Transforming a company is hard enough. Transforming it in a sluggish economy is even harder. Welcome to Carly Fiorina's world. The job the Hewlett-Packard chief set out to do two years ago is still unfinished. On top of that are financial worries, confused customers, and criticism about Fiorina's credibility. But questions highlighted in this week's cover story (p. 36) may help struggling companies (or even those enjoying growth) think differently about how they articulate their strategies.
Fiorina is betting on a plan to help customers build "always-on Internet infrastructures." That means getting services, software, and hardware offerings working together in a way that lets users allocate computing power in real time. Another way to think of it, notes editor John Foley, who wrote the story, is delivering IT like a utility-like electricity.
If that sounds familiar, it's because it's not radically different from a strategy Lew Platt laid out in 1995, when HP's ambition was to build an "information utility" to let workers and consumers link digital devices as easily as plugging in electrical appliances. But the execution is different. The strategy still involves devices, servers, and PCs-as Platt said it would-but there's an even greater emphasis on professional services. Still, attempts to consolidate business units and rally 93,000 workers around the strategy have been complicated by fragmentation and lack of focus within HP. Shareholders, HP's board of directors, and customers want and need to know where costs will be trimmed, how business units will be combined, and how the products stack up to the competition. But to stand out-or even to stay on track-HP must demonstrate to business technology managers a compelling value proposition.
That leads me to the questions I mentioned earlier. Jerry Miller, CIO and senior VP at Sears, wants to know what HP can do to help a CIO looking for ways to cut costs. Or harder still: How can HP help a company apply technology to gain a competitive advantage while also coping with tighter IT budgets? These are questions any CEO should easily be able to answer (in fact, Fiorina does), but maybe it's better for vendors to articulate these things before the questions are asked. While Pactiv Corp. uses a lot of HP products, CIO and VP James Hatch admits it's hard to know who the thought leaders are at HP or how to establish an in-depth partnership with them.
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