HP restructuring around customers

By RICHARD PAMATATAU


Computing giant Hewlett-Packard has restructured its New Zealand operation to wrest more business from the Government and corporates as it tries to shrug off the perception it is a printer and PC seller.

HP's new managing director for New Zealand is Keith Watson. His brief from head office is clear - the company has to become more "customer facing", grow market share and boost profit.

HP generated revenue for its last financial year of around $550 million, with a profit of just $3 million.

Its revenue-profit ratio is lacklustre compared with its competitors, but Watson said restructuring to improve HP's game over the long-term was the plan.

Profitability would not be the only and most immediate measure of success.

With 600 staff, and selling everything from digital cameras and handheld computers to high-end servers and IT services, HP now has to make the offers more compelling to customers and also integrate more services into its offerings, said Watson.

As the memory of Russell Hewitt, HP's ebullient former boss, fades, the company has restructured its management, which includes four new senior recruitments.

Jillian Dimock will be based in Wellington and go after public sector business; Jeff Healey is the new enterprise and corporate marketing manager; Mike Hill takes on national account manager responsibility for big enterprise accounts and Melissa Donaghey is the new human relations manager.

In strengthening its Wellington presence, Watson said HP must engage better with Government departments.

Traditionally HP was not seen as a player in the Government market and this move put it up against competitors such as EDS, Datacom, IBM and Computerland.

Watson said there would also be a push for higher level integration and consulting business. That may mean more activity at HP's application development centre in Christchurch, one of five the company has around the world.

HP has 140 staff working in development and the capacity to expand staff numbers there to 250.

"Great work is being done in Christchurch, not only for New Zealand customers but others around the world," said Watson.

"The pressure on margins faced by IT companies applies not only to hardware but increasingly to software and services as well."

In the IT services field, HP bid for Fonterra's huge IT outsourcing deal, worth $590 million, but missed out to EDS.

A win for HP would have greatly boosted its services division, but analyst groups such as IDC Research say HP has been chipping away in less visible sectors on smaller deals.

Telecom's move to buy services company Gen-i put extra pressure on systems integration players, he said.

Consumer business was also being boosted with attention to print and imaging.

He wanted that section of the business to look at more printing systems business where the printer was a key part of sets of network services.