Cisco Innovation 2005 Study. Select Findings. August 2005

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1 Select Findings August

2 Objectives & Methdlgy Data Cllectin Timeframe: July 8-18, 2005 Respndent Prfile: Cmpany Prfile: Key Gegraphies: 635 ttal respndents 542 business decisin makers 93 IT decisin makers 190 small cmpanies (10 t 99 emplyees wrldwide) 222 medium cmpanies (100 t 999 emplyees wrldwide) 223 enterprises (1,000+ emplyees wrldwide) U.S. Overview f Findings Driving Organizatinal Cmpetitiveness Innvatin was the verwhelming chice fr driving rganizatinal cmpetitiveness accrding t a pll f 635 U.S. business and IT decisin-makers. When asked t chse between which areas wuld have the biggest impact n cmpetitiveness: 53% cited Innvatin 26% cited increasing emplyee educatin and skill levels 14% cited reducing wages 7% cited cutting crprate taxes Means f Imprving Cmpetitiveness Means f Imprving Cmpetitiveness An increase in the rate at which yur rganizatin delivers prduct and service innvatins 53 An increase in yur emplyees educatin/skill level A reductin in yur wage csts A reductin in yur crprate taxes Percent 2

3 When senir business and IT decisin-makers are asked which single business utcme their rganizatin culd achieve thrugh increased innvatin 26% f respndents indicate they wuld use innvatin t drive increased revenues 18% indicate they wuld use innvatin t drive an increase in market share 18% wuld use innvatin t drive imprved custmer relatinships 16% indicated that they wuld use innvatin t lwer prductin csts Innvatin-driven business utcmes als vary by industry. Cnstructin Finance Manufacturing Prfessinal Scientific & Services Whlesale/Retail Trade Mst Desired Outcme 2 nd Desired Outcme Reduce Prductin Csts/ Interactins (26% each) Interactins (27%) Increase Revenue/Market Share (24% each) Increase Market Share (27%) Increase Revenue/Reduce Prductin Csts (26% each) Increase Revenue (42%) Interactins (33%) Increase Revenue (32%) Reduce Prductin Csts (31%) Educatin Gvernment/ Scial Services Healthcare/ Pharmaceuticals Mst Desired Outcme Interactins (44%) Interactins (45%) Interactins (30%) 2 nd Desired Outcme Increase Market Share (21%) Reduce Prductin Csts (34%) Increase Revenue (26%) 3

4 Technlgy Fcus fr Innvatin When asked which f these fur technlgy areas wuld have the mst significant rganizatinal impact if incrprated int a prduct r service at a lw marginal cst: 32% cited cmmunicatin technlgy 24% cited lcatin technlgy 22% cited greater Internet and netwrk bandwidth and data strage technlgy Technical Innvatins with Mst Impact Technical Innvatins with Mst Impact Cmmunicatin technlgy 32 Lcatin technlgy 24 Greater Internet and netwrk bandwidth 22 Data strage technlgy Percent 41% f whlesale/retail respndents indicate that lcatin technlgy wuld have the biggest impact n their rganizatin. Of respndents fcused n transactin cst reductin: 32% indicate that data strage technlgy will be the mst effective t them 27% fcused n cmmunicatins technlgy Increased bandwidth is mre beneficial t small cmpanies than t larger cmpanies. 26% f respndents at small cmpanies indicate that increased bandwidth technlgy is mst likely t help them achieve their gals fr innvatin vs. 15% at larger enterprise rganizatins Industries In Need f Innvatin Executives were asked t chse which amng several industries wuld benefit mst frm embracing technical innvatin. 53% selected healthcare 50% selected federal; 48% cited state and 46% cited lcal gvernment 39% selected K-12 educatin; 38% selected higher educatin. 4

5 Fcus f Innvatin in Healthcare Fcus f Innvatin in Healthcare Greater benefit frm innvatins in healthcare 30% Greater benefit frm innvatins in the public/private healthcare system 70% When asked where imprvements in emplyee healthcare will benefit their rganizatin the mst, mre than tw-thirds f executives indicated that innvatins must cme in the public/private healthcare system (reduced csts, better recrd keeping, better insurance cverage) while the ther third believes that innvatins in healthcare (better dctr training, better medicatins, mre health educatin, healthier emplyees) will benefit their rganizatin the mst. When asked where and hw the imprvements shuld take place: 49% chse imprvements in family medicine 21% chse imprvements in medical specialist/ specialty care 21% chse lng-term care 9% emergency care When respndents were asked where innvatins in the educatin system benefit will benefit their rganizatin, 58% cite greater creative thinking and prblem slving skills 20% cite cllabratin and scial skills 5

6 Benefits frm Innvatin in Educatin Benefits frm Innvatin in Educatin Having emplyees with greater creative thinking and prblem slving capabilities 58 Having emplyees with greater cllabratin and scial skills 20 Having emplyees with imprved basic skills 15 Having emplyees with a brader knwledge base Percent Other areas that wuld benefit the educatinal system include: 21% cited brader access t glbal subject matter and imprved cmmunicatins 13% cited stricter teacher requirements 10% cited a greater chice f schls 6

7 Abut The is a research cnsultancy that uses quantitative and qualitative research methdlgies t nt nly infrm its clients, but als enhance their market prfile. MRG has been recgnized fr their develpment f thught prvking research n tpics, such as the macrecnmic impact f Internet technlgy n the United States and ther ecnmies (e.g. Internet Ecnmy Indicatrs and Net Impact Since its inceptin, MRG has had the pleasure f cnducting such innvative research fr a number f clients including AMD, Autdesk, Cadence, Cisc Systems, Hewlett-Packard, PepleSft, Siebel Systems, Sun Micrsystems and Sybase. Fr mre infrmatin, g t 7

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