MARCH 31, 2002
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The Online Best Employers Package
Didn't get enough in print of the BT-Hewitt Best Employers in India survey? No problem. We've put together an exclusive online package that takes you deep inside the top 10 companies. The reports look at everything—people practices, compensation strategies, leadership styles-that makes these companies great places to work in.

Stanley Fischer Unplugged
He has the rare distinction of having advised through the half-a-dozen economic crises of the 90s. But now economist Stanley Fischer is calling it quits at the International Monetary Fund, and joining Citicorp as Vice Chairman. In India recently, Fischer spoke on IMF, India, and the global recession.
More Net Specials
"Technology Should Become Less Visible''
Fortune magazine once referred to her as one of Carly's angels. In India to launch a 'bridging the digital divide'-initiative with the Andhra Pradesh Government, Hewlett-Packard's Vice President (Strategy and Corporate Operations) Debra Dunn spoke to Business Today's in Hyderabad about her company's efforts to reach out to four billion customers (that's the e-inclusion thing), and, of course, the proposed merger with Compaq, which could go down to the line. Excerpts:

Q. Debra, you've been with H-P for 19 years. What do you think went wrong with the company, and how will the merger with Compaq set things right?

A. I think that as the internet became a critical and prominent feature of the information technology environment, H-P lost its leadership position. One reason for this was our decentralised approach that didn't help us drive an integrated strategy. H-P invented critical aspects of the internet, but never got the credit for doing so because different part of the organisations continued to do different things and we were not able to align the organisation around a clear and compelling leadership position.

How will the Compaq merger help?

In a variety of ways. Competitive dynamics are intensifying in some of the areas we plan to be in. Access devices is one of those; it is a market where scale and cost are critical components of being a leader, even a player.

Compaq has a lot of technology and IP assets in markets like high-end servers. These are complementary to the H-P assets and allow us to accelerate our strategy.

H-P has historically been known as a company that creates wonderful products, but (as one that) hasn't been very successful at marketing them. We have been working hard on this and have made some progress, but the marketing skills of Compaq are very complementary to that of H-P's.

"The process of H-P's reinvention is a long-term effort. The merger becomes another phase in the reinvention of the company

What about the overlaps? Won't they blunt the competitive edge of the merged entity?

There is some overlap, but the relative strengths and weaknesses actually line up pretty well. We are very strong in unix; Compaq, in nt. We are strong in some aspects of storage; they are strong in other aspects.

So, while there are overlaps broadly, when we get to specifics, it is a very complementary lineup. Fact is, we have looked at a lot of studies of mergers-which ones worked, and which ones didn't. The studies suggest that when you acquire or merge with organisations in spaces very similar to yours, you bring with you the knowledge and ability to really make the merger or acquisition successful.

You were in charge of H-P's reinvention effort. What does the company have to show for it thus far?

As Carly said during her visit to India, it is really a long-term effort. The merger becomes another phase in the reinvention of the company. But I think we made tremendous progress in a couple of key areas. One big focus was on increasing the ease of doing business with the company for the customer.

Partly because of that we changed our organisational design. We went from having 83 independent businesses to having 18 business categories selling in an integrated way through a couple of front-end organisations. That was a huge change. Another big focus of reinvention was getting leverage on what we call infrastructural activities, which are around speed, efficiency, and cost savings.

What exactly is this e-inclusion thing?

The initiative is based on the belief that, going forward, the big opportunities for H-P will be partly in developing markets. If you look at growth rates, these markets are growing faster from an IT investment perspective.

Equally important is that H-P takes its role as a member of the communities it is a part of, seriously. We are a global company and issues such as the growing disparities in incomes, and anti-globalisation affect us. We feel we need to be proactive in trying to use the tools of it to bring meaningful solutions that help bridge those gaps.

This initiative isn't really about philanthropy; it's about trying to bring viable, sustainable solutions that not only address the problems of the communities we are talking about, but also create ongoing business opportunities for H-P.

How will it do that?

I think it will help us in terms of significant contribution to revenue growth, and the income growth associated with that. (It will also help us in terms of) pushing our inventions along the dimensions of ease of use and affordability-critical for all markets. So, we believe there is profitable revenue available in these markets waiting around the corner for H-P.

Carly Fiorina has said that through this, she wants H-P to target the four billion people who don't use technology. Is there a difference between the way these people perceive technology and the way the one billion who use it do?

I think some percentage of the people who currently use technology on a regular basis are knowledgeable about the technology itself. And interested in it. I think as you expand the user base further-and this isn't just true of developing countries-you start reaching more people who don't care about the technology. They aren't interested in it; they don't want to know anything about it; they just want solutions that make their lives better.

So, it is important that the technology becomes less visible, less onerous, less cumbersome. The solutions become visible and prominent to the user, and I think this is one reason why inventions targeting these markets can be used in all our markets.

But e-inclusion is a long-term effort...

We don't expect to recover all our investments in the first year. Think of it as a launchpad for a longer term business strategy.

If the merger goes through, you are to be redesignated Senior Vice President (e-inclusion). We take that to mean that e-inclusion will continue to be a growth-driver if the merger goes through. Do you see H-P and Compaq leveraging the merger to produce low-cost hardware targeting the four billion?

I think it will be very critical for us to lead in moving information access down the economic pyramid. We (the merged entity) will be such a major player that maintaining our leadership will really be predicated on continuing to push the frontier of availability of these solutions to more and more people. So, driving down the cost curve will be one component.

But we don't want to make the assumption that lower cost PCs may be the right things to focus on. It may be a completely different device at the end of the day that is appropriate to the markets we are looking at. Access devices will be one key component, and H-P certainly wants to be there.

You're here to sign an alliance with the Andhra Pradesh government for an i-community project at Kuppam. We're told the initiative will, apart from providing e-government services, also provide access to local schools, colleges, hospitals, and facilitate distance learning, and health and agricultural services. What will H-P's contribution be?

The Andhra government will play a key role in ensuring that basic infrastructure is in place to enable some of the solutions we are talking about. H-P will be engaged with the community and will bring in more partners. Our approach will be interactive: we'll put some solutions in place, let people work with them, and evolve the solutions to make them truly meaningful.

At the end of the day, if the solutions do not add value to the community they won't be sustainable, they won't be replicable, and they won't allow us to develop the long-term business we are talking about.

Are you looking at similar projects in other states in India?

Not yet. This effort isn't one where we have totally spelled out our business plan. It is a project that we refer to as a launch and learn effort. We believe there is a need and a business opportunity. We are launching (these) projects to further develop and refine a strategy that will then be applied.

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