It’s Hard To Simplify– But It Pays

As time passes, it’s more natural that things get complex–such as the IT infrastructure of companies. At HP, for example, mergers, acquisitions and growth over the years had resulted in a global spare parts supply chain–which provides spare parts for HP commercial and enterprise products repair service—that consisted of 300 applications across 79 countries.

This was a problem–a problem common among enterprises, says Ron Griffin, senior vice president, global IT at HP. “Large companies often don’t get rid of legacy systems when they introduce new systems,” he observes. “They tend to pile IT layers on top of each other.” Companies often underestimate how much they could save if they were to shut down the legacy systems and really dare to make a new beginning, Griffin points out.

HP took the dare. The company began a project to simplify its 300 supply-chain related applications. But as of 2006, there had been little actual progress. Then the project was transformed. Within three years, the job was complete and the ratio of spend to revenue has been driven down by 19 percentage points.