Global CIO: Hewlett-Packard Attacks Innovation Gridlock That's Killing CIOs - InformationWeek

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5/10/2010
02:24 PM
Bob Evans
Bob Evans
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Global CIO: Hewlett-Packard Attacks Innovation Gridlock That's Killing CIOs

CEOs are putting extreme pressure on CIOs because IT drives too much complexity and not enough innovation. HP says its broad new strategy can help.

For years, as IT vendors have watched their CIO customers suffocating in a quicksand made up of brittle, expensive, and inflexible systems, most of those IT companies have been eager to help but too often have offered lifelines that require three months' training, or that disintegrate in quicksand, or that are so unwieldy that they hasten the CIOs demise.

All of these vendors have talked about how they understand that the CIOs' nemesis is the 80/20 monster that sucks up almost all of the IT budget for maintenance and plumbing and leaves next to nothing for innovation and growth. And too often, their talk has been about this product or that technology or this software scheme or that architecture or some other three-letter acronym.

And as they talked, the old CIOs sank and new ones stepped in unknowingly up to their waists.

But today Hewlett-Packard is hoping to change all that by confronting head-on the big, ugly, and seemingly intractable problem that CIOs have been fighting since the abacus was introduced: how do I stop pouring so much money into internal operations and maintenance so that I can liberate some and then a lot to apply toward customer-facing growth and innovation?

This marks a huge step forward for not only HP but also the entire IT industry because I believe it will force other hardware and software companies to step forward and also address very specifically the 80/20 millstone that we at Global CIO have flagged for the past two years as an absolute top-level priority for CIOs.

And it at last begins to give CIOs some specific help and roadmaps and ideas for how to address this problem that has led many CEOs to question the value of their internal IT organizations, their CIOs, and the substantial dollars those operations burn through each year.

Hewlett-Packard's Tom Hogan, former head of the company's software group and now executive vice-president of sales, marketing, and strategy, said in a phone interview yesterday that a sweeping research study has given HP "some empirical data on things we were feeling anecdotally."

"But even we were surprised with the level of concern some business executives are feeling around this idea of what we're calling 'innovation gridlock,' " Hogan said.

"One out of two business executives had the point of view that their organization was suffering from gridlock in the pace and quantity of innovation that was coming out of their IT departments, and six out of 10 believe that gridlock is preventing their companies from keeping pace with their competition -- and that's a very big, big deal for CEOs," Hogan said.

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The cost of that poorly invested money -- trapped in systems that can't perform at today's heightened levels and don't deliver real business value -- comes in three areas, Hogan said: the opportunity costs of failing to be able to capitalize on business opportunities because IT couldn't keep up; wasted or unproductive costs of having to support legacy systems that don't add value to customers; and third, the cost of being slow, manifested in not being able to keep up and learning the hard way that "time is still money," as Hogan put it.

To reverse those trends, Hogan said, HP's new campaign to wipe out innovation gridlock is all built around putting into the hands of CIOs a wide range of tools -- from consulting to hardware and software and services to financing -- that let them get out of the trap of being the acting director of infrastructure and into the required role of customer-facing business leader. It's an idea whose time has come:

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