Motorola Shows Dramatic Savings in IT Operations Costs with 'ERP for IT' Tools Based on HP PPM

Transcript of a BriefingsDirect podcast with Motorola's Judy Murrah on cost optimization using PPM, recorded at HP's Software Universe conference in Washington, DC.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: HP.

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series, coming to you from the HP Software Universe 2010 Conference in Washington D.C. We're here the week of June 14, 2010, to explore some major enterprise software and solutions trends and innovations making news across HP’s ecosystem of customers, partners, and developers.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions and I'll be your host throughout this series of HP sponsored Software Universe Live discussions.

We're looking at a compelling case-study today, Motorola, in the area of productivity, cost optimization, and their IT efficiency efforts -- a winner of HP's Excellence Award this year. We're going to hear more about that from Judy Murrah, Senior Director of IT, at Motorola. Welcome to BriefingsDirect.

Judy Murrah: Thank you, Dana. Great to be here.

Gardner: As I said, you've won an Award of Excellence here at the HP Conference. You have also won a CIO Magazine award recently. Tell us a little bit about your role and, why cost optimization has gotten you these accolades?

Murrah: It certainly was a team effort. My role at Motorola IT is in what we call CIO Operations. I'm responsible for our project management office (PMO) portfolio, quality, communications, and other activities that support our IT operations. Cost optimization is on everybody’s mind these days, especially with the economy the way it is, and with many business initiatives out there.

For us, at Motorola, it really was driven by the pace of change that our business needs to take at this point. You don’t really think too much about change and cost optimization being related, but we have had, over time, a very complex IT environment grow. We have thousands of systems in a company that has grown organically and through mergers, acquisitions, and divestitures.

In order to really be part of the business imperatives to move forward in next-generation business processes, it was too complex to make changes. So, we focused on reducing those systems and doing it in a way that was directly aligned to business change and the directions they would like to go into.

Gardner: What are the requirements from the business side? A lot of people are trying to align their IT efforts with more of what the business is looking for. Of course, that’s also a changing game at this point. Many businesses are dynamic in nature. How does the cost optimization fit in, when you're also trying to align IT with business?

Murrah: That’s the place where we started and where we saw the magic unfold. We sat with our business partners, top leadership on both sides -- our CIO and the business presidents and executive teams -- and talked through every business function.

Business competitiveness

We looked at it on a scale of business competitiveness and how important that particular business function is to the business. Then, on the other axis, if you picture the famous 2×2 matrix, we looked at the complexity and cost of that business function.

Just to give you an example, if we talk about engineering as a business function, to Motorola, which is a technology company, that’s a critical competitive differentiator, very important, high on the scale of competitiveness. If we look at the complexity and cost of running that today, in Motorola, we have a lot of systems and it’s a high-cost area.

We did that for every business function we have. We laid it out and then talked through where we would like those functions to move in the future. By mapping it out visually, it helped us to know that some areas were just costing more money than the value they brought to the business. When you see that, you put data on a piece of paper, and you have a visual, it is a very good way to align business and IT around a common goal.

Gardner: Do you have any numbers; perhaps numbers of projects or applications that give us the size of the scale and scope of what you're managing?

Murrah: We have somewhere in the neighborhood of 1,800 systems in the company. We manage about 1,000 projects per year that flow out of these decisions. We have about 1,500 employees in the IT organization and are very heavily outsourced in some of the functions. So, we have another few thousand folks who we consider a part of the team, and that’s who have all made this happen.

Gardner: We've been hearing a lot here at Software Universe about automation and simplicity, when it comes to the management tasks. Many organizations are dealing with huge scales, as you are. How do you view moving toward the visibility and then into automation, and then into some simplicity?

Murrah: You're talking about the IT tools and the management of all this process. The only way we could have managed this is our implementation of one tool and one process, that’s used across the whole Motorola IT environment -- HP’s Project and Portfolio Management Center (PPM). It gives us one place where we contain our "source of truth" for our investment dollars, for the priorities of the business request coming through, and for the things that we've decided to work on.

In that tool, we have every one of our people resources named, as well as what they're working on, and we look at their utilization and movement to the most critical areas. We also manage our project execution to the timelines, schedules, and budgets that we commit to our business partners.

What’s very important then is that all of this underlying data and management process that we use can be presented back to the business in very good dashboards and reporting, so that we all stay on top of where we are and can be proactive on change, if it’s needed.

Gardner: So, the system of record is what’s working for you. We've had this in business, in other areas, around finance and ledger and so forth, for years. It’s just amazing to me sometimes that we are moving to this in IT, maybe 20 or 30 years behind where business was. Is that how it strikes you?

