Optimising business processes

The press release announcing Kosla’s appointment in 2023 said HPE believed his prior experiences in the digital front-end and running complex supply chains made him the perfect person to build on its digital transformation efforts. So, how has that vision panned out?

“What’s been interesting is helping the business and IT team think about the end-to-end value stream,” he says. “There was a lot of application-specific knowledge. The ability for processes to be optimised at an application layer versus the end-to-end value stream was only happening in certain spots.”

Kosla discovered the organisation had spent two years moving to a private cloud installation on the company’s hardware and had consolidated 20-plus ERP systems under one SAP instance. With much of the transformation work complete, his focus turned to making the most of these assets.

“The opportunity was not to shepherd up transformation, it was taking the next step, which was optimising,” says Kosla, explaining how he had boosted supply chain performance in his earlier roles. He’s now applying that knowledge at HPE.

“What we’ve been doing is slicing areas of opportunity,” he says. “With the lead-to-quote process, for example, we have opportunities to optimise, depending on the type of business, such as the channel and distributors. We’re asking things like, ‘Can we get a quote out as quickly as possible, can we price it correctly, and can we rely less on human engagement?’”

HPE announced a cost-reduction programme in March to reduce structural operating costs. The programme is expected to be implemented through fiscal year 2026 and deliver gross savings of approximately $350m by fiscal year 2027, including through workforce reductions. The programme of work in IT will help the company move towards these targets.

Kosla says optimisation in financials might mean closing books faster. In the supply chain, the optimisation might be about predicting the raw materials needed to create products. He takes a term from his time in the consumer-packaged goods sector – right to play, right to win – to explain how his approach helps the business look for value-generating opportunities.

“So, do we have the right to play, meaning do we have the skills? Where do we have the right to win, meaning do we have the funding, business resources and availability to deliver the results? We spend time focusing on which areas offer the right to play and the right to win.”

Embracing emerging technologies

Kosla says data and AI play a key role in these optimisations. HPE uses third-party applications with built-in AI capabilities and has developed an internal chat solution called ChatHPE, a generative AI hub used for internal processes.

“There are lots of conversations around how we unlock the benefits of AI in the company,” he says. Professionals across the company use Microsoft Copilot in their day-to-day roles to boost productivity. Developers, meanwhile, use GitHub Copilot.

Finally, there’s ChatHPE, which Kosla says is used according to the functional use case. HPE started developing the platform about 18 months ago. A pipeline of use cases has now been developed, including helping legal teams to review contracts, boosting customer service in operations, re-using campaign elements in marketing and improving analytics in finance.

“We spend time focusing on which areas offer the right to play and the right to win”

Rom Kosla, Hewlett Packard Enterprise

“We have a significant amount of governance internally,” says Kosla, referring to ChatHPE, which is powered by Azure and OpenAI technology. “When I started, there wasn’t an internal HPE AI engine. We had to tell the teams not to use the standard tools because any data that you feed into them is ultimately extracted. So, we had to create our platform.”

Embracing AI isn’t Kosla’s only concern. Stabilisation is a big part of what he needs to achieve during the next 12 months. He returns to HPE’s two major transformation initiatives – the shift to private cloud and the consolidation of ERP platforms – suggesting that the dual roll-out and management of these initiatives created a significant number of incidents.

“When I look back at PepsiCo, we had about 300,000 employees and about 600,000 tickets, which means two tickets per person per year. I said to the executive committee at HPE, ‘We have 60,000 employees, and we have a couple of million tickets’, which is an insane number. The goal was to bring that number down by about 85%,” he says.

“Now, our system uptime is 99% across our quoting and financial systems. That availability allows our business to do more than focus on internal IT. They can focus on the customer. Stabilisation means the business isn’t constantly thinking about IT systems, because it’s a challenge to execute every day when systems are going down because of issues.”

Creating value

Kosla says the long-term aim from an IT perspective is to align the technology organisation with business outcomes. In financials, for example, he wants to produce the data analytics the business needs across the supply chain and operational processes.

“We have embedded teams that work together to