1. Case Study:
CISCO
APPTIO | 1
Customer Profile:
Cisco is a worldwide leader in IT, providing organizations
around the world with the routers and switches used to
direct data, voice and video traffic. A dominant player
across all internet-based networking solutions, Cisco
also manufacturers remote access servers, IP telephony
equipment, optical networking components, internet
conferencing systems, set-top boxes and network
service and security systems. Cisco bills itself as a
company that helps other companies “seize the
opportunities of tomorrow by proving that amazing
things can happen when you connect the previously
unconnected.”
Business Needs:
The IT leaders at Cisco work at the forefront of technology
innovation, and they see first-hand how IT is changing the
way businesses operate, across multiple fronts. Of course,
the hi-tech digital revolution isn’t only affecting Cisco’s
customers; it’s having a dramatic impact on Cisco internally,
as well. For Rebecca Jacoby, a Senior Vice President and
CIO at Cisco Systems, the steady rate of change within the
company’s IT structure and function presented a unique set
of potential benefits and challenges. On the one hand, she
realized that IT automation, integration and analytics offered
tremendous opportunities to deliver better value to the
business. But on the other, her team was having difficulty
managing the changes and ensuring it had the right cost
structure to deliver the appropriate value to the business.
“We started looking at technology business management
(TBM) in order to deal with the difficulty we were having at
categorizing the costs associated with assembling
technologies together to deliver a capability to the business,”
she explained. “We also wanted to show how that cost
related to the value we were delivering to the business.”
Drawing on her extensive background in business
operations and manufacturing, in addition to more than 15
years of experience at Cisco in a variety of operations and IT
leadership roles, Jacoby recognized that the IT challenges
the company faced were comparable to those facing
modern supply chains.
“Cisco has a broad transformational strategy in IT to move
to a services organization, and when we looked at the
transformation agenda for IT, it struck me as a great analogy
to the supply chain,” she said. “It’s really about putting the
pieces together, just like in manufacturing, when you need to
put together a bunch a parts.”
For Jacoby, the way forward was clear: Before Cisco could
effectively manage the business of IT, the company needed
to improve the way it accounted for the cost and
performance of its IT “parts.”
SOLUTION:
After implementing an Apptio solution, Cisco began to
operationalize TBM in a highly structured fashion. Now,
each of Cicso’s top 25 service owners presents a quarterly
balance scorecard which includes current total cost of
ownership and cost per use of each particular service. As
part of this new cost model approach, the service owners
must also complete benchmarking exercises using the
standard operational usability indexes and use profiles. In
addition, service owners meet periodically to ensure they
are operating with a coordinated roadmap and to evaluate
performance collaboratively.
According to Jacoby, operationalizing TBM in this way has
changed the value conversations regarding technology
at Cisco. For example, her team can now articulate
the specific services IT delivers at every level --at the
component level, at the product level and at the actual
“If we’re to succeed in this new reality, we must recognize that our traditional
approaches are no longer sufficient. We need a new way to manage the
business of IT.” -Rebecca Jacoby

2. APPTIO | 2
Case Study:
CISCO
capability level –and all in terms the business understands.
“This is a very high value to IT because there was a lot of
ambiguity around this in the past,” Jacoby said. “By applying
the cost model, it gave us a foundation for the service owners
–and really for everyone in the organization --to understand how
to clearly define a service.”
This kind of clarification leads directly to a second value
conversation, which Jacoby sees as the most important of all.
“Once we understand the services we deliver in that kind of
detail, we can bring those services to the table for what we are
doing to run the business today and for what we need to do to
grow the business in future,” she said.
BENEFIT:
The Apptio TBM solution enables Cisco to evaluate the health
of its IT services in new and innovative ways. Based on the
foundation articulated by the cost model, Cisco now can:
• benchmark IT performance and cost against peers
• compare IT directly with performance metrics
• thoughtfully consider trade-offs
• link run-the-business conversations to both change-
the-business and grow-the-business conversations
• evaluate costs in the broader context of level of service
performance
• communicate effectively with vendors and other
business partners
• assess progress collaboratively, and
• stay on course with current strategies and roadmaps
for the future
According to Jacoby, Apptio’s TBM solutions help her team
run IT like a business . . . and that in turn, has transformed
the way Cisco’s business leaders look at IT.
“Cloud computing, a worldwide recession, and intensified
global competition –these forces have changed the
economics of IT. They’ve created a playing field where many
of us are faced with the mandate to not only do more with
less, but to also have value-based conversations with our
business partners,” Jacoby concluded. “If we’re to succeed
in this new reality, we must recognize that our traditional
approaches are no longer sufficient. We need a new way to
manage the business of IT.”