Tuesday, May 28, 2024

Operations + IT: An Arranged Marriage That Works

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While the news from the trenches isn’t good for Hewlett Packard these days, its Compaq merger has led to some lessons-learned about aligning IT with the business, writes HP’s Craig Flower.

Almost every large company faces the challenge of getting IT to work side-by-side with business operations so the two function in lock step.

Within most companies, these functions as completely separate entities. The challenge before CIOs is to institute bold change to break down internal silos, deliver more value to customers, reduce costs and become more agile.

Inflexible legacy systems, a lack of necessary skills and a misalignment between IT and business needs prevent a company from maximizing efficiency and effectiveness.

When HP announced its merger with Compaq, it became clear that its business processes and IT had to be agile to respond to the changes the company was undergoing. We used the merger as an opportunity to reinvent the company in some fundamental ways.

HP synchronized business and IT functions by combining its global operations (GO) and IT department into one unit — GO+IT — and effectively created a fast, flexible, cost-efficient link between its portfolio of products and its customers.

By the time the merger was substantially completed, HP had pulled $3 billion in cost out of the company with a direct impact on operating profit.

But that was yesterday. And as the old clichi goes: ”What have you done for me lately?”

To continue the momentum in this post-merger period, HP remains focused on simplifying and standardizing business processes across HP and developing more efficient, cost-effective and customer-centric capabilities.

And the tool for that continuing change is business process architecture (BPA).

BPA is a holistic framework that ties together all the elements of the company’s operations, from business processes through business applications, down through the IT infrastructure. The idea is to drive company-wide changes in business processes and IT with a ”top-down” approach.

The first step is to map key business processes within the company, across marketing operations, sales operations, order management, supply chain, finance and HR. Then set specific targets for increasing process commonality across different business units and different geographic regions.

The HP HR department is a textbook example of a successful implementation of business process architecture company-wide.

At one time, virtually every HP region and business unit maintained its own HR system, with a total of 700 different interfaces and seven different HR data warehouses. Now the entire HR function is standardized worldwide with a single, secure HR portal. This portal makes it easier for employees to access information. It also saved HP $50 million with a six-month ROI.

This article was first published on CIOupdate.com. To read the full article, click here.

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