'Faster processors and devices do not fundamentally change the way IT gets delivered'

Credited with transforming IT at Walmart, followed by
creating Web-based capabilities at Dell, Randy Mott currently manages IT at HP
as its CIO. He is responsible for IT strategy, and his portfolio includes all
applications development, data management, technology infrastructure, data
center operations, and telecommunication networks worldwide for HP. Randy Mott,
in an interview to Dataquest, talks of IT transformation at HP, and some of the
challenges that CIOs face today.

How do you compare challenges that you faced at Walmart and Dell
with ones in HP?

Challenges in HP are different from that of the other two, because the
company has a very broad portfolio of products and services. Walmart has a
large-scale operation, and had a lot of growth when I was there. Dell too
certainly had a lot of growth, but in only one sector, ie technology. But, HP
offers a mix of both of these experiences. When we look at the current size of
HP and its portfolio, the opportunity for us really is to build a world class IT
organization. I think the challenge here is the sheer complexity of portfolio
and information technology used in the company.

Can you elaborate on the strategies that you have adopted at HP
to reduce costs?

IT transformation at HP started way back in July 2005, when overall
transformation took place in the company. We went for better alignment with our
customers as well as horizontal areas to bring more efficiency across the
organization. That was the IT challenge. A part of that transformation has
become a leading benchmark in our industry. From the efficiency standpoint,
while we are striving to be more cost effective, we also want to deliver more
information, and change and adapt to meet business requirements. There was a
cost element in transformation. We were striving for 4% of revenue as a goal,
but ended the transformation under 2%, and the results are significant.

More importantly, our goal was to do it quickly, and in a record
time. So, we set ourselves a three-year plan. At the end of this quarter, we
will be at the half way mark. We had taken some initiatives. One was to ensure
workforce effectiveness by making the workforce highly organized, and the other
was to get more and more people to work on development activities. In 2005, we
had 70% of our people doing support activities, and only 30% of them were doing
development activities. Now, we are on the path to get 80% for development at
the end of the three-year period. Our processes, organizational strategies, and
the technology we use gave us added advantage, resulting in a common standard
and integration of all of our applications. The number of data centers were
reduced from eighty-five to six. We integrated 3,500 applications, brought them
down to 1,500, and reduced the number of legacy applications. We also derived
benefit due to portfolio management, and narrowed our projects to the most
important ones.

How should a CIO keep pace with the fast changing technology
landscape?

Technology is constantly changing, but at the same time I think a CIO has to
challenge the leadership in terms of the overall business alignment that needs
to happen as well as the technology. Part of it is to have the right leadership
team in place with defined responsibilities, as you can't keep doing
everything yourself. But you certainly need to make sure that your team is
organized and has a clear sense of responsibilities and ownership-not only in
terms of understanding what is happening today, but also where the technology
trends are going. Then, I think, you have to work closely with the technology
partners to stay in touch with the latest trends.

"Most companies are realizing that they have scarce resources, so they need to take decisions to run their IT in terms of driving focuses and strategies"

What are the technologies that a CIO should actively consider?

Storage, business continuity, disaster recovery are all different today.
These things have become very affordable, but though we are reducing cost, we
are actually replicating data to take risk out of the business. We are putting
more stability and reliability into the system that is full of applications
data. With system and application changes, we are driving to a totally different
level of reliability and availability of system. This is something that you
wouldn't have thought about ten years back. Again, it's around the price
performance and the actual application of the technologies. The technology is
changing. So, one needs to change at the IT practices to level the change,
enabled by both affordability and the performance of technology.

What is your take on outsourcing of IT infrastructure? Do you
see this as a trend in India?

I think it depends on the type of industry and business. This is a trend, as
more and more companies are looking at ways to automate more of their
infrastructure. We are definitely trying to do more of that; some customers
choose to outsource, and others do it themselves. Customers should decide what
to do.

What are your views on CIO-CEO relationships?

Well, I am fortunate to have a CEO who understands IT very well. There are
people in the technology industry who do not understand the challenges within an
IT organization, even though they have been in the technology industry. There is
a difference between IT, and actually understanding IT. My CEO understands IT,
and how it can be a competitive advantage. Most companies today have an
opportunity for IT to play a role. The fact that IT is progressing in all
business processes shows that IT is important, and it's a strategy and an
opportunity for CEOs to use that IT, as a way to gain competitive advantage,
focuses, and strategic initiatives in terms of the company's objective. Most
companies are realizing that they have scarce resource, so they need to treat it
as such, and take decisions to run that IT in terms of driving focuses and
strategies.

You have managed IT at Walmart for several years. With the
retail sector gaining momentum in India, what are the challenges that retail
CIOs face?

What customers expect from retail today is customized solutions to their
needs. So, any CIO who wants to go to a new market needs to customize what
customers expect. The biggest challenge is to be dynamic in terms of assortment.
In other words, CIOs should be able to understand the information about selling,
plan assortment, and customize it store-by-store. So, whoever does his best to
meet customer needs is the one who is going to be successful in the marketplace.
With that comes the cost structure and the right merchandise.

Sudesh Prasad

sudeshp@cybermdia.co.in