December 12, 2001

Feature Article

Accelerating Innovation
A small group within Hewlett-Packard gets big results, spearheading innovation and proving that rapid, creative change is well within reach of even the largest companies

By Jane Sogge

Who's driving innovation?
CTOs will tell you that technology can enhance business processes and lower costs, but only if it's wisely applied. So, who within the company is in the best position to bend and twist assorted technologies into an efficient infrastructure, ultimately leading to greater user proficiency and company profitability? Take a look at the results for one company where the practice of leveraging technology for optimizing business processes and the supply chain has become a staffed, formalized program.
It's a common perception that the larger the organization, the more difficult it is to foster and give momentum to innovative solutions. This often leads companies into organizational stagnation. However, this picture is changing and executives at some companies are recognizing that IT groups aren't mere "utilities", they should have a key role in corporate strategy.
HP Operations (HPO), which is a relatively small group within computing giant Hewlett-Packard, provides a case study in successfully driving innovation throughout the company. Hewlett-Packard is taking advantage of this committee, for steering the use of various new technologies, to enhance its corporate SAP operating environment. The move is also a blueprint for future innovation and technology planning.
Probably the best way to understand HPO's mode of operation is from the group's ongoing effort to leverage and optimize SAP applications and services throughout Hewlett-Packard. The roots of this project, in fact, reach back over the last decade when HP IT executives were taking stock of the hundreds of separate data centers that had been established over time, many of which equipped with customized versions of proprietary corporate solutions.
As many large corporations experienced, the then existing network map revealed numerous and unconnected islands of automation and data resources. Marketplace dynamics, changing economies, and timely new networking technologies combined with the Internet all catalyzed a sense of urgency to reexamine virtually every element of the business infrastructure.

People consider themselves as creative and open to new ideas, yet many innovations never see the light of day. Turning an idea into a viable enhancement of business is inherently challenging. It's not uncommon for political matters stand in the way, for new technology to be misunderstood, or people aren't making the right connections between problems and solutions.

Changing the Face and Pace of Business
Clearly, as the HPO group considered the enterprise environment and user communities, if the IT infrastructure itself was to become a real asset for strategic advantage, they'd need to address all the typical corporate challenges — including dealing with multiple languages, data forms, and non-communicating tools.
An initial, critical step that HPO was called to do was to standardize on SAP/R3 as a single enterprise solution. This was judged an important, initial step because the various modules within the overall suite could deal with broad diversity of processes within departments and groups of the geographically dispersed company infrastructure, while moving closer toward the inherent advantages of a centralized repository of data. Moreover, the move would afford IT management and network operating groups a much greater economy of scale.
There was already, in fact a strong case for using SAP in this greater role as the corporate solution. Over the previous decade HP had gradually implemented more than a dozen separate instances of SAP throughout North America. Each entity had their own process requirements that, not surprisingly, discouraged ad hoc collaboration between entities.
Standardization would have clear advantages to make administration and support more effective. More importantly, standardizing could also be a foundation for taking full advantage of industry best-practices modeled in the SAP software. The envisioned migration held several challenges for HPO's planners. For starters, its scope and significance. This was a full, three-tier client/server environment imposing complex data and application sharing across a worldwide communication network.
The configuration sizing, deployment, and centralization accomplished in phases was only the first piece of the next-generational foundation. To maximize the implementation, HPO also had to make sure the multifaceted capabilities of all the enterprise software modules were accepted and that users were proficient in the use of the applications. In large and fast-growing or changing environments, where installation and configuration of thousands of users desktops is implicit, it is especially important to give careful attention to training the trainers. HPO's project managers oriented the training curriculum according to skill and activity levels, even bringing specialists from SAP's corporate headquarters in Germany to train a corps of "basis engineers" in deploying and using software modules and effectively transfer customized knowledge to users.

When major systems projects cross fiscal years, projects may get funding one year, but there is no guarantee that the dollars will be there for year two. This makes it important to go ahead with key infrastructure changes and corresponding business transformation while demonstrating returns on the investments as early as possible.

Tapping in to Greater Proficiency
HP had largely completed the major deployments and migration to SAP by December of 1998. As with major migrations, however, there will be incremental deployments of R/3 functionality in the future by HPO. It also catalyzed changes to IT management practices, which is something that programs for successful corporate innovation must clearly encompass.
Consider how in the legacy environments, the IT management workload was spread among several groups. Failures, then, were inconvenient, but they weren't normally catastrophic to the whole corporation. Using an enterprise solution, on the other hand, presented a new model. Much of the benefit of the centralized model was its ability to unite an entire IT enterprise. This brand of innovation, in the process, opened up dramatic new potentialities for productivity and profit. It also meant that IT management capabilities must be correspondingly enhanced and the infrastructure kept secure and disaster proof because of the consequences across the corporation.
Clearly, an extremely thorough approach in this stage of IT innovation was needed as SAP unveiled new or updated modules that HP was deploying following the corporate migration to R/3. HPO accomplished this by devising the Service Wheel approach. "The Service Wheel enables a very important detail," described Joe Pattin, HPO's transition manager. "It provides a whole-systems view, that is, it encompasses thousands of elements that comprise of service delivery to the company's users and enables a centralized view of it all." The Wheel is divided into eight major sections, such as Networking, Support or the User Component, etc., For each section identified in the first wheel, the deployment team used the second wheel as a checklist to ensure all elements of the deployment were fulfilled.

Figure 1: Hewlett Packard's Service Wheel Approach

Figure 1: Hewlett Packard's Service Wheel Approach

Figure 1. Readers of Geoffrey Moore's book, Crossing the Chasm, will recognize this diagram adapted by HPO to identify all areas of the infrastructure and organization that were impacted by the SAP worldwide centralization. These segments list functional areas for which HPO provides corresponding support, across dozens of groups and divisions, in order to assure consistent, uniform support.

Figure 2. For each functional area of Figure 1, HPO's planners addressed pragmatic details that have been identified for each area.
(Click here to view a larger version of Figure 2 in a seperate window)

In this fashion, the Service Wheel ensures that all detail steps are fulfilled. Consider the Networking function, for example. The standard for successful networking operation requires that the worldwide end user audience be able to access SAP around the clock in an average of two and no more than three seconds. That's because, for SAP to be accepted, end users accustomed to quick local service must receive the same level of response from SAP, even if access is now thousands of miles away.
Once the standard is defined, the next step is to identify and obtain needed elements of the infrastructure backbone, and then develop and apply metrics that verify success, such as measuring the number of packets handled in a specified time period or determining appropriate turnaround times for application performance.
Ideally, using this approach, every single service needed for successful operation is consistently identified and its execution accounted for. In fact, a single individual - the Transition Manager - is accountable for just that. He or she provides the customer with an ultimate point of responsibility for ensuring that all components are integrated and delivered. Other personnel on the team tend to specific areas of the Service Wheel according to their expertise, such as network, support, database or GUI specialists.
Let's look at two other aspects that are closely associated with the Service Wheel, both essential to the successful outcome. "Responsibility for sizing and properly configuring the servers in this environment falls to the SAP Planning Team," said Jo Morano who provided IT engineering consulting specifically dealing with sizing, configuration, performance, and capacity planning. Technical sophistication of the infrastructure is not the aim.
"Today, corporations have much more specific aims," notes Morano. "Solution innovation these days frequently centers on customer-centric processes or new B2B initiatives, for example. As such, IT executives are under pressure to reinforce the infrastructure and this is something we collaborate with them in a number of ways. The first steps are made by properly sizing and scaling servers to the SAP processes, yet goes well beyond this by addressing requirements for high-availability, backup, security provisions, as well as enabling service level assurance."
"From work with customers as well as other HP groups using HP servers," described Pattin, "we know that scaling the server to the particular application and associated database is key to performance and user service levels. We used our own documentation and server sizing worksheets and discussed requirements with our colleagues at SAP." The group developed a detailed projection of business's growth needs over the next six months before configuring servers for the HP user group.
As a deliverable, this planning is what "glues" the segments of the Service Wheel together. Managers experienced in enterprise transitions will notice the lines in between the segments of the service wheel and realize the importance of transition managers who have responsibility for these spaces, can deal with unforeseen issues typical of complex projects. In this role, Joe Pattin and I aided HP businesses in their 'transition' from legacy environments to SAP's R/3. As such, we were responsible for coordinating and ensuring that all the team came together to deliver the whole product.
"It's also very important to go back every quarter in order ensure everything is operating well within operational and service level thresholds," added Pattin. "The aim here is the ensure that these innovations meet our customers' high expectations and are continuously supporting the goals of the SAP centralization program."
The point here is that the next generation of innovations becomes easier to introduce.

Finishing Touches
Innovation should not extend solely to improving company users effectiveness in their business roles as above. HPO's innovation-fueling also powers up the IT department. HPO demonstrated how the application standardization also enables personnel in the operating center, who may be monitoring several dozen servers across the network, to know they are receiving the same alert messages, with the same incident management procedures, as personnel will have on other shifts. As organizations continue to disperse over the globe, standardized IT processes will increase in importance. The success of global deployments will hinge on tight management and service-level operation, regardless of location.
HPO's successful standardization effort supports two-tiers of benefits for HP. First, it illustrates what can be accomplished with the SAP platform on a large scale, and how the platform can be reshaped thereafter according to need. This was an especially timely project since SAP's potential for HP in the current economic downturn contributes significantly to the overall efforts at controlling and minimizing operating costs.
Interestingly, HPO's experience with SAP optimization is being leveraged outside HP as outsourced managed services. Innovations that were folded into the HP/SAP environments first at HP divisions in Europe and then elsewhere — methods for faster implementation and ROI, minimizing operating costs, enabling better allocation of IT resources, for example — provide the basis for HP Management Services for applications within the SAPMarkets portfolio.
Think of innovation and technology as ingredients of a successfully operating business. However, recognize that both have to be added and mixed carefully into the corporation in order for the investments to demonstrate a clear return. The logic supports HP's creation — and reaffirmation in years following — of HPO. The Operations team formalizes the processes of questioning, ensures there is forward thinking on the use of potentially innovating technologies, and provides a plan for the importing, testing, and transitioning technology into the company.

About the Author
Jane is a manager with HP Operations

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