HP 2008 Annual Report Download - page 3
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world-class, globally scaled services capability to
HP’s established leadership in hardware and
management software. This is a powerful
combination that puts HP in a distinct position to
lead the industry and deliver for our customers and
stockholders.
Solid Progress on our Core Initiatives—A Milestone
in the IT Transformation
Even as we have undertaken the integration of EDS,
multiple transformations of corporate functions,
business groups and business processes are
underway across HP. In fiscal 2008, we made good
progress, removing more than twice the costs from
corporate shared services than we did in fiscal 2007.
Perhaps no single initiative has been as important as
our information technology transformation. Begun in
2005, phase one of this effort—the complete rebuild
of HP’s IT infrastructure and processes—achieved
substantial completion by the end of 2008.
The transformation of HP’s IT reduces costs, provides
more reliable information, establishes a simplified
and dependable IT infrastructure, improves business
continuity and supports the company’s growth. We
also expect to flip the ratio of our IT spend from 75
percent on maintenance and 25 percent on
innovation to 75 percent on innovation and 25
percent on maintenance. This was all done primarily
with HP hardware, software and services, and the
capabilities of our closest partners.
The benefits of the IT transformation are expected to
include:
• Consolidation of more than 85 internal data
centers to six next-generation data centers
• Consolidation of 6,000 applications to 1,500
standardized applications
• Reduction of annual energy consumption in data
centers by 60 percent
• Increase in processing power of 250 percent
For all that we have accomplished in creating a
more efficient company, there is still a great deal of
work left to do and several more years of cost cutting
for HP to reach the benchmarks we have set. We
expect to reduce our cost structure in fiscal 2009 by
more than $1 billion in constant currency over fiscal
2008 levels through previously announced initiatives
in our corporate functions and the EDS business.
Additionally, we have significant cost savings to
realize within our segments to improve their
competitiveness. Our goal: to have the best
operations of any company in the world.