Phase: MIN Commitment* DurationsStart-up (speed)

High-Growth (flexibility)

Mature (optimization)

Transitional (potential exit)

1 Globalization Center

2 Development Center

3 Customer Solutions Hub

4 Cisco Support Center

5 Branch

5.1 Mid & Large Sales Branch (PH > 20)

5.2 Small Branch (PH < 20) & Satellite

Market opportunities may differ from this guidance: variances should be detailed in ePAF

There is always a possibility for new and non-public information to change a site classification: delivery teams should seek current CRM guidance for each site

Refer to GSS Regional Strategy for region-specific recommendations

*this does NOT mean lease term necessarily, although it could depending upon the RE cycle… refer to next slide

PM Guidelines: Duration Tiering(Alignment to GSS)

Start-up High-Growth Mature

0% 20 50

Short (1–3 years)

Intermediate (4–7 years)

Long (8+ years OR owned)

% of Site/Metro Portfolio 100%

high risk/low certainty low risk/high certainty

Emerging/APCI US-Can/Europe/Japan

”s-curve”

risk profile

geography

Addressed by GSS Regional Strategies

CommitmentTerm Legend

limited and

mobile capital invest-ments

focus capex investments in the

longer terms commitments

minimize any

capex invest-ments


Clock Options Strategies Goals & Steps

peak(risk zone #1)

Goal: minimize exposure to highest cyclical rentsSteps:

1. align lease term to commitment duration per GSS site category (A) [previous slide]

2. obtain market renewals to allow re-sets in near future when market rents are lower

[commitment = fixed price ≠ control]

neutral

Goal: hedge short & long term risks simultaneouslySteps:

1. align early break to commitment duration per GSS site category (A)

2. set lease term 1.5-2X longer than break, set market renewal @ roughly same term as break

[commitment ≠ fixed price ≠ control]

trough(risk zone #2)

Goal: maximize capture of lowest cyclical rentsSteps:

1. align first break to commitment duration per GSS site category (A)

2. set lease term to ~3X the first break term, and obtain additional break(s) in between

OR

3. set lease term to ~2X the first break term, and then obtain a fixed-price renewal to extend both control and pricing certainty

[commitment ≠ fixed price = control]

PM Guidelines: Flexibility (Lease Options)

lease term market renewal

commitmentfixed price

control { ≈ 3 x A }

market renewal

{ = A }{ = A }

early break lease term fixed price renewal

commitmentfixed price { ≈ 3 x A }


early break lease term

commitment

early break

early break lease term market renewal

commitmentfixed price { ≈ 2 x A }


{≈ A }{ = A }

{ = A }

{ = A }

fixed price { ≈ 3 x A }control { ≈ 3 x A }


11

22

33

*

*


Identify Opportunities

•Assess RE Portfolio•Identify opportunities in partnership with Business

•Initiate Scorecards *

Complete Scorecards

•Engage Portfolio Optimization PMO team

•Conduct Assessments•Portfolio Optimization PMO complete scorecards

•Inform Policy Makers

Obtain Decisions

•Present to subset of Operating Committee

•Site Decisions made and SVP assigned as sponsor for execution

•Notify AP Director (PMO Lead) of decisions

Execute

•PMO Lead establishes High level timeline for Execution of each site decision

•Engage Portfolio Optimization PMO members

•Portfolio Optimization PMO members engage functional execution teams ( HR, Comms, IT etc)

•WPR CRM + Portfolio Optimization PMO member engages SVP sponsor

•Exec Communication plan developed and reviewed with PMO Lead

•SVP sponsor sends executive communications

•Execute decision•Track Actual Cost Savings

* Where Functional Leadership buy-in needed** functional execution teams ( HR, Comms, IT etc)


• Core, Non-Core Critical & Non-Core Non-Critical• Exit NCNC Sites• Quarterly audit of Sites

• Core, Non-Core Critical & Non-Core Non-Critical• Exit NCNC Sites• Quarterly audit of Sites

Site Classification

• Head Count & Major investments in Core locations• Limited targeted investments in Non-Core Critical locations• Cisco Support Center

• Head Count & Major investments in Core locations• Limited targeted investments in Non-Core Critical locations• Cisco Support Center

Growth & Investments

• WPR in partnership with the Business• Subset of OC will drive decisions• WPR in partnership with the Business• Subset of OC will drive decisionsGovernance

Thank you.

Cisco ConfidentialCisco Systems, Inc. Workplace Resources FY13 VSME 25

WPRVSME

Org.Mission &Programs

Resources &

Support

Review Internal

EfficienciesFine Tuning

SI & WT

UpdateStrategic

Plan

What is WPR‘s mission and programs and our

resources are aligned?

Identify what is working well and what needs to be

adjusted?

1

23

Identify the areas of focus needed through out the organization?

4

Align Strategies, Performance Measures and GBS Priorities

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