ISM Project on Implementation of radical changes in IT - HP

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