NM200: Cisco makes the Connection

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Most companies these days are sticking a toe in the electronic commerce waters. Some have even decided to wade right in. And then there's a company that's in right up to its neck and swimming fast enough to win the top spot on NetMarketing's list of the top 200 business-to-business Web sites.

San Jose, Calif.-based Cisco Systems' site practically defines effective business-to-business Internet marketing. As a manufacturer of high-end Internet information-processing equipment such as routers and hubs, the company sells "99.9999%" of its equipment to businesses, says Chris Sinton, director of Cisco Connection, as the site is called.

And since 80% of Cisco's $10 billion in annual sales are generated by the site, it's obviously far more than an afterthought. The site also handles about 70% of the company's technical support contacts and about 50% of initial marketing contacts.

Mr. Sinton said Cisco used pre-Web technologies, such as text bulletin boards, for product support groups and software downloading beginning in the late 1980s. It moved to the Internet bulletin boards in 1992 and adopted a Web-based site about the same time other early adopters did, in 1994.

Today's Cisco Connection is a mind-boggling 40 gigabytes of data on 10 million separate pages. It generated 40 million page views in May, the most recent month's statistic available.

Mr. Sinton and Mark Tonnesen, Cisco's director of information services, said the key to Cisco Connection is centralized design, organization and information architecture but completely decentralized content.

"Our company's Internet site is our brand, so we believe it's very important to have corporate marketing control the user experience across the whole site, the interface and the information architecture," Mr. Sinton said. "But the content and the applications on each business unit's site is completely decentralized. That's because each business group and each function best understands what their customer needs."

Mr. Tonnesen said Cisco probably spends $20 million to $30 million a year on developing new content and applications for the site, with 300 to 400 content developers, and $7 million a year or so more on bandwidth and equipment, including 24 staff people. Overall, Cisco has 18,000 employees.

Mr. Sinton said nearly all Web development is done in-house. "The reason for that is, as we were developing it, companies did not exist that sold the software we needed," he said. "And now we're at such a scale, we find it difficult to use things off the shelf."

He said the site has undergone six major redesigns -- the most recent in October -- but because of its decentralized nature, small upgrades, improvements and changes take place almost daily. The biggest change in this redesign was toward a portal, frames-off look.

Focus on service

Management of Cisco's site fits the modern model, with e-commerce tied directly into all corporate systems.

"When someone places an order, it drops right into our ERP [enterprise resource planning] system, then to our extranet to our supply chain so it's immediately manufactured and shipped," Mr. Sinton said. "So the customer gets the product faster, but we also open up information like the status of the order, the pricing, the options -- all that information most companies hold onto and you have to call a salesman to get."

About three-quarters of Cisco's online sales are to its retailers, which, like most in IT, Cisco calls channel partners. Only one-quarter of the site's sales are direct to consumers, which are generally huge, sophisticated users.

In view of the site's importance to the company, its advertising budget seems minuscule: $1 million a year, Mr. Sinton said. He said the advertising is done in "very focused" business-to-business magazines and sites.

"We are not out there trying to drum up just traffic on our site," he said. "At the same time, you have to market the medium -- and if you build it, they will not necessarily come, even business-to-business.

"We want to make sure our customers understand what applications are on the site and their value. And we're not just focused on our customers, but on our internal staff, making sure they understand what's there."

Mr. Sinton said the company also keeps up on what users want and need on the site by using four worldwide advisory boards of about 60 key customers each, in the U.S., Europe, Latin America and Asia.

Cost savings

The site has paid huge dividends in productivity, Mr. Sinton said. For instance, customers in June checked the status of orders online 300,000 times.

"That means they're getting information anytime they want it, but it's also 300,000 times our customer service or salespeople were not asked for that information," he said. "We believe that has raised their productivity 15%."

There were also 380,000 software downloads from the site in June, which Mr. Sinton said obviously carried a huge savings in shipping and postage.

Mr. Sinton said Cisco believes the site saved it $600 million a year ago, allowing the company to boost research-and-development spending to 12% of sales, from 9% three years ago.

There have been several surprises en route to the site's success, he said.

"We had thought the adoption rate would be higher in the U.S. than internationally, when in fact it was the reverse," Mr. Sinton said. "The reason for that, we think, is the time difference. The Internet is always there and ready to go, 24 hours a day."

Mr. Tonnesen said the company is studying the latest in Web technologies for the future of its site, including voice-over-Internet and distance learning. "We see many new opportunities for service and support," he said.

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