Many things have been said about the HP IT Transformation and how we turned the business upside down. Randy Mott even described the three big mistakes made during this journey. HP leads IT transformation by example. And I could go on like this. However, while the transformation of corporate IT receives a lot of the limelight, there is another far-reaching transformation ongoing, and that one concerns the R&D IT.
Like in many companies our R&D engineers used to have their servers under their desks, managed by themselves, and completely out of control of the central IT department. When you started a new project, you found the hardware, decided what software you would use and went to work. This resulted in a limited ability and incentive to leverage from team to team, from project to project. If by accident you used the same software, you would have different versions or at least heavy customization making it difficult to exchange information. We discovered this had following implications:
- Engineers were losing a fair amount of time addressing IT issues rather than performing R&D (estimated to represent up to 20% of their time)
- The lack of information sharing reduced the re-use of components and subassemblies
- License costs were extremely high as software was acquired by the engineers themselves for the purpose of each project
We decided to take advantage of the data center transformation performed for corporate IT to transfer the running and management of the R&D IT infrastructure to IT, while standardizing the tools. The objective was to have the engineers spending 100% of their time doing research and development, to drastically increase re-use and to diminish license costs.
This was obviously not an easy journey. At the start we got a lot of pushback from the engineers themselves. They felt they would lose control. We wanted them to be very creative, but at the same time were forcing them to use specific tools,... and processes, as we realized we had to redesign and standardize processes along the way.
Learning from the three big mistakes made in the IT transformation, we asked the engineers to register their applications at the start of the journey. A number of them did. Others, as would be expected did not. When we sunset and migrated the first applications into the data center, a number of homemade interfaces suddenly stopped working resulting in furious calls to the IT department. Well, guess what, these were interfaces to applications that had not been registered. It became very clear this was going to happen and engineers better participated.
Beyond the hiccups, it was the close collaboration between teams of engineers and IT that allowed the definition of standards for the organization. The combined team made decisions as to which applications would be used moving forward.
One of the issues the team ran into was response latency. Indeed, HP's three double data-centers are all in the US, while our R&D departments are scattered all over the world. Particularly in software and PCB design, having all applications running in the data-centers proved to be too slow. So caching servers were established around the world. The principle of having the master data residing in the data-centers remained, but the applications ended up being run out of remotely managed caching servers, allowing centralized management/backup etc. while providing the engineers with satisfactory response times.
IT got standardized and common tools, reducing complexity and costs and enabling common processes. Addressing the communication issues removed the need for "shadow IT". The engineers no longer needed to spend time managing their IT environment, freeing up 10-20% of their own time. This improved the productivity of the groups. Standardization of tools & processes helps focusing the innovation on the customer.
HP announced its quarterly earnings this Wednesday. During the earnings call, Mark Hurd was asked why we are spending less on R&D in 2010 than in 2000 when we were a company half the size. His answer includes following "...we're in a mode to look for processes that we can standardize. Simple things like testing, QA, how many development tools we've got. All of these have been, because of acquisitions, very random and very unique, and very, if you will, siloed.
So our ability to get standardized on those processes gives us an opportunity to take out cost. And the way we look at R&D is we don't look to Cathie's point, we look at R&D in the context of overhead, maintenance and innovation. What we are trying to do is get the innovation dollars up. So when you look at the total R&D spend, it's down, and yet the yield to the product road map is up. So, when you look at the number of introductions of products that have had meaningful change in share positions, that number is actually up for us. And that's what we want to measure. We want to get more innovative products into the market sooner."
Even if the R&D IT transformation was not the only reason, it sure participated in achieving the objectives described by Mark. What about you? Do you recognize yourself in what I described at the start of this entry? We are happy to share our experience, so don't hesitate to contact us.
There is a lot of discussion about Green IT, and there is a reason for it. According to the "Smart 2020: Enabling the low carbon economy in the information age" report from GSI and The Climate Group, "In 2007, the total footprint of the ICT sector - including personal computers, telecoms networks and devices and data centers - was 830MtCO2e, about 2% of the estimated total emissions from human activities released that year. "
The same report points out that "ICT could reduce global carbon emissions by 7.8GtCO2e by 2020, an amount five times larger than its own carbon footprint."
It is wise to continue reducing the carbon footprint of our IT equipment, but we should in no way reduce the use of this equipment in its capability to help diminish the human carbon footprint. This is why we are complementing our Green IT focus with a Green Business approach. We call it "project 98", in reference to the 98% of greenhouse gas emissions that are not originating from the use of ICT.
To thank you for being a regular reader, I want to make you an offer. If you are interested in this area and want to learn more about it, you have the opportunity to get a copy of the HP limited edition of the "Green IT for Dummies" guide. Obviously, the book is in electronic format, only print it if absolutely needed.
The European Community is also increasing its focus around using ICT to enable the low carbon economy. The EU stated that these technologies can reduce total carbon emissions in Europe by up to 15% by the year 2020. For the ones who are interested, the full report is available here. DigitalEurope, representing the ICT industry, reacted two weeks ago on the EC's communication in this area by issuing a statement.
The EU initiative focuses on three areas, the reduction of greenhouse gas emissions from energy consumption, the diversification of sources of fossil fuels used in the EU and the better management and development of gas and electricity markets. The manufacturing and supply chain space does not seem to be part of the current initiative unfortunately, although they state that ICT enabled systems can reduce carbon emissions in transport logistics by up to 27%.
Road transport in Europe is expected to increase by 50% by the year 2020, and double by 2050 according to IHS engineering. Well, when traveling from Antwerp to Rotterdam, two out of the three lanes of the motorway are already blocked by trucks. So, an increase of this magnitude will grind road transport to a halt, which will force other means of transport upon us. Want to be smart? Maybe it is time now to start experimenting with those and avoid being trapped in the congestions.