The day Randy Mott left Dell for Hewlett-Packard in 2005 it caused a stir in the IT world. At the time, HP was a company in transition. Its CEO Carly Fiorina had been ousted following the most tempestuous period in the company’s history, and the new CEO Mark Hurd recognised immediately that a major change was necessary to stabilise the company.
The HP IT infrastructure was disparate and starting to creak with age. The merging of systems from recent acquisitions Compaq and Digital Equipment had merely served to increase the sprawl of technology and a massive overhaul of the IT system was required. Hurd knew and respected Mott, and set out to lure him away from one of HP’s major competitors, Dell.
The business relationship that had endured for a decade between the two men eased the process and, three months after Hurd started at HP, the deal was done. Not only had Hurd gained a visionary CIO, he had also stung his rival in the process.
Mott’s mission was to overhaul the legacy systems and help turn HP from the bloated leviathan it had become into a lean, mean, agile organisation. If a revolution was needed, Randall D. Mott was the man for the job.
In many ways, Mott is the CIO’s CIO and is credited with helping to define the role. His tenet is that IT should not only support the business, but help to improve its efficiency and boost the bottom line.
IT integral to business “In almost all companies today, IT is involved in every area of the business process,” he says. “If you go back to when I started three decades ago, IT was in back-room applications, or in a part of the business; it wasn’t involved in every area of the business. Today, IT is really a part of everything a company does in almost every industry.
“What’s changed is obviously the integration of these things, the complexity of having to think through any changes you make, and the impact it has, because it’s throughout the company. The challenges are in many ways the same, but I think the breadth in which those challenges now apply to the business, as well as the complexity of integration, are probably the biggest changes.”
Mott’s career in IT started when he joined Wal-Mart in 1978 as a 21-year-old programmer. He rose through the ranks and was appointed CIO in 1994, immediately stamping his mark on the company in his new role. At that time, the data warehouse was a new concept, but Mott could see it would bring an edge to Wal-Mart’s ability to react quickly to market changes. The data warehousing concept matched his unshakable conviction that IT should be aligned with business processes, a revolutionary thought in the 1990s, and the search was on for a suitable supplier.
One of the leading companies in new data management systems was Teradata, then a subsidiary of NCR. Hurd was a vice president at NCR and the deal between Teradata and Wal-Mart started the business relationship that would eventually lead to Mott’s appointment as CIO of HP.
The attraction of the data warehouse was the ability to hold all company data in one place. Mott has an aversion to data marts, where snapshots of sections of the database are stored across the organisation. The data has to be refreshed frequently to keep it current but between refreshes the company is running on historical data. This did not fit in with Wal-Mart’s needs and Teradata offered a way in which the data could be kept in a single store and viewed without first having to create a data mart. Using parallel-processing servers meant that overhead was greatly reduced and accessing data in real time meant that any changes were immediately apparent to the user.
The successful adoption of Teradata proved that Mott’s “business benefit above all” philosophy could pay dividends. In addition, he increased staffing by 40 per cent to enable applications to be produced to reduce Wal-Mart store inventories and speed up the supply chain. These measures helped Wal-Mart to outguess the market, keep prices down, increase profits and reduce wastage. Wal-Mart’s profits had stalled but the shake-up paid immediate dividends with a 14 per cent growth in profit in the first year.
Another lesson that Mott learned was the power of boardroom representation. As an executive member, he was privy to the concerns and initiatives of the business. He believes strongly that IT can only benefit the business if the CIO is involved in the high-level decision-making process. As a board member, the CIO can often support a business initiative by tweaking the IT infrastructure.
Mott’s conspicuous success and forward-thinking approach attracted Michael Dell’s attention and, after 22 years at Wal-Mart, Mott was hired to work the same magic on Dell’s inventory in 2000.
Dell had pioneered the internet as a sales channel. By definition, this meant the company came to rely heavily on its IT systems to drive the business. When it comes to lean, the company borders on the anorexic, and if any enterprise defines just-in-time marketing it is Dell.
The similarity between the requirements at Dell and his previous job at Wal-Mart was attractive to Mott. He had cracked the skill of rapid market response and could hone this at Dell, which now orders parts every two hours and never stocks more than a four-day inventory.
A need for speed One of Mott’s mantras is that “the quicker you get in and get out of a project, the more likely you are to succeed”, and he feels that a single, joined-up plan is the only way to achieve targets.
“I’m a firm believer in moving everything concurrently,” he says. “I’ve seen too many cases where things get broken down into five programmes and they never get finished. By the time you get through the second programme, there are five new two-year programmes. Starting things concurrently is essential because so many things are moving – and it’s not just IT, it’s the business,” he says.
Mott’s holistic approach reaches beyond his remit as the IT chief. Not only does he meet regularly with his teams and the HP global sales force, he also likes to hear from customers about their concerns. These meetings ensure a consistent message across all departments in the company.
In the 1990s, Wal-Mart was a giant within the US, but Dell’s global reach added new complexities to the challenge of keeping the IT department focused. As Mott told CIO magazine at the time: “There are complexities, but my job is to ensure these complexities are not an excuse.”
When the call came from Hurd, Mott was faced with his greatest challenge: to take a disparate IT infrastructure and simplify it without reducing its scope or interrupting business in the interim.
“One of the challenges is that, even though most of us look at the possibilities and capabilities of technology as it is today, the underlying challenge is that most CIOs and organisations don’t have the benefit of today’s technology in most of their operation,” he points out.
“If you look at most IT organisations, there are some old technologies running many applications, and those technologies have to be supported. There are cost implications of that as well as limitations. Obsolete technology is probably the biggest barrier to them being as effective in helping the business as they should be.”
Mott is no supporter of the adage “if it ain’t bust, don’t fix it” as an argument for hanging on to legacy systems. “The other part of the argument is that old systems do break and you have to fix them – that can be costly,” he says.
“Also, they don’t grow. It has a ‘layering’ effect because if you don’t get rid of things and you just keep adding layers, it becomes a big part of the cost structure. If you look at the cost of IT over the past 15 years, it is growing faster than the economies of the world. That’s not a good thing. All of the people and support costs go into keeping these systems going. Because we don’t get rid of things, it is keeping us from being as cost-effective as we could be.”
At HP, this issue has instigated a major project to reduce costs on a more-for-less basis. Mott’s team is overhauling the infrastructure and reducing its number of datacentres from 85 to three paired installations. The server count is being cut from 21,000 to 14,000 by using virtualised consolidated BladeSystem servers.
“The path we set out on just over two years ago is what we term ‘IT trans-formation’,” he says. “We found ourselves having about 5,800 applications. We asses-sed it and decided we should only have about 1,400 applications. We have a lot of duplication in all ages of systems. We’ve got a need to simplify from the standpoint of getting rid of a number of applications that may do the very same function for different parts of our business, and getting the whole area on the same application.
“There’s a lot of business change associated with that and we’re having a major refresh of technology. We were using older technologies that were becoming brittle because of their age. There are a lot of mechanicals on these systems and mechanicals break down. So we need to refresh the technology base and do it on the latest servers and storage.
“We can rework our network and, at the same time, we have a need for better information. We have lots of data in the company and we have lots of data marts – more than 750. The transformation gives us an opportunity to get better, consistent information about the company and be able to look at that across our different businesses in a timely fashion.”
The database change brings Mott back to his old area of expertise.
“We have a strategy around enterprise data warehouse, which is being implemented on our own Neoview technolog. We started implementing it in April 2006, working closely with our product team. We’re really driving to get to a single data warehouse, which no one does today. There are large data warehouses, but no one I know of actually has an enterprise system holding all the company data.”
A side benefit of the single data source is that privacy requirements and security can be more easily implemented to comply with governance directives. Mott says: “Although governance was not a driver for change, all these things that give you control and responsiveness also assist you in security and compliance.”
The transformation of HP is aimed at making it competitive in every marketing channel – direct, web-based and reseller. Mott is also trying to shorten the return-on-investment window and believes that consolidation alone will result in a 50 per cent cut in HP’s datacentre energy bills.
Although the aim of the project is to slim down infrastructure and cut costs, Mott believes that attempts at being frugal can create an unhealthy atmosphere if firms adopt short-term measures.
“The lesson we need to learn is that just trying to do incremental belt-tightening is not going to bring about the results most companies want,” says Mott.
“It is reactive and there’s a better understanding needed of the impact it has on how responsive you can be when the business wants something. It’s not that we don’t have smart enough people, or that they don’t know how to do it, but when you’ve got to do 30 things instead of three to make a change, it takes a lot longer. There is a lack of simplification in the IT environment and a lot of companies are not as well organised as they could be to do that. The first thing we did back in 2005 was to put all IT together to begin with one strategy, one entity, with a single accountability and responsibility, to try to pull things together.”
With the project drawing to a close this October, what does the future hold for Mott? Will he take on another challenge at another company? His immediate response is that the fun is just beginning at HP: “If you think about it, we’re going to get on a base that is more easily supportable and we’ll be able to turn our attention to really optimising the business. Even though we have 1,400 applications, those applications don’t have all the functionality or features we need to really support our business partners and customers.
“When we started, only 30 per cent of our people were on development and 70 per cent were doing support. We will be in a position to have 80 per cent of our people working on innovation when we finish this. We will only need to do something once and leverage it to take the business to the next level.”
Tackling a corporate-wide project takes nerves of steel, but does anything keep Mott awake at night?
“If there’s anything I worry about it’s ‘What did I not think about today that I should have checked on?’ This is why I have a very good team and a lot of people I can depend on. All the leadership teams need to step up and be accountable for their part in the project. When you try to take on things as aggressively as we are at HP, you really need to be able to count on everybody to do their part and take responsibility.”