Posted by Tom Foremski - April 3, 2008
Early last year, Hewlett-Packard quietly added a new C-level executive position: Chief Administrative Officer, and appointed Jon Flaxman, a 27 year veteran. His mandate is to re-engineer HP's global business processes, to make them more efficient, more productive, and to improve asset management.
HP clearly expects a lot from Mr Flaxman. He reports directly to CEO Mark Hurd and he is on HP's elite 11 member Executive Council Leadership Team.
With a US recession looming, his job is going to be critical to HP's performance, if there is any industry-wide downturn.
"We spend more than $1bn a year on travel, we spend more than $16bn on procurement, we have office space in multiple countries equalling about 900 soccer fields. How do we make the best use of that real estate? And how can we improve our business process? My job is to build shareholder value," says Mr Flaxman.
If I were a HP business group manager I'm not sure I'd be happy to get a message that Mr Flaxman called. Because that could be a sign that his team is taking a close look at how business is being done and what can be improved, and what can be shifted.
Building "shareholder value: can be code for unpleasant changes such as cutting jobs and ratcheting up work loads. But it doesn't have to be that way, says Mr Flaxman. He points to HP's increasing head count and that he is looking at ways to better deploy staff, and use HP technologies to make his teams more productive.
A key chunk of the drive for operational efficiency is HP's shared services group, which consolidates many operational tasks that were previously handled in separate departments. Its shared services group is a way HP can in-source rather than outsource--and gain the same benefits and more.
Another key initiative has been to significantly reduce the number of suppliers while at the same time strengthening those partnerships to enable closer cooperation on product and service launches.
Call centers are also an important focus because that's where customer retention plays an large role. And there are other HP business groups where improvements can have a large impact on overall performance.
"You can't just take one business and analyze it. You have to consider the whole process and where it fits into the company's strategy. And how it affects our other business groups."
What are the metrics for this? "We constantly benchmark ourselves. We look at the industry and also at our competitors. But our goal is not to have the best business process in the industry right now. We want to go beyond that. Because if we just focus on today's benchmark, by the time we reach it, it will have moved on. We want to be ahead of that trend," Mr Flaxman explains.
HP uses a lot of its own technologies. For example, to reduce travel costs, it has set up 38 Halo rooms, which feature its high-definition telepresence video conferencing technology.
HP has also been consolidating the number of its data centers and using its technologies to manage the resulting massive numbers of servers and storage systems. HP's data center management tools, and virtualisation technologies, free up its IT experts to work on new projects. HP is building a state-of-the-art IT architecture to support its aggressive "everything" as a service strategy.
[Please see Essential Viewing: Chief Strategist Shane Robison]
HP's technologies can also manage its power use and control its carbon footprint.
"I focus a lot on green technologies. We have a goal of reducing our carbon footprint by 15 per cent by 2010, (compared with 2005 levels)," Mr Flaxman says.
And as HP acquires companies (Opsware, Mercury Interactive), Mr Flaxman is there to make sure that those businesses are integrated into the HP way of running a business. This speeds up their contributions to the bottom line, which is always welcome.
Chief Strategist Shane Robison on HP's Services Strategy:
[I was happy to notice that if you Google Shane Robison, Silicon Valley Watcher pops up in the number 5 slot, The Inquirer is number 4, and Forbes is number 3.]Tweet this story Follow @tomforemski
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