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As HP's CIO, Randy Mott Hasn't Changed His Outsourcing Stripes

At Wal-Mart and at Dell, Randy Mott kept IT work in-house, with almost no outsourcing. He's got the same game plan for HP.

Mott, speaking at the InformationWeek 500 Conference in Palm Springs, Calif., said HP relies too much on a myriad of outsourcers and contractors, and it leads to too many "hand-offs" during IT projects. Plus, he wants HP's IT team to be a showcase for the software and hardware it sells, so he wants the team building in-house expertise. His goal is to have 90% or more of work done by HP staff, not outsiders.

Mott never says he's anti-outsourcing (certainly not at a company that sells outsourcing). CIOs need to do what makes sense for their businesses, and companies with great variability in IT project demand or that don't want to commit to building a top IT shop probably should rely more on contractors and outsourcing. But when his job is on the line, Mott has always relied on his own people. At Dell, he benchmarked internal IT operations against outsourcers' cost and performance, making it clear to the team those were numbers to beat to keep the work. But there was also a clear expectation that if the IT team, with its insider knowledge of the business, couldn't outperform outsourcers on key IT functions, then shame on them. Similar story at Wal-Mart, though admittedly the IT outsourcing industry was much less developed at the time.

As usual, Mott has set some tough expectations for HP's IT staff to cut costs while improving operations, and he has set up stark metrics to measure progress (like IT going from spending 54% of their time on maintenance and support to 20% by 2009, thanks to greater automation). We're going to write more about that in our upcoming issue. HP has been in the news this week for a lot of the wrong reasons. Hopefully the board can stay out of the way long enough to give the interesting things happening at HP, including in its IT department, a chance to play out.

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