When I say “HP” what is the first thing that pops into your mind? In my case it’s a flashback to the HP 12C calculator that became welded to my hand while I was working on my MBA. These days, HP does a lot more and we all probably have some HP printers or PCs laying around somewhere. However, it’s what HP’s CIO Randy Mott has been up that has caught my attention.
Let’s start with results because otherwise Randy’s story really isn’t worth telling: HP has cut IT spending from 4% or revenue to about 2% of revenue, 70% of staff’s time spent on new development with just 30% being spent on support, shrunk 85 data centers down to just 6, 6,000 applications shrunk down to 1,500. Wow – sure looks like Randy must be walking on water, eh?
Any CIO would lust after results like these. However the devil is, as always, in how Randy got them. Chris Murphy over at InformationWeek did some digging and found out that Randy had to do a number of things that would make even the strongest of us think twice.
Randy’s most important strategy: he realized that it was not just enough to identify the big areas of HP’s IT department that needed to be transformed, what he needed to do was to go after all of them at the same time as one big, huge, effort.
Here’s what he took on (all at once): portfolio management, IT workforce effectiveness, world class IT organization, global data center consolidation, and a single enterprise data warehouse. Whew! You could build a CIO career on any one of those.
To accomplish all of this, HP needed to get their metrics right. Here’s what they measured:
- On-Time Delivery: Just like pizza, this is what really can make an IT department have some credibility. HP went one step farther – it’s weighted so delivering big projects on time counts for more than delivering a bunch of little projects on time.
- Time Spent Innovating: This measures how much IT time is spent working on new things as opposed to doing support tasks.
- Time-Phase Boxing: Similar projects should take the same amount of time to do similar phases. This metric serves as a warning flag if a project is starting to go off course.
- Collaboration: how many different locations are involved in a project? The goal here is to keep this number as low as possible.
- Cost / Benefit Analysis Validation: In a nutshell, this is an agreement BEFORE the project starts as to what it’s going to cost and what value it’s going to deliver. This metric tracks how close the team is to completing the CBA and nobody starts the project until it’s complete.
Do you think that your IT department could take all of these major initiatives on at the same time? Which of these metrics do you think would provide you with the best insights into how your IT projects are doing? What metric should be added to this list? Leave me a comment and let me know what you are thinking.