Justifying the investment in IT

Murrah: That's exactly right. I always talk about how IT is sometimes like the cobbler’s children, as the old saying goes. It’s very difficult to justify the investment in IT tools at some points in time, unless you have ones like this, that are showing payback to the business and you use them in a way that everyone is now depending on it. It does become the enterprise resource planning (ERP) system of the IT organization.

Gardner: Do you have any metrics of success? Do you have some sense of any cost savings, either qualitative, quantitative, what did you get from going through this?

Murrah: Well, in the last two years we have reduced our cost structure by about 40 percent. That is a big number to do while the business is operating. We have also, on our large projects that we run through the system, shown about a 150 percent payback or return on investment (ROI) for those. That means that the value of the investment for us was placed in the right places.

We have also, on our large projects that we run through the system, shown about a 150 percent payback or return on investment (ROI) for those. That means that the value of the investment for us was placed in the right places.

We've been able to reduce IT support costs by about 25 percent. Previous to this more consolidated system, we were operating in such silos that there were many people doing the same things. So by consolidating, we eliminated about 25 percent of the wasted work.

Gardner: That’s quite impressive. Now, I know that HP PPM is accessed on-premises and/or as a service. Did you experiment across sourcing options?

Murrah: We did. About a year ago we moved from a hosted environment, internal to Motorola, to the HP software-as-a-service (SaaS) environment. It works like a charm. No issues with performance. We have had great responsiveness from HP. It does help reduce our support cost, somewhere around 40 to 50 percent.

Gardner: Was there any indication that the SaaS model helped in terms of adoption, participation, from the user perspective, did they seem to benefit?

Murrah: Moving from hosted to SaaS didn’t affect usability, adoption, or anything. That really was almost seamless. We were using the same application before and after.

Gardner: Same application, lower cost?

Murrah: That’s right.

Gardner: Can you offer us perhaps some look into the future of what you're planning and managing your ERP for IT, as you termed it. Are there some next steps that will perhaps win you the next award?

Murrah: Yeah, we'll keep our eye on that for the future. I think a couple of areas that we need to work at going forward are more on our application support area. That's bringing the tool to manage resources and activities and support operations, tying it a little more tightly into our financial management, and getting a little more granular on the skills and our ability to move our resources around from place to place.

Gardner: Great. We have been talking about managing complexity and projects with Motorola, which has won an HP Award of Excellence for their efforts. We've been talking to Judy Murrah, Senior Director of IT for Motorola. Thanks so much.

Murrah: Thank you, Dana.

Gardner: And thanks to our audience for joining this special BriefingsDirect podcast, coming to you from the HP Software Universe 2010 Conference in Washington D.C. Look for other podcasts from this HP event on the hp.com website, as well as via the BriefingsDirect Network.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this series of Software Universe Live discussions. Thanks again for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: HP.

Transcript of a BriefingsDirect podcast with Motorola's Judy Murrah on cost optimization using PPM, recorded at HP's Software Universe conference in Washington, DC. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

You may also be interested in:

• HP's Bill Veghte on managing complexity amid converging IT 'inflection points'
• New HP products take aim at managing complexity in 'hybrid data center' era
• HP's Robin Purohit Unpacks Business Service Management 9 a Way to Address Complexity in Hybrid Data Centers
• Delta Air Lines improves customer self-service apps quickly using automated quality assurance tools strategically

HP's Bill Veghte on Managing Complexity Amid Converging IT 'Inflection Points'

Transcript of a BriefingsDirect podcast with HP's Executive Vice President Bill Veghte on managing change in IT as virtualization, cloud and mobility gain importance.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: HP.

Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series, coming to you from the HP Software Universe 2010 Conference in Washington D.C. We're here the week of June 14, 2010, to explore some major enterprise software and solutions trends and innovations making news across HP’s ecosystem of customers, partners, and developers.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions and I'll be your host throughout this series of HP sponsored Software Universe Live discussions.

Please join me now in welcoming Bill Veghte, Executive Vice President of the HP Software & Solutions group. Welcome to BriefingsDirect, Bill.

Bill Veghte: Great. Thanks, Dana.

Gardner: We've heard a lot here about how tough things are. We're used to hearing tough economy stories, but now we're hearing about tough management and complexity stories.

We're also hearing about inflection points. Could describe for me what you see right now in the IT business, as an inflection point or points, and how that relates or compares to some of the past game-changing times in the history of IT?

Veghte: Dana, I spend a lot of time out there with CIOs and IT professionals, and we're at two remarkable inflection points in our industry.

The first is in terms of how businesses are delivering IT, and that's on three dimensions. The first is virtualization. There's a lot of not only conversation, but moving workloads of application services to a virtualized environment. Look at the numbers. People say that over 25 percent of x86 server workloads are now virtualized, and that number looks like it's going to accelerate over the next couple of years.

Correspondingly, there's a heck of a lot of conversation around cloud. People wrap a lot up in that word, but many of the customers tell me they think of it as just another way of delivering experiences to their end-customers. And, in cloud there's platform, applications, and private versus public, but it's another choice point for CIOs and IT folks.

The final piece in terms of IT delivery is that there are a heck of a lot of mobile devices, over a billion mobile devices, accessing the Internet. With the advent of smartphones, a very rich viewing and consuming medium, people expect to have that information.

Those things are incredible tools and opportunities, whether you characterize it in a balance sheet, and moving from capital expenditure to operating expense, or whether you characterize it in anytime/anywhere information on your mobile device. But with that, it does bring more choice points and more complexity.

Breadth and depth

The other inflection point that I'd highlight, Dana, is the breadth and depth of data that’s being generated. You and I both know that digital information is doubling globally every 12 to 18 months. In the midst of all the digital photos or whatever, sometimes people lose track of the fact that 85 percent of that data resides in businesses. And the fastest growing part of that is in unstructured data.

Now, the most precious resource is your ability to take that data and translate it into actionable information. The companies and businesses that are able to do that have a real competitive advantage.

You can put that in the context of a specific business operation. If you're a pharmaceutical, how quickly can you bring a drug to market? You can characterize that in a financial services organization. Do you have better, quicker data and market movements?

You can characterize it in an IT . There's an enormous amount of IT information and data, but how do I parse it out to the things that are going to represent a service desk ticket, and can I automate that so I am not putting people in the middle?

When I think about it in a historic context, I'd highlight a couple of things. One is that we're going through the biggest change in IT delivery since client-server, because of the three delivery vehicle changes that I highlighted. That, in turn, is going to generate a very significant refresh in applications and services.

Given the complexity that I just characterized, there's a real opportunity to bring more of a portfolio approach to delivering those solutions to customers.

You don't have the time deadline in the same way that we did with Y2K, but the CIOs and IT and apps folks that I know, as the economy is recovering, are looking at their application and service portfolios and saying, "How am I going to refresh this to take advantage of these new and different delivery vehicles?"

Gardner: How does that relate to HP? You're relatively new to HP. You had a long and distinguished career at Microsoft, and you've been here for a little over a month or so. How do these inflection points and the opportunity that you perceive for HP come together? Perhaps you could fill in on what attracted you to HP.

Veghte: Sure, Dana. As I looked across the marketplace and at this inflection point, there are a couple of things that attracted me to HP. One, I think HP is uniquely positioned in the marketplace, because it has a great portfolio as a company, across not only services, but also hardware and software.

On the software side, there is a remarkable portfolio of assets within HP, across application development and quality to the operations side. Yet, given the complexity that I just characterized, there's a real opportunity to bring more of a portfolio approach to delivering those solutions to customers.

Doing remarkable things

The final piece that I would highlight is that I worked for many years with HP as a partner. Whether it be Todd Bradley, who I worked with around the Windows business, or Mark [Hurd], as the executive sponsor for the HP Partnership, when I was on the Microsoft side, they're a great group of people doing some remarkable things.

If you look at what that executive leadership team has done over the last couple of years with and for HP customers, it’s exciting to think what we can do over the next five or six years.

Gardner: Speaking of HP customers, they sure are here at Software Universe. There are thousands of what we can call hardcore HP folks. What are they telling you? What have you learned? What has surprised you in your interactions in the last few days?

Veghte: It's been a great Software Universe for us. Compared with years past, there is a degree of energy and optimism in customers that's very invigorating. I've been in back-to-back meetings. You walk in, and they are excited about the innovations that we're bringing into market.

We've had a variety of very exciting announcements, such as Business Service Management 9.0. Some of the announcements were around the ability to automate how you take a production environment and apply it into a text script.

I think that they're constructively challenging us to make sure that we have a set of tools that are effectively scaling into the most complex operating environments in IT in the world.

The areas that customers are highlighting are: "You've got a great portfolio. You're heading in the right direction. Keep that pedal down. Take advantage of the fact that you've got not only fantastic best-of-breed capabilities in individual areas, but that you've got this breadth of offerings. I'm going to evaluate you against my entire solution set."

It starts with the strategy. In fact, there was a great customer meeting this morning. The customer said, "Look, I use you in a bunch of different ways, and I think you've got a great product. Now, what I need you to do is step up and make sure that from strategy, to application, to operation you're delivering that cohesion for me. I see good steps, but I want to see you keep doing it."

I think that they're constructively challenging us to make sure that we have a set of tools that are effectively scaling into the most complex operating environments in IT in the world, and making sure that, as the additional complexity in delivery vehicles that I just highlighted come online, that we continue to make sure that we are scaling effectively to deliver for the customers.

For example, at Software Universe 2010, in the Business Service Management case we announced, not only will we be providing a near real-time dynamic view of IT, but we are doing it across virtualized and cloud implementations. I just came from the session, where we were demoing to 3,500 people the ability to display that information on a smartphone across a variety of platforms -- from BlackBerry to iPhone to a Sprint device.

Gardner: It seems like complexity is the common foe here. ... When we talk about virtualized workloads. And when we have a variety of sourcing options -- on-premises, off-premises cloud, private, colo, hosting -- and also complexity, as you point out, in the number of endpoints or different devices.

Perhaps customers are wondering how to stay up with this accelerating pace of complexity. How could we think about the role of IT? What does IT need to be thinking in terms of itself? How should it perceive of itself in the next few years, vis-à-vis this common sense of budding complexity?

Continuing to evolve

Veghte: Well, Dana, the thing I'd go back to is those two inflection points that I highlighted, because I think they're very important, when we think about the fact that the role of IT continues to evolve.

First, as an IT organization, I have more choices in terms of how I am delivering my application service for and with business. I increasingly become a service broker, because I'm looking across my applications and services and deciding with the business what’s the most cost effective and best way of delivering those experiences for the businesses.

Second is, and we've talked about this as an industry for a long time, the continuing blending of business and IT. A customer from a Fortune 5 company was in a meeting with me earlier this week. He's been in the industry for 25 years, a very sharp guy, and in a deep partnership with HP.

He said that this year there are more people from business operations coming to Software Universe than there are from IT operations. He said, the reality is that whether you talk about it in the context of PPM or application and service requirements, those two functions are intermingling. Given the software footprint and portfolio we have, it’s a wonderful opportunity, but that continues to accelerate.

The final piece that I would highlight is not a change, but a continuity. Even as IT has a broader set of choices, and the relationship with the businesses continue to intertwine more and more, they're not off the hook, when it comes to security or compliance or the availability and performance of the solutions that they are responsible for supporting and delivering for the business. So, it’s important to factor that even as we look ahead.

This has been illustrated time and time again. The most successful businesses have figured out how to constructively apply IT to run a business.

Gardner: Seeing this relationship between business and IT shift and change, dealing with complexity across variety of different levels, looking for that right analysis and information in that sea of data, where do you think the management, the definition of management goes?

Are we talking about an expanded definition of management or the role of IT? If you can manage IT, does that mean you can better manage the business? Is there a coming together of managing IT and managing a business?

Veghte: This has been illustrated time and time again. The most successful businesses have figured out how to constructively apply IT to run a business.

IT tools are at such a maturity and the experiences of IT with the customer experience are so intermingled. The CIO at Delta Air Lines was talking yesterday about her utilization of HP technologies and some of the remarkable projects that she's been through. You listen to that talk and you realize that the reservation system, the way I check in, and my experience with Delta Air Lines is commingled with what you and I would characterize as the IT experience.

It was a remarkable story about that interrelationship with the business, as they were not only dealing with the broad adversity of the business climate, but also were trying to merge with Northwest Airlines.

Gardner: Perhaps we could go as far as to say that for many business over time, IT is the business.

Veghte: Dana, the trick in that is that IT means many different things to many people. The thing I would highlight is that IT has the ability to continue to outsource a variety of baseline capabilities. With that outsourcing capability, as an industry, IT providers, are going to be able to provide more and more. And that gives IT the ability to move up the stack in terms of higher value-add applications and services, and then the business runs through and with IT.

Gardner: So, maybe we could expand it to say, managing the services through IT is the business -- or some combination of the service model?

Veghte: You're a smarter analyst than I am. All I know is that the intersection between the two -- and the resulting customer experience -- continues to accelerate. We look forward, as part of HP Software & Solutions, to playing a great role in helping customers deliver those solutions and those experiences.

Gardner: Well, great. Thank you. We've been talking with Bill Veghte, Executive Vice President of HP Software & Solutions. Thank you so much, Bill.

Veghte: Great. Thank you, Dana.

Gardner: And, we want to thank our audience for joining us for this special BriefingsDirect podcast, coming to you from the HP Software Universe 2010 Conference in Washington. Look for other podcasts from this HP event on the hp.com website, as well as via the BriefingsDirect Network.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this series of Software Universe Live discussions. Thanks again for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: HP.

Transcript of a BriefingsDirect podcast with HP's Executive Vice President Bill Veghte on managing change in IT as virtualization, cloud and mobility gain importance. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

You may also be interested in:

• New HP products take aim at managing complexity in 'hybrid data center' era
  
  
• HP's Robin Purohit Unpacks Business Service Management 9 a Way to Address Complexity in Hybrid Data Centers
  
  
• Delta Air Lines improves customer self-service apps quickly using automated quality assurance tools strategically