Seven Questions for the Man Shaking Up HP’s Operations, John Hinshaw
After the toughest year in its history, it may be a while before many HP employees have anything resembling a spring in their step, but the fact is that that there are early, encouraging signs that the turnaround CEO Meg Whitman is trying to engineer isn’t going to be impossible.
When the final book on HP is written (and, win or lose, you know there will be books), one of the primary characters will be John Hinshaw. A CIO by experience — his last job was as CIO at the defense and aerospace giant Boeing — Whitman hired him in late 2011 with the title of executive vice president of technology and operations. At any other company he would still carry the title of CIO, but in this case he has the CIO reporting up to him because his portfolio of responsibilities is wider. Not only is it his role to make HP’s fundamental decisions around IT, but also to reengineer internal processes for how HP does things.
Often you’ll hear Whitman talk about how she’s aiming to simplify how HP engages its customers, and about speeding up how decisions are made. Hinshaw is the man making that happen. He’s the one who has shifted HP to using many cloud-based software products like Salesforce.com, Workday and Docusign. And there will be more cloud deployments coming.
But he also sees his role as showing HP customers, both existing and potential, how IT can be done at a large scale, mixing cloud services with other approaches into something of a showcase, one that he intends to show off. I sat down with Hinshaw recently at HP headquarters in Palo Alto, and my first question was about his portfolio of responsibilities.
AllThingsD: John, I know it’s not your title, but I tend to think of you as HP’s CIO, in the sense that you’re the one who has been digging through the operational trenches looking for ways to improve operations and trim costs. And you did the deals with Salesforce.com and Workday. But my understanding of your portfolio of responsibilities stops there, so could you explain more?
Hinshaw: Sure. Most of my career I was in a CIO role with Boeing and Verizon. So it’s fun to see what’s going on at those companies now. During those years I was a huge HP customer, and so I bought billions worth of HP products and services over the years, and I knew the company pretty well before I came in. The thing that really attracted me to the job was that it would be well beyond what a typical CIO does. It was Meg’s idea for me to go hire a CIO — and I hired Ramon Baez — and for my job to cover a much broader operational portfolio.
So you have a CIO reporting up to you. Can you draw your lines of responsibility for me?
In addition to the CIO function, I run the Global Business Services Group, which is really shared services on steroids. It’s all the internal operations and processes, from executing payroll to marketing collateral to all the shared services across the company. It’s 18,000 people, and there’s a very global portfolio. Then I have global procurement for the entire company. That’s $32 billion of procurement. Then I have global real estate. And then I have global security, which is physical security, brand security and cyber security. Finally, there’s sales operations — all the invoicing, sales compensation work, everything that happens behind the scenes in sales. Meg’s idea was to marry up the IT function with all the other functions that keep the company going. And they’re fundamentally linked. So, let’s take the Salesforce deal. A lot of companies have deployed Salesforce, but if the IT organization is trying to do that, they are looking at it from the point of view of changing their systems and managing their data. When we did it, we looked at it from a process perspective. We designed our sales process, and then the system followed that. So we did the fastest rollout of Salesforce implementation ever. It was 30,000 employees and that made it the biggest ever, too. That’s the unique thing about what we’re doing at HP. I’ve never seen anywhere else that can move that fast at scale. Usually you have one or the other, but we have both.
What did moving to Salesforce, as a practical matter, do for you? What did you use before Salesforce and Workday? Did you see a big operational savings or cost savings?
We used Siebel and PeopleSoft. The big thing is that our sales teams can sell faster. They can now generate a quote right out of Salesforce.com, and could not do that before. They have a comprehensive view of the customer when they are in that product — whether selling software, hardware, services, it’s all right there. Their efficiency has gone up. Their satisfaction with their own work has gone up significantly. It was 7 percent. It’s now 70 percent. The second thing is the speed at which we can implement new functionality. We’ve done four releases so far, and we have a fifth one coming up. We can implement them much faster in Salesforce than we could before. We’re going to have this be the dashboard for the sales team, where they have everything in there. Contacts, contracts, commissions, everything in one spot. We’ve also licensed a product enterprise-wide called Docusign. When we would sign up a new reseller, it used to take five weeks in the whole transaction process. Now it’s five days. HP Financial Services would take two or three days of paperwork back and forth. Now it’s 10 minutes.
Let’s talk about security. We’ve all been hearing the chatter about hacking coming out of China, the warnings from the administration and other companies complaining about being attacked by China. We can only assume that HP has a lot of intellectual property, and would thus be another presumed target. Your networks are probably always being probed, if not overtly attacked. What are you doing about it?
Cyber security is a fascinating space. I learned a lot about it at Boeing. It’s extremely important when you’re dealing with aerospace and governments. The great news about HP is that we have the most comprehensive set of products and services designed for it, and internally I’m the biggest user of all those products and services. ArcSight records 20 billion events a day. We test that at scale before other customers get to use it. We scan all our code through Fortify to be sure there are no back doors and no issues. We’re the biggest user of that product, as well. We use Tipping Point to keep track of how well our network traffic is flowing, and we’ve got that standardized across HP. So my job in protecting HP is easier than it would be at other companies, because I have all these internal products at my disposal. And then we have a services business that also offers security, and they share information. We recently hired a new guy, Art Gilliland, from Symantec, to run HP’s security products. And Brett Whalen is our chief information security officer, and they’re linked up to make sure they’re building security into all our products, as well.
So let’s talk about 2013. Meg has called it the repair-and-rebuild year. What does that mean to you?
I think we are laying the operational foundation for the turnaround. Each unit has plans and strategies that they’re going to execute on. And they need technology and processes to make it happen. From the sales processes to, say, in our Enterprise Services business, to get the right sales tools to be able to execute there. For example, there’s a new matching tool that more effectively matches the labor force to what is needed in new contracts. So when you have a contract that is winding down, with 100 great security professionals, and there’s another contract over here that is similar, we can quickly match them up and go. That has really helped. We’re doing a lot as well in subcontracting. So when we win a contract we staff it with HP people, and then staff it with subcontractors, and there wasn’t a real automated process for that. So we’re implementing a tool called Fieldglass, a cloud-based product. From the moment a manager needs a subcontractor, to timekeeping and invoicing, it’s all in the cloud. Similar for our software business.
You must have had a lot of resistance, shaking things up as you did. HP is an older company with a lot of ingrained processes. What did you do about that? What was the biggest assumption you had to blow up?
It’s interesting. Because I think of the open communication style that Meg has created, there hasn’t really been a lot of resistance. I would have expected it. In fact, I think people were hungry for change, and more automated processes. If you look at the previous five or six years, there was less investment in IT, even though we’re the world’s largest IT company. It was more focused on cutting costs in the IT function than investing in tools. People were pretty excited about a new sales process and a new HR process. The area that required the most collaboration was in sales. You had to get all four business units on board with the same process, one view of the customer. That took a lot of upfront work to get that right, and everyone was used to doing it in a certain way. But we got there. Now we’re the largest Salesforce customer ever. We’re the largest Workday customer ever. We’re the largest Fieldglass customer ever. We’re the largest DocuSign customer ever.
Will you do more cloud deployments? Is there anything you won’t put on the cloud?
We will. We’re going to put all our travel booking on the cloud completely with a third-party provider. There will be more procurement. Right now, we’re using SAP’s Ariba. We’re implementing Hana, which will help us close our books faster. Workday will take us through the end of the year. Today, I think manufacturing and financials in the ERP and MRP space at this scale isn’t ready for the cloud yet. If you look at our SAP implementation today, manufacturing for financials, it’s running very well. So that’s running in-house on HP servers. I think in a few years it will be ready for the cloud. Right now, it’s about the complexity and scale, and the number of transactions that have to be processed at scale. I think it’s just a matter of time, but today the workloads are too large to run on the cloud.