What Can HP Teach You About How To Run Your IT Department?

by drjim on April 27, 2009

HP's CIO Has Taken Bold Steps That Can Teach Us A Few Things

HP’s CIO Has Taken Bold Steps That Can Teach Us A Few Things

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:

  1. 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.
  2. Time Spent Innovating: This measures how much IT time is spent working on new things as opposed to doing support tasks.
  3. 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.
  4. Collaboration: how many different locations are involved in a project? The goal here is to keep this number as low as possible.
  5. 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.

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{ 5 comments… read them below or add one }

Sam April 29, 2009 at 11:36 pm

Those are impressive numbers. I’m most interested in the 30% maintenance to 70% new development. That allows IT to be a real innovator and a means to push business forward (IT profit center?). Those numbers seem about the opposite of a typical IT shop. So the question is, how does he sustain it? Automation, self-service IT, other?

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Dr. Jim Anderson May 5, 2009 at 9:11 am

Sam: you’ve got it – HP seems to have done what everyone else is trying to do. Sustaining it will be the real challenge and this is a question that only time will answer. One step in the right direction is that HP now requires a business case for all projects – if they can stick with this, then they may be able to stay on the path that they are on…

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Ravi Sharma June 24, 2009 at 12:32 pm

Agree that HP CIO has done a great job in cost reduction. I was part of Data center consolidation and legacy lease line migration as Regional IT Project manager (APAC & Japan) for 2 years contract.

I wish more success in learning which is pending and teaching is completed.

Best Regards
Ravi Sharma

ravisharma_70@rediffmail.com
http://www.linkedin.com/in/rsharma

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neberka June 28, 2011 at 12:40 am

This is pure rubish. The numbers don’t really tell the story. I was recently an HP developer (not in IT) and the quality of Mott’s IT was staggeringly poor. Service outages happened daily, the servers were horrendously slow, and it was impossible to get IT to address the most basic, critical flaws. All Mott has done is shift the cost of IT to the people and projects it is intended to support. Teams of highly paid product engineers spent hours each day wrangling with ridiculous IT decisions. I’ve never seen anything like it, and it has caused some of the brighter colleagues to switch opportunities. You know you are in for a bad experience when the tool to give IT feedback is mysteriously inexcessible. So yes, now IT costs less. Next they should ditch all these expensive computers and string up some dixie cups and chalk boards. The savings!

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Dr. Jim Anderson July 8, 2011 at 9:18 am

Neberka: you might have a point there — I believe that Randy Mott is now the ex-CIO for HP. It would appear as though his ideas were good, but the execution of them was not so good…

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