Hewlett-Packard Co. (NYSE: HPQ) has had another blow dealt to its reputation. A report from the Associated Press reveals that a contract to modernize computer systems at the Vermont Department of Motor Vehicles has been canceled after more than $18.5 million dollars and six years of work toward the modernization effort.
The project, which began in 2006, has come to an end with both sides agreeing that HP will return $8.37 million to Vermont, and that the state will return to HP all "physical and virtual rights to all software and documents created by HP," top aides to Governor Peter Shumlin told AP.
Interestingly, Robert Ide, DMV commissioner, and Jeb Spaulding, the state secretary of administration, said the biggest loss to taxpayers will likely be:
…the nearly $5 million in state staff time DMV employees have put into trying to implement system changes that now are deemed to have failed. Other unreimbursed state expenses include money Vermont spent for "change management consulting" and other services.
Ide is also reported to have said he's not looking for a new vendor anytime soon. HP did not comment on the matter, the AP report notes.
I've cited this story, because evidently at some time during this project's implementation, there was a breakdown in communication between HP and its customer. In the eyes of the Vermont DMV, HP could not meet its IT goals and objectives. I'm hoping that in the future we don't see more of this, but looking ahead, all OEMs and IT consultants are going to have to work hard to deliver what their customers want -- and in the new era of big-data, cloud computing, mobile technology, social media, and advanced data analytics, meeting the needs of customers is going to become more challenging in the years ahead.
A recent report from IDC gives us a glimpse of the complexities that companies like IBM, Dell, Apple, HP, and Cisco face as they sell hardware and software to corporate customers. The report, which gives 10 predictions for CIOs in 2013, relied on interviews with CIOs in Western Europe and the US and outlined several key findings. These are:
- 58% of new IT investments in 2013 will involve direct participation by line-of-business executives, growing to 80% in 3 years. The expanded role of line of business executives in technology decisions is a result of the advent of cloud, social and mobile technologies.
- In 2013, 33% of all new applications will target a mobile form factor. IDC also predicts that the increased number of mobile applications, the need to integrate them with enterprise systems and the requirement for multi-platform development will drive the creation of many new mobile apps by IT services providers in 2013.
- 70% of CIOs will embrace a "cloud first" strategy in 2016. Today, only 23% of enterprises have a "cloud first" strategy on all new IT purchases.
- Big data and analytics projects will be like no other IT project and CIO's will be involved in implementing technology with more experimenting and less predictive outcomes. Also, there will be a shortage of talent available to work on project.
- By 2018, 50% of business executives will view their CIO primarily as a partner for business innovation and improvement, while 30% will still view the CIO primarily as the overseer of IT costs, risks and services. While CIOs may need to play all three roles, the key is business perception. This has broad implications for the CIO Agenda.
With more IT to install, new computing models such as cloud computing to consider, greater involvement of line-of-business executives in IT purchasing decisions, as well as CIOs moving toward innovation and a shortage of IT skills to install, maintain, and manage IT projects, Meredith Whalen, IDC's senior vice president, said during a webcast this week, OEMs have their work cut out for them.
According to Whalen, OEMs shouldn't "be talking about the technology for technology's sake." Instead, OEMs must impress upon their clients the importance of using their technology to make the business case and should ask a series of questions that will improve corporate clients' understanding of how the technology will help them achieve their strategic goals.
Among the questions that need to be answered, Whalen said, are:
- What is the impact that [the technology] will have on their business?
- What type of return on investment will they see?
- What are their peers doing?
- How are their peers accomplishing key performance indicators?
These are the questions HP should have asked officials at the Vermont DMV.