By Peter High, published on Forbes
Naresh Shanker was named CIO of HP Inc. prior to the company’s separation from Hewlett Packard Enterprise (HPE) This was the apotheosis of a remarkable career. He had been an IT executive in the technology industry for many years, including the CIO role at Palm until its acquisition by HP. The separation would be the biggest challenge he would yet face in his career.
At the time of the separation, there were some who believed that HP Inc. would be substantially weakened by this separation. Moreover, Meg Whitman, who had been the CEO of HP Inc. remained as Chairman of the company and would take over the CEO role of HPE. HP Inc. would be led by a new CEO Dion Weisler. Remarkably, the separation proceeded with few issues and was on time, and the company has flourished.
Since the separation, Shanker turned his attention to a major digital transformation of the business. The legendary OEM that had been the founding company of Silicon Valley would need to truly become a digital enterprise. Shanker noted that with the hyperconnected economy that we now have, HP Inc. needed to reflect this in its own business. In this far ranging interview, he covers all of the above, and offers essential lessons for other companies who must transform in a comparable fashion.
Peter High: You are the Chief Information Officer of HP Inc. HP Enterprise [HPE] separated from HP Inc. in November of 2015. This was one of the biggest separations in corporate history, and you were involved on both sides of that transformation. Can you talk about the scale of separation, and how you thought about planning the separation of a roughly $120 billion revenue company into two roughly $60 billion revenue companies?
Naresh Shanker: We first looked to determine the mandatory minimum requirements that we had to meet from a regulatory and compliance perspective. Our goal was to prioritize and execute the separation into an independent company within 12 months. That is not a small feat, and it has never been accomplished before with a high-tech company of this magnitude, scale, and complexity.
After defining the scope of the mandatory requirements, we looked at what it would take to fundamentally stand up two public entities. HPE focused on our compute network storage solutions coupled with HP Software, as well as HP Enterprise Services. HP’s focus is predominantly around our printing business, our personal systems business, and our 3D additive manufacturing business.
A major task was to separate out the architectures from the infrastructure layer, the wide area networks, local area networks, and the underlying solutions, which is the applications fabric. Several facilities and sites worldwide had to be separated and secured so that we could deem ourselves separate identities and meet all the financial and regulatory requirements of standing up our public companies.
We successfully achieved that in 12 months. After that separation was completed, we were able to stand ourselves up as two public companies. We then embarked on using this opportunity as a catalyst for each of our independent companies to transform and reinvent ourselves. We took advantage of the separation so that we could compete in our independent markets more aggressively and in a more focused manner.
The first thing we did was lay out a five-year roadmap. 2015 was the separation year. 2016 was the year of standing up the company and our independent operations. IT had a lot of work to do here, including rebuilding all the operations and capabilities ground up, from the infrastructure layer to the applications layer, and putting in place all the operational metrics and SLAs so that we could stabilize and run our operations on a 24/7 cadence.
2017 was focused on starting our transformation journey. Our goal from 2017 to 2020 is to complete the execution of our transformation journey. A significant portion of that is in flight, and a lot of it has already been completed.
Our current strategic focus is pivoting from being a transaction-oriented company, where our systems are designed around transactions and physical goods flows, to being a more contractual and digital centric organization. How do we move from a hardware player to being more of a solutions services player? That is what we laid out from an IT architecture point of view to start building the foundation of this journey so that we could pivot ourselves to being a digital company.
We focused on two things: one is supporting an omni-channel go-to-market strategy, and the second is everything-as-a-service play, which involved solutions and services across all lines of business. The separation served as the catalyst to help us pivot from a physical goods and hardware OEM manufacture to more of a digital goods solutions and services technology company.
As we go forward, we will continue to evolve our solutions and services with more user centered experiences and designs in mind. Our focus is ensuring that the user experience, the partner experience, and the customer experience are delivered with a digital mindset. Using the separation as a catalyst, we have fundamentally transformed ourselves to become a digital player in the industry.
High: The transformation that you have been leading is in many ways the transformation that is necessary across a number of industries. As the CIO of one of the original Silicon Valley companies, and one which is now transforming from a manufacturer of physical goods to being focused on digital solutions, can you talk about the changes that are necessary from an IT perspective to deliver that transformation?
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