Jotting Number 86, by Joe Podolsky:
From: joe_podolsky@hp.com
Date: September 15, 1999
The title is my way of being cute. I'm going to cover three viewpoints with one dilemma:
Christensen says that, in the presence of a "disruptive technology," organizations that do what's right for their existing customers and stockholders are likely to suffer massive eventual failure. The classic examples are railroad companies that were blindsided by cars and airplanes. Their customers were large coal and steel companies who wanted faster and cheaper bulk services. But providing all that kept them from noticing all those pesky automobiles that could barely go 30 miles per hour, required a chauffeur to run them, and couldn't go anyplace anyway because there were no roads or gas stations.
E-services is probably the most disruptive technology business (and other organizations) have faced, arguably since the invention of moveable type or (as I claim in Jottings 85) since the implementation of personal timepieces. E-services will change most aspects of the way we live, but until they become pervasive, we have to work and play the way we have for most of the 20th Century.
Here's the basic dilemma: How much of our industry-wide energy and resources should we put into sustaining and improving the way we live and work now, versus preparing for the compelling but still fuzzy e-services future?
HP EC sells industrial strength computing to big customers who need that. We're appropriately proud of the speed and reliability of our hardware and software and of our ability to continue to provide more and better products at ever-decreasing costs.
Here's the HP EC dilemma: We in HP EC see those pesky e-services out there on the horizon. In fact, we're encouraging, developing them. But, the truth is that, during the next 3 - 5 years, HP EC has to generate at least $15 - $20 billion in annual revenues. Even the best case scenarios for e-services say that e-services won't generate that anything close to that kind of money until 2003 or 2004.
So, in the meantime, we have to keep on selling the big infrastructure hardware and software iron, both to large company IT departments and to companies who are offering now and building future Internet services. And, since our resources are limited, and since we have to meet quarterly growth and profit goals, what's the right balance for us between sustaining and improving our current and evolutionary product offerings versus preparing for the compelling but still fuzzy e-services future?
By now you can see where we're going with this. IT is literally where the rubber meets the road in this dilemma. The question of resources translates instantly into a question of IT talent and budget.
To belabor the obvious but to meet my anal need for consistency, here's the IT dilemma: How do we in IT departments in large companies meet the growing needs presented by traditional and evolving batch, client-server, and web-based applications that help immediate business needs versus preparing for the compelling but still fuzzy e-services future?
At the ground level in IT, this dilemma becomes even more complicated because CIOs always have three sets of customers who sometimes have different and even conflicting priorities. From talking to some of HP's customer CIOs and from looking at what HP IT and HP EC IT are doing, here's how I think we should deal with the IT dilemma (and how HP EC IT is acting as a role model).
The first customer set is the company's upper managers, the CIOs bosses and peers. These folks have different key issues depending on the company's unique position in its life cycle, but their focus is usually external, strategic, usually over a time period of years or at least several quarters.
CIOs meet these needs by keeping their colleagues up-to-date on how IT technologies can affect the strategies of their company, how leading edge competitors or role models are creating new opportunities and business models. The CIOs must definitely keep their colleagues informed but also fascinated and tantalized about future possibilities. No one company, much less one part of a company is going to take advantage of all the possible futures. So, CIOs need to watch carefully to see what seeds take root and then to water those young ideas with specific and more detailed proposals that will take full bloom in coming years.
It is in this role that CIOs can best use their knowledge of e-services, to paint for their colleagues the expanding possibilities and to be prepared to join with their colleagues some specific implementations that make business sense. Admittedly, especially in HP EC, this part of the CIOs job is a little easier than in most companies, since the top manager are the same people who are preaching e-services to the world. But even the most fervent believer in the salvation of the world by e-services may have different priorities when investments for the future may cause problems in short term quarterly results.
The second set of customers is the company as a whole. This is IT's traditional role. Efficiently managing the IT infrastructure is now a business basic in all large organizations, and most organizations are also completely dependent on application processes that are largely based on IT capabilities.
It is in this operational role that the IT dilemma is most painful. Our existing internal customers always need more capability for less money, and there are never enough resources to fully meet this demand. How then do we justify whatever we squirrel away for building for the future?
Here's how. What we are doing in HP, and what we recommend for our IT customers is to immediately focus on two areas: bulletproofing the infrastructure, and using new web and e-services for internal uses as they become available. Success in these areas will have the dual effect of helping with short term issues while preparing for the future.
Bulletproofing the infrastructure is an easy tactic to state in principle, but it's tough to do efficiently in practice. All it takes is perfect execution of basics such as these: use inherently reliable hardware and operating system software, use the power of the OpenView tool to appropriately manage networks, use appropriate storage access and backup strategies, have an effective user support and help desk process, etc. The key is to learn to do all this efficiently. It's tough enough to create flawless reliability when money is available for redundancy, but it's an even greater challenge to get the job done at costs that allow for business competitiveness.
Having a robust, reliable IT infrastructure is necessary but not sufficient if we're going to lick this dilemma. We in IT must ourselves move into cyberspace. There are lots of ways to do this, and, while HP has a lot still do, we're among the industry leaders in many of these capabilities. Incidentally, many of the projects are in marketing rather than IT.
One general area can be called "doing internal work on the web." This includes managing our far-flung personal computer and server network using tools such as PC-COE and OpenView. This includes doing all of our travel planning and expense reimbursement with web-based tools. This includes maintaining project schedules and documentation on secure web sites. Our personnel transactions are on the web; we see web-based video clips of our managers who speak at meetings. We meet in eRooms, go to web-based training, and arrange for conference rooms and catering. And all of this is done with appropriate security, using firewalls and encryption tools that we offer to customers. We truly eat our own dog food.
The next step, again an area in which HP is a leader, is to use the Web for marketing. Our external web site, hp.com, has long been a source of information, but it was often hard to navigate and inconsistent in look and feel. We're learning how to improve all that, again giving us lessons that will be useful as we move toward e-services.
We are even more aggressive at trying new things and learning with internal web sites, especially those that serve HP EC. HP's problem is again identical to those of our large customers: how do we get late breaking news to the HP troops spread all over the world. The answer, of course, is the web, and we're learning how to do that so that we'll be ready when we get, as we inevitably will, to some sort of e-news e-service.
And, in yet only a few cases, we are experimenting with real e-services to support HP EC internal activities. The most obvious of these is our use of the Ariba.Com e-service for purchasing. But we are also looking at e-services that will give us peak load and disaster recovery backup using embryonic "mips on tap" and "bytes on tap," computing and storage resources that are available on demand. These are industrial strength services yet, but they'll get there, and we'll help them, for the benefit of both our customers, and ourselves by meeting our current needs while these services are learning and growing.
The dilemmas are real. E-services are still a vision. But the reality is coming closer. I know e-services will be real in some form when I hear our competitors (e.g., Scott McNealy) talking about them as though they invented the idea. We're not there yet, but what's neat about all this is that just working toward the vision will pay off today. I'm reminded that, in the days of the California Gold Rush, the durable success stories were not the miners who dug for gold but the tailors, and carpenters, and bankers, and storekeepers who came to work, striking it rich a day at a time. That's how we in HP IT are solving the e-services dilemma.