CEO Visions: Lessons We Shouldn't Forget - InformationWeek

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1/23/2003
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CEO Visions: Lessons We Shouldn't Forget

Businesses must realize that agendas are now customer-driven, HP's Carly Fiorina says.

The changes we've seen in technology requirements, which are the changes that drove us to build the new HP, are going to continue this year. The issues we saw customers focus on in 2002 include lower total cost of ownership, productivity improvement, reduced complexity, and improved manageability, and they will remain.

Some people confuse cyclical economic issues in the IT industry with structural changes. There are structural changes that have been going on that became most visible last year, and they'll continue for years to come. Customers' problems, however, have become more complicated, and therefore they need more capable partners. Sales cycles are longer because those problems are more complex. Even if the economy rebounds this year, which we all hope it will, the coming years of 2003, 2004, and 2005 will look a lot more like 2002 than 1999 in terms of how customers buy IT.

It's a customer-driven agenda now. The first and most obvious choice we've made that was driven by the customer's agenda is our merger with Compaq, because it gives us all the key elements of infrastructure that customers care about. Our investment choices, our strategy, our reliance on collaboration with customers are all oriented around that agenda. You won't see major strategy shifts at HP because we now have the basic elements of our strategy and our portfolio in place. What you will see is even more focus and aggressiveness on our part in satisfying that customer agenda. We'll be more on the offensive in the marketplace this year because we're prepared to be.

You'll continue to see great new products roll out of HP. We'll invest in the software and management tools necessary to build truly adaptive, agile IT infrastructures. We'll invest in security and in mobility across the depth and breadth of our product line. You'll see us drive innovation around what I broadly call high tech, low cost, which is innovation focused on delivering lower total cost of ownership for customers and, at the same time, lower cost of acquisitions, lower cost of management, and lower cost structures for HP.

Services are an integral part of everything we do. We think about our services capabilities as a critical piece of lowering total cost of ownership, of increasing the manageability and decreasing the complexity of our customers' infrastructures. Services are a critical piece of bringing adaptability and agility to customers, and managed services will continue to be a key part of our overall enterprise strategy around return on IT.

I'm optimistic about the year ahead, but optimism doesn't mean lack of realism or pragmatism--it comes from an understanding that problems can be solved and progress can be made. I'm optimistic about the industry, and particularly about our prospects in the industry, because although people spent more money on IT in the late '90s, they understand why they spend money on IT today much better than they did then. Customers will demand a clearer linkage between their business objectives and their technology spending, but technology now is broadly acknowledged as being absolutely mission critical.< P>We've all learned a lot of lessons in the last couple of years, and in many ways we're relearning that fundamentals count. We've rediscovered that cash flow, balance sheets, and profitability count. We've rediscovered that ethics and integrity count. In some ways, we've relearned in the IT industry that fundamental industrial logic counts. By that, I mean size, share, brand, capability, and global reach.

If the economy begins to pick up, we can't forget those fundamentals. As an industry, we can't roll back into the frenzy of acting as though some piece of technology is a silver bullet. It's not. A lot of customers learned the hard way that if you throw technology at a problem, and you don't have change management and project management and a clear linkage to a business case, you're throwing your money away. We all have to remember those lessons.

Carly Fiorina is chairman and CEO of Hewlett-Packard.

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Do tech stars like Michael Dell, Steve Ballmer, and Carly Fiorina see the future clearly? Check out what our complete panel of 32 visionaries have to say here.

Columns By Other Hardware Company CEOs
Craig Barrett, Intel Scott McNealy, Sun Microsystems
John Chambers, Cisco Systems Inc. Sam Palmisano, IBM
Michael Dell, Dell Computer Joe Tucci, EMC Corp.
Carly Fiorina, Hewlett-Packard Dan Warmenhoven, Network Applicance Inc.

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