Fiorina Lectures Execs on Change and Adaptive Enterprise

 
 
By Paula Musich  |  Posted 2003-10-21
 
 
 
Lake Buena Vista, Fla.—Hewlett Packard Company learned a handful of important lessons in its massive integration effort with the Compaq acquisition, including the need to be able to adapt rapidly to change, according to CEO Carly Fiorina.

In her keynote talk at the Gartner Symposium here, Fiorina citing Darwins theory of evolution, said, "the company that thinks its done is done. Darwin said its not the most intelligent or strongest that survive, but those that adapt the most readily to change. Its not about fixing a company and stopping it, but its about a company being able to adapt constantly, while knowing its purpose, goals and underlying values and characteristics."

Another valuable lesson HP learned is how to manage change as a system. Companies are a system made up of strategy, structure and process, rewards and metrics, and culture and behavior, Fiorina said. "If you dont manage change in a systemic way, it wont happen."

She said non-technology companies could also use HPs integration experience as an example of how to adapt their own organizations.

"Theres a lot we have in common with a bank or a P&G. We have about a $47 billion supply chain—the largest in the technology industry. Using our own products, people, tools etc., weve taken the time required to add a new supplier to that supply chain from five weeks down to two hours. This is applicable to other types of companies," she said.

At the same time, HP—as the largest consumer and small business technology provider—can "think about security, manageability, mobility and rich media from the point of view of the handheld right into the heart of the data center," she described.

Although this new HP is fighting several new battles as a result of its size and portfolio, including battling IBM in services and Dell on the commodity front, the company is not fighting "a ton of wars in a costly, vertically-integrated stack" as IBM is, Fiorina observed.

HPs adaptive enterprise strategy is about "helping a customer build an enterprise that allows them achieve their business objectives more efficiently, she said.

"You have to think about your enterprise horizontally, not vertically, because every process is going to become digital, mobile, virtual. Once you start to think about your business horizontally, there is a set of processes supported by infrastructure. The goal is to have that be simpler, easier to manage, more reliable and more adaptable," Fiorina said.

"Were talking about helping customers instrument infrastructure, applications and processes so they can manage them with service-level agreements. You have to take complexity out. You have to simplify, standardize, virtualize and integrate," she described.

All the hype around the movement toward utility computing or on-demand computing or the adaptive enterprise has created confusion in the IT world. Fiorina took a stab at providing a more crisp definition of HPs adaptive enterprise initiative, describing it as an end state.

"The end state were talking about is a business where every business decision can be supported by the underlying process, application and technology in way thats real time. The business and IT are linked and flexible," she said.

According to Fiorina, adaptive enterprise requires thinking about the enterprise not as a set of independent, standalone islands of automation, but as a set of processes, applications and underlying technologies.

"We think adaptability can be measured across time and range and ease. By time mean when you make a business decision, how long does it take to reflect that change? If you change a price, how long does it take to reflect that in the underlying system? This is an era where how things work together is everything," she said.

"Then theres ease—how hard is it to do those things? You can measure it. Finally adaptive enterprise is a framework that describes our products, services, software, standards and partners."

"Lastly adaptive enterprise isnt rocket science and it is not a Star Trek mystery: it says customers can create a more adaptive enterprise by doing some fundamental (but hard) things. Simplify, standardize, virtualize and integrate processes, applications and infrastructure," she concluded.

Fiorina said HPs software strategy is about enabling businesses to manage business processes and applications and underlying infrastructure "in a SLA-like" manner. Toward that end, HP is investing over $100 million in R&D around its OpenView brand. This year HP also made three small software acquisitions to fill holes in its software line and it will make a couple more, she noted.

Fiorina also warned the audience of IT executives not to "stick our heads in the sand" around the offshore outsourcing phenomena.

"The maintenance of leadership requires an investment in competitiveness. Thats true of countries as well as companies. We find our developers in the U.S. have a skill for system-level innovation that we dont find elsewhere today. We have to keep upgrading the skills of people to move up the value chain. We have to invest in R&D to remain competitive.

Her advice for CIOs?

"Just remember every business decision triggers an IT event. It is your job to figure out how to make that as fast, seamless and cost effective as possible. You have to get the technology right."

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