In recent years, IT has undergone a profound transformation in which what was once a support-oriented organization has taken on a much more important customer-centric role. Much of this has happened thanks to the power of data to drive decisions and the impact of digital transformation enabling companies to create new service and data-based offerings around their core products.
Having recently heard that Art Hu’s CIO role at Lenovo has been significantly expanded to include customer solutions, I was keen to speak to him and learn more about how he made this move to “CIO-plus”, customer-centric IT -Leadership position, is addressed . Our conversation covered how this new opportunity evolved, how data is central to CIOs today, and how his new CTO responsibilities differ from his CIO role. What follows is an edited version of our interview.
Martha Heller: In addition to Lenovo CIO, you became CTO of the Lenovo Solutions and Services Group last April. What is this new business?
Kind Hu: Over the past year, Lenovo built our Solutions and Services Group (SSG) as part of our shift from hardware sales to solutions, including offering our products as a service. Device-as-a-Service (DaaS), for example, is our fastest growing business. It allows customers to avoid large hardware investments and move to a “consume as you go” model, where we manage, configure and provision their devices for them.
Think of SSG as a high-growth startup. Last year, Lenovo generated more than $70 billion in revenue, of which SSG contributed just over $5 billion. Our goal is to double our sales in the next few years.
What does SSG’s rapid growth say about the evolving world of business and technology?
The first point is the shift from delivery to results. It’s no longer our goal to just make and ship a piece of hardware. Our goal is to create value through business results. But you can only shift to a customer-centric mindset when you are close to the customer and understand the context in which your technology is being used.
An example is Lenovo’s AIOps service, where we analyze a customer’s data through the hybrid cloud service and make recommendations for optimization for stability and performance. SSG’s rapid growth shows that today you need more than the right technology: the technology must make your data visible, accessible and actionable.
What lessons can you offer CIOs in generating actionable data?
The first lesson is to create clear data standards. We’ve learned that some data needs to be consistent (e.g. the definition of a “shipment”), but we’ve also learned that we can’t standardize everything. We need to allow some variation in how people work, even within a global model.
The second is to start building guard rails around the data. When we told our business partners what they could and couldn’t do with the data, they just went ahead and did it anyway. We realized that we had to find the right balance between standards, guidelines and flexibility. It took us a few iterations to get it right.
The third lesson is all about education. You cannot assume that your business partners know what to do with the data. Early adopters know exactly what they want, others may not. For example, we’ve significantly improved our ability to collect feedback on social media, and we’ve started sending customer comments back to our product development teams from Twitter and LinkedIn. We assumed these teams would love all of this data, but we were wrong. Someone actually said, “Please stop sending me all this data. I don’t know what to do with it.” We have learned that providing data is not enough. We need to help our business partners understand it and then use it to capitalize on these market insights.
What does SGG’s CTO role entail?
The first part of my job is to select the technology investments that enhance our customer offerings. Where can RPA (Robotic Process Automation) complement our solution portfolio? How will AR and VR expand our possibilities? The second is to expand the solution portfolio to give our customers more choices. And third, we want to use SSG as a platform for innovations that drive the future of our solutions and services strategy.
How is this job different from your CIO role?
In both roles, I continuously scan the technology landscape to identify opportunities and build a strong engineering team and culture to deliver results. But there are also differences.
For example, my level of external engagement. A CIO’s stakeholders are typically the business users within the organization. As Lenovo’s CIO, I build our core business applications, social media and e-commerce websites and spend time thinking about business cases, deployment and opportunities to add value. As CTO, I spend more time in the market to understand new trends and the competitive landscape. These give me a strong perspective on customer insights, which are then sharpened in discussions with our managing directors and sales teams. The result is a more informed offer development process.
My view of budgets and investments is also different. As a CIO, you typically have a budget that you use to prioritize investments and initiatives. But as a CTO, if I can’t articulate a clear value proposition for my technology investment roadmap in a new P&L, my development budget is zero. The conversation shifts from “Your budget needs to be cut by 10% to meet some but not all of your priorities” to “Your budget is zero because we don’t believe your technology strategy will increase our P&L.” (Fortunately, that hasn’t happened yet.)
Finally, there is the difference between working in a startup and working on a global scale. As Lenovo’s CIO, I lead the teams that support a multi-billion dollar business. The SSG CTO role, on the other hand, required me to look into starting a business. Leading a $70B deal is very different than supporting a new business unit in its “From Zero to One” maturity stage.
How did you end up in the role?
I was asked to play both roles for a number of reasons. The first is that industry trends have for years indicated that the future would be increasingly software defined, so we have been building our software expertise within IT for quite some time.
At the same time, SSG’s approach in developing our offerings has been to take the best Lenovo benefits from across the organization and incorporate them into a single offering, with the software being part of the “glue” that holds them together. The requirements to conduct this type of exercise naturally matched the software skills of IT, specifically the technical methodologies, processes and platforms required to build SSG’s R&D platform.
Second is our “Lenovo powers Lenovo” concept. Over the years, our customers have asked how we run our business at Lenovo: supply chain planning, warehousing, and globalization are good examples. They also wanted to know more about the hybrid cloud solution that we developed in-house. They said, ‘Can’t we just buy what you do?’ So we took some of the solutions we had developed in-house to run Lenovo, produced them and started offering them to our customers. Although I didn’t know it at the time, I was in the process of starting a small IT company and that was one of the seeds that ultimately led to me taking on the CTO role.
What is your advice to CIOs who want to take on a CTO position?
Do not wait. If you develop software solutions in-house that could be valuable to your customers, think about those solutions at the beginning of a business. As a CIO, you are perfectly positioned to do this, since so many components of a software-supported solutions business are already in your area of responsibility. My advice to CIOs looking to do more would be to look at the assets they already have.