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© 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
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 3
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
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 5
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.
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 6
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.
7© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialGlobal Site Strategy
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.
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 8
Physical Blueprint - WPR
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 9
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
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 10
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
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 11
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
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 12
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
13© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialGlobal Site Strategy
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
14© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialGlobal Site Strategy
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 }
control { ≈ 3 x A }
early break lease term
commitment
early break
early break lease term market renewal
commitmentfixed price { ≈ 2 x A }
control { ≈ 3 x A }
{≈ A }{ = A }
{ = A }
{ = A }
fixed price { ≈ 3 x A }control { ≈ 3 x A }
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 15
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 16
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*
17© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialGlobal Site Strategy
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)
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 18
• 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.
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 20
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 21
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 22
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 23
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 24
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