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ShareHewlett-Packard's Randy Mott: Greatest CIO Strategy Ever?
Posted by Bob Evans on Dec 5, 2008 02:48 PM
Yes, I'm making a loaded statement when I say Randy Mott has executed what might be the greatest CIO strategy ever. But consider what he's done for Hewlett-Packard in just three years: cut 85 data centers to six; 700 data marts to 55; 6,000 apps to 1,500; 19,000 IT pros to 10,000; tripled bandwidth at half the cost; cut IT spending from 4% of revenue to under 2%; and flipped the maintenance/innovation spending ratio from 80/20 to 30/70. My colleague Chris Murphy tells the remarkable story in "All In."
Now, of course, such things don't happen just because Mott's a smart guy -– he also had the full support of Hewlett-Packard CEO Mark Hurd, and he had $1.7 billion to fund the transformation, including the construction of the six new data centers. But to gain that level of support, Mott had to show that all those moves would make HP much more responsive to customers by overhauling the company's enterprise architecture, transforming the quality of information available to HP people as well as its customers, and standardizing the company's processes around the world.
So my colleague Chris Murphy wondered if other CIOs will attempt to follow the model laid out by Mott:
"Yet all I can think, as I sit at an HP event at a Miami resort, surrounded by HP customers who've come to learn what Mott and his tear are up to, is this: Will even one CIO in the audience follow his advice?"That's because duplicating HP's business technology transformation comes with medicine many CIOs will find hard to swallow. On the budget front, it's capital-intensive, focusing on reducing IT staff size in part by spending on more automated and efficient software and hardware -– not an easy sell in this economic environment.
"On the organizational front, it takes full support at the executive committee level, giving the IT team the clout to take on business units that want to circumvent centralized tech prioritization and measurement. When it's a stare-down between the CIO and the general manager of some high-flying business unit, will the CEO back the IT team? Mott's vision is a high-risk, high-reward proposition.
"And here's the toughest part: CIOs must do it all at once, all in."
Pretty powerful stuff -– but can it be replicated? Surely, as Murphy points out, today's brutal economic climate can make such an approach daunting. And CIOs who haven't already begun to attack the paralyzing 80/20 ratio, where the vast majority of the budget goes to keep-the-lights-on maintenance costs and leaves little to apply toward innovation, will hardly be in a position to set the type of sweeping vision required for such a strategy. Here's how Mott and HP got started:
"To know that reversing 80/20 wasn't just a theoretical exercise, HP started documenting what people work on, not what they're assigned to. Once a week, tech employees document their time by project -– including if they're pulled off an assigned project to put out a support fire."It's a big effort to set up, Mott says, but 'if you don't have good information on what people are doing, I don't know how you make decisions to take an organization in a new direction.' "
The HP analysis is riveting reading for not only CIOs but also anyone interested in driving the type of customer-centric business innovation that's essential for any company wanting to be able to compete in the 21st century global economy. And be sure to check out these three closely related pieces by Murphy:
And finally, I've suggested what Mott and HP achieved might be the greatest strategy ever, but I'd love to hear other nominations. What's the greatest IT strategy and execution you've come across? Send it in and we'll write it up.
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