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HPE CIO tackles tough 'spin merge' with CSC

Clint Boulton | Sept. 1, 2016
Separating HP’s enterprise services business from its parent company is a challenging but necessary task for Scott Spradley, who says ‘hard work is fun.’

It’s become fashionable to call CIOs chief integration officers because they integrate acquired assets, blend on-premises infrastructure and cloud technology, and collaborate with several stakeholders on digital services.

Scott Spradley, CIO of Hewlett Packard Enterprise 

Scott Spradley, CIO of Hewlett Packard Enterprise.

You can call Scott Spradley, CIO of Hewlett Packard Enterprise, a chief separation officer. Spradley is racing to complete his second major asset split within 12 months, extracting HPE's $20 billion enterprise services business in an $8.5 billion "spin merge" with Computer Sciences Corp. The technology services company will absorb HPE’s services business, acquired in a 2008 acquisition of EDS.

"There's not a lot of fat in the IT organization, but then when you do a split like we did you're taking an already lean organization and you're creating two organizations out of one," Spradley told CIO.com on the sidelines of the CIO 100 show earlier this month.

H-P in 2015 pulled off a herculean effort to separate into two distinct companies, Hewlett Packard Enterprise Co. and HP Inc., in a bid to better meet corporate computing demands in an era where most CIOs are renting software through the internet. In that split, Spradley oversaw the division of six data centers, including 50,000 servers and 2,800 applications used to support sales, supply chain and financial systems for each company.

Why the spin merge poses a great challenge

The HPE-HP split proved difficult but Spradley says his current challenge is even greater. The timeframe is tighter, with a March 31, 2017, deadline. Spradley must also execute the spin merge at 20 percent of the cost of last year's split.

Moreover, the extrication task is much more difficult because enterprise services unit, comprised of 150,000 employees, led most sales engagements, looping in HPE's infrastructure, software and financing divisions. This created a lot of commingling in the whole motion. "This is about carving out the biggest part of company from employee headcount and merging it with a whole new company that is already standing,” Spradley says.

While Spradley was intimately familiar with the people and assets involved in last year’s split, he finds himself working with an unfamiliar company in CSC.

When the deal was announced on May 24, HPE didn't know CSC's data center or data warehouse strategy, its application layer, or even its IT organizational model. It turned out that CSC uses its own managed services arm to deliver IT, which presents challenges. For example, a single system comprised of multiple technology assets could be serviced by group A, which is not part of IT, and then another part of the system could be provided by group G, which happens to observe different operational standards than group A.

 

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