1. The Business Case and ROI Analysis for IP Telephony at Cisco Systems
Cisco Account Team
Date

2. Cisco AVVID and Cisco IP Telephony:
Key Components of Cisco’s E-Business Strategy:
Optimising Cisco’s Workforce
Caring for Cisco’s Customers
E-Learning
Workforce Optimisation
Supply Chain
Customer Care

3. Cisco’s IP Telephony Deployment Strategy
Deployment of Converged E-Business Applications
Maintenance & App Dev Cost
Focus on deploying converged applications on IPT infrastructure across all Cisco offices
Business Benefit of
Cisco IP Telephony
(Relative Scale)
IP & Web Foundation
Expanded to Include Voice
Infrastructure Cost
Focus on changing out PBX infrastructure with IP Telephony infrastructure across all Cisco offices
Cisco is currently in the middle of a rollout plan
All offices are converted to AVVID infrastructure by mid-2002
Once all offices are up and running on AVVID (and Microsoft Exchange), can switch on applications and accelerate benefits
. . .
Office 1
Office 2
Office 3
Office 96
App 1
App 2
App 3
App x
Cost of Cisco
IP Telephony
(Relative Scale)
2000
2001
2002
2003
2004
2005
Year

4. Real Benefits of Cisco IP Telephony
= Quantifiable benefits that are applicable to Cisco Systems and used in this ROI Analysis
Single Network
Maintenance, Cabling, Administration, Support, Power, Moves/Adds/Changes (MAC’s), Staff
Voice Business Continuity
Integral component to an effective voice business continuity plan
Can be compared against other less effective plans
Voice message backup/restore
Real Estate
Space Utilisation, Reduced Operational Costs, Flexibility
Reduced Call Costs
Reduced mobile phone usage
Extension Portability Campus Roaming, Home Office, Other Location
Outbound Call Management
Unified Messaging
Audio Conferencing
Small Branch Office
Centralised Call Processing
Elimination of voice trunks
IP Toll Bypass
No on-site PBX
Reporting, Billing, Cost Management
Cross-Enterprise telecom reporting
Cross-Enterprise call cost management
Predictability of telecom bills
Reduced PC Costs
IP phone can replace a web-enabled PC or laptop in certain environments
Hard-dollar cost savings
Employee Productivity
End User Applications
Audio Conferencing
Unified Messaging
Personal Assistant
Web Access
Computer Telephony Integration
IT Operations
Facilities Mgmt Ops
Productivity increases that can be safely quantified
Benefits that are very real, but difficult to quantify
Cultural Enhancement
Customer Satisfaction
Employee Retention
Geographic Flexibility
Competitive Positioning
Faster Application Deployment
Voice Business Continuity
Difficult-to-Quantify Productivity via Converged Applications

5. ROI Approach & Methodology
Individual Cisco offices form the fundamental building blocks of the ROI analysis for IP Telephony
All offices categorised as Large, Medium or Small
Perform detailed analysis on one of each of the three office types
Tie all benefits to a “per employee” benefit
Total EMEA-wide ROI figures prorated based on office size and office headcount
Pricing of Cisco equipment is representative of what a large enterprise customer would pay, not what Cisco Systems would pay
Analysis takes into consideration the timing of each individual office going live on IPT infrastructure, as well as the time in which applications launched EMEA-wide
Only 50% of any benefits dependent on integration and/or development are realised in the first year of deployment
In line with the highly conservative nature of the analysis, the approach assumes Cisco offices are NOT greenfield sites: i.e. the “Do Nothing Option” is to continue using and maintaining an existing PBX

6. Actual ROI Results for Cisco EMEA: FY2000 - FY2005
Payback Month = 10
NPV %) = $60 million
Business Benefit of Cisco IP Telephony
(Relative Scale)
Deployment of Converged E-Business Applications:
IP & Web Foundation Expanded to Include Voice
2000
2001
2002
2003
2004
2005
$12.4m
=$1625/emp.
Net Benefit
(US$)
$9.4m
=$1230/emp.
$33m
=$4320/emp.
$2.6 m
=$340/emp.
$33m
=$4320/emp.
Year
2000
2001
2002
2003
2004
2005

7. Benefit Differences of the Large, Medium, Small Offices
Large Office Results:
Cisco EMEA Headquarters, Bedfont Lakes/London, UK: 1147 Employees
ROI = 130%
Payback Month = 9
NPV = $12.3 m
Medium Office Results:
Cisco Eschborn/Frankfurt, Germany: 171 Employees
ROI = 120%
Payback Month = 10
NPV = $1.8 m
Small Office Results:
Cisco Sophia Antipolis, France: 35 Employees
ROI = 111%
Payback Month = 11
NPV = $330 k