Computer Associates 2006 Annual Report Download - page 20

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the organization. Finally, we began the hard part —
making sure that everyone in the company takes
these values and principles to heart. The fi rst and
most important way to communicate our commit-
ment is for the management team to demonstrate
that we will live by our values as we work to build
a true culture of accountability. So, when we missed
our earnings plan for the year, management bonuses
were signifi cantly reduced.
In addition, after the close of Fiscal 2006, we made
some signifi cant management changes designed to
ensure that we have the right team in place to com-
plete CA’s transformation. In Fiscal 2007, execution
will be critical. I believe that we are assembling a team
of leaders willing to be accountable for producing the
results we expect and our shareholders deserve.
Taking the Next Step Forward
So I look back on FY2006 as a year of substantial
progress. We had some remarkable successes, along
with a few inevitable surprises and disappointments.
We come away armed with valuable lessons and
great confi dence in our future.
As I have often stated, transforming CA and realizing
the full potential of our opportunities is a multi-year
process. Some things are already working much bet-
ter, and the successful implementation of our SAP
system will clearly help us. Other things will take lon-
ger, including building a performance culture, but we
are committed to creating an organization that will
enable CA to accelerate growth and serve its cus-
tomers better than ever before.
I fi rmly believe we are on the right path to making it
happen. We are focused on the fastest growing areas
of the enterprise software market. We have out-
standing solutions and terrifi c people. Our customers
tell us that we understand their challenges and have
the technology to help them to succeed. In short, CA
has never been in a better position to compete — and
to win.
John A. Swainson
President and CEO
>
A fi fth priority is to create an infrastructure
within CA to support the growth we antici-
pate in the future.
Over the past fi ve years, CA invested little in its inter-
nal IT systems and as a result, these systems did not
support the needs of the business.
With so many labor-intensive business processes,
our overall productivity is curtailed — across the
business. Further, it is clear to us that some of our
business processes are unable to handle the demands
of the business. Our sales commission system is a
case in point, and has resulted in a substantial cost
overrun for the company in the fourth quarter. Fixing
this material weakness in our business systems is our
management team’s key priority.
We’ve made some signifi cant progress. One of the
company’s first transformation initiatives was to
largely replace our IT systems, and implement a
modern ERP application environment based on SAP’s
software, the fi rst phase of which went successfully
live on April 24, 2006. This phase provides Human
Resources worldwide; and Financial, Purchasing, and
Sales support for our North American operations.
We will bring the rest of the company on line over the
next two years. This project will give CA the business
process infrastructure we need to scale our business
over the next few years, without additional general
and administrative expense. It will also provide a
more consistent source of data to run our business.
Our goal in this initiative is simple: to give CA the
lowest cost, most fl exible business infrastructure
of any company in our industry, one that allows our
people to do what they do best: build great products,
sell them and support our customers.
> The last, and most profound of our priorities
is to rebuild the culture of the company.
Of all of our initiatives, this is likely to be the longest
and most challenging to implement, in part because
it had been ignored for so long. Simply put, I believe
that to be successful in building the world’s lead-
ing management software company, we must have
a performance-based culture based on integrity,
accountability, teamwork and innovation.
We started this process by articulating CA’s mission,
vision and values and codifying them in the CA Char-
ter, which we’ve shared with every employee. Then
we created a Code of Ethics, based on the charter,
and ensured that we communicated it throughout
4