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Implementation of radical changes in IT - HP

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ISM Project on Implementation of radical changes in IT - HP

ISM Project on Implementation of radical changes in IT - HP

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  • 1. Implementation of radical changes in IT Presented by: Neha Kumar (A029) Nitya Murthy (A031) Rashi Kapur (A039) Sonal Rajadhyax (A050)
  • 2. Contents            Introduction to IT Infrastructure technologies implemented in case About HP About Randall D. Mott His achievements Challenges faced Mott’s initiatives Results achieved Comparative analysis of his work at Walmart, Dell and HP Case Questions Current Information – Mott at GM Take-aways
  • 3. Some rudimentary information What is a Database and a Data Warehouse? A Database is an organized collection of data. The data is typically organized in a fashion that supports processes requiring this information. • A Data Warehouse is a Database used for reporting and data analysis. It is basically a central repository where data is integrated from multiple sources. • A Data Warehouse can store current as well as historical data and are commonly used for creating reports. Eg.) The concept of a Data Warehouse is used extensively in Business Intelligence and to analyze trends over time •
  • 4. Some rudimentary information (Contd.) What is Data Mining? • Data Mining involves extracting information from a data set and transform it into an understandable structure for further use. • This process is also called as “Knowledge Discovery in Databases” or “KDD”.
  • 5. Some rudimentary information (Contd.) What is a Data Center? • A Data Center or computer centre (also datacenter) is a facility used to house computer systems and associated components, such as telecommunications and storage systems. • It generally includes redundant or backup power supplies, redundant data communications connections, environmental controls (e.g., air conditioning, fire suppression) and security devices.
  • 6. About HP  Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, United States  It provides products, technologies, software, solutions and services to consumers, smalland medium-sized businesses (SMBs) and large enterprises, including customers in the government, health and education sectors.  The company was founded in a one-car garage by William (Bill) Redington Hewlett and Dave Packard.  HP is the world's leading PC manufacturer.
  • 7. About HP  HP deals in the following product lines:                     Printers Digital Cameras Scanners Tablet Computers Mobile Phones Pocket Computer Desktop Calculators and Computers Business Desktops Thin Clients Personal Desktops Business Notebooks Personal Notebooks Workstations Servers Enterprise Storage “StorageWorks” Storage Element Managers Storage Area Management ProCurve Telepresence and Video Conferencing External Hard Disk Drives USB Flash Drives etc.
  • 8. About HP At HP we don’t just believe in the power of technology. We believe in the power of people when technology works for them. To help you create. To make the digital tangible. To harness the power of human information. At HP we work to make what you do matter even more. You + HP make it matter.
  • 9. Stalwarts at HP Michael Capellas (Compaq CEO – HP President) Rahul Sood (Voodoo PC Founder) Steve Jobs (Summer job) Steve Wozniak (Calculator Designer)
  • 10. About Randall D. Mott •Holds a Bachelor of Science degree in Mathematics from University of Arkansas, Fatteyville. • Has been the CIO of four of the largest U.S. companies during his career of more than 30 years •Worked for WalMart for 22 years from 1978 to 1994 and as Senior Vice President and CIO from 1994 to 2000 •Worked at Dell as CIO and Senior Vice President from 2000 to June, 2005 •Worked at HP as Executive Vice President and CIO from 11th July, 2005 to June, 2011 •Working currently at GM (General Motors) as CIO since 28th February, 2012 •Is known particularly for his penchant of delivering IT projects quickly and on a tight budget (InformationWeek titled him as “Speed Merchant” in 1996 and as “Chief of the Year” in 1997)
  • 11. His Achievements Mott made Wal-Mart a pioneer in analyzing big data (before the term existed) to optimize its global supply chain. • He simplified the process of opening and running new stores by developing a network of computerized distribution centers • • Mott reduced the cost of IT as a proportion of company revenue from 1.91% in financial year 2001 to 1.43% in the 2005 financial year. •He also reduced store inventories • Mott implemented a ruthless patch management programme where critical patches are rolled into the live environment less than 24 hours after being issued by a supplier.
  • 12. Why was Mott hired in HP? Mott was recruited by the CEO of HP, Mr. Mark Hurd  HP needed one version of the truth, meaning  it had to provide access to consistent company-wide data  providing clear and ready answers to any question, any time, anywhere.  Prioritizing IT initiatives that align with business objectives  Business technology operational spending was to be reduced from 4% to 2% of revenue
  • 13. Challenges faced by Mott at HP • Unlike the other IT transformations that Mott had implemented at Walmart and Dell, the transformation at HP was a brownfield transformation as opposed to a greenfield strategy This involved restructuring of the existing IT systems as opposed to fairly nascent pre existant IT systems at Walmart and Dell. •Further there was an existing relatively large IT team in HP (employees and outsourced staff), as opposed to relatively non existent or small teams at Walmart and Dell prior to Mott’s transformations. •His initiatives involved thousands of layoffs in the IT function while requiring the support of remaining staff. • This was also one of the most capital intensive initiatives that Mott was foraying into with an investment of over US$ 1 Bn.
  • 14. Mott’s top five technology Initiatives
  • 15. Implementation  HP goes on an IT infrastructure diet
  • 16. Implementation   Financially rigorous cost-benefit analyses of every IT project, big and small, were the mandate A model enterprise data warehouse was built, enabling the team to retire 784 disparate business intelligence systems throughout HP
  • 17. Results of Mott’s Initiatives at HP IT infrastructure Transformation 85 data centers consolidated to six Processing power increased Triple the bandwidth at half the cost Data storage capacity doubled 784 data marts to one Enterprise data warehouse 1200 individual projects trimmed to 500 Each site designed for high availability, disaster recovery and business continuity Business benefits Business technology operational spending reduced from 4% to 2% of revenue ~60% reduction in annual energy consumption 40% networking costs reduction 80% of employee time spent on new development with just 20% on IT support Improved operational effectiveness and quality of service
  • 18. Comparative Analysis Wal-mart    Computerize the distribution network Data warehousing Application : Data analysis to determine buying trends and reduce store inventories Dell   Data warehousing Application : Inventory management HP    Reduce annual spending on IT Data warehousing Application :  Capitalize on the vast breadth of HP products  Performance analysis  Single customer management system
  • 19. Case Questions
  • 20. Question 1 Will the initiatives that CIO Randy Mott has undertaken to implement major changes to the IT function at HP make IT a more efficient and vital contributor to HP’s business success? Defend your position on each of the major initiatives he is implementing. Initiatives undertaken by Randy Mott at HP: •Restructuring the existing IT systems, thereby making sure all of HP’s businesses are working off the same set of data. •He made sure all of HP’s Businesses worked off the same set of data. •To provide tools to quickly make the best decisions for the entire company. •To replace 85 loosely connected data centers around the world with 6 cutting edge facilities. •To scrap 784 isolated database for one company wide data warehouse. •To trim 1200 active projects to 500 and imposed deadlines for completion. And the impressive results are !!! HP spent about $1.7 billion on the IT transformation, generating about $1 billion in annual savings. What CIO wouldn't love to have those numbers to tout?
  • 21. Question 2 Do you approve of the change management job Mott is doing, including his meetings with HP employees throughout the world and having “coffee talks” with them? Why or why not? Through his “coffee talks” approach Mott was responsible for significant retrenchment of former IT employees of HP at different locations and he hired a significant number of former executives that he had worked with previously to form his team Mott’s “coffee talks” strategy: • Mott embarked to restructure an already existing large HP IT team. •His initiatives involved thousands of layoffs in the IT function. •He centralized the control over the employees and tested the limits of the HP culture. •He took away the right of IT workers to purchase their own tech equipment and also their ability to tele-commute.
  • 22. Opinions of Mott’s “coffee talks” strategy: In our opinion, Since Mott initiated one-to-one discussions with employees to explain them the reasons for their impending layoffs, hence his approach was correct However :  Retrenchment of employees leads to significant dip in their morale.  He expected the remaining staff to support his initiatives which was difficult under such circumstances.  The HP employees were accustomed to a de centralized control. Hence they resisted the change brought about by his initiatives.  These decisions are one of the most sensitive within an organization. Hence the following considerations should have been taken :  Corporates are attempting to find alternate employment avenues or accommodations in other divisions for employees that are laid back.  One approach that Mott could have used was to interview the existing HP IT employees to see if any of them could suit the roles that he needed instead of banking on external recruitments.
  • 23. Question 3 Assume you have been hired as a management consultant or coach to CIO Mott. What are the several suggestions you might give him to help him successfully implement his ambitious plan for IT changes at HP? Defend your proposals. •Given there were a significant number of existing HP employees, possibly a few of them could have suited the roles that Mott replaced with his former colleagues. • Mott’s emphasis was to shorten the deadline for projects. Rather than focusing entirely on time management, he should have analyzed the same to see if they were complementary to his outlook. • While speedy completion of projects are important, there could be instances when genuine reasons make extension to project deadlines necessary. •A feasibility analysis should be conducted to assess the probable impact of his technology implementation beforehand. • In an environment that is continuously changing, Mott should have considered whether some of the support IT functions can be better outsourced while the in-house IT team could focus on new product / application development.
  • 24. Mott at GM  Mott doesn't think GM can be creative or fast enough with outsourced IT  Today, about 90% of GM's IT services, from running data centers to writing applications, are provided by outsourcing companies such as HP/EDS, IBM, Capgemini, Wipro, and only 10% are done by GM employees. Mott plans to flip those percentages in about three years to 90% GM staff, 10% outsourcers. Mott will need to hire thousands of people as it brings software development and other skills inhouse.  The way Mott sees it, he's joining a "$150 billion startup"
  • 25. Take –Aways  IT infrastructure needs to take root in a company’s culture by aligning with the company objectives and helping achieve the company’s business goals  IT infrastructure should be consolidated and updated to include the latest and fastest technology available – this consolidation might be time consuming and require extra efforts but it gives the necessary results  The same database should be made available to all users in the company, this enables them to build tools for data analysis to make the best decisions for the company.  IT Infrastructure is built for the growth of the company by proving decisionenablement tools and to speed up its processes, hence it should be cost effective and give an ROI such that its proportion of the company’s revenues is minimized.  Although technology should be implemented to achieve results for the company, however implementation decisions should be taken keeping in mind the employees who are an asset for an organization.
  • 26. Randall Mott’s approach of uniting all features, facilities and services provided by an organization are path-breaking and have proven to be successful at all levels of implementation across a plethora of businesses. Hiccups to a radical implementation will always arise, but the final outcome of a simpler, better and more viable business solution will always be welcome anywhere, anytime. Thank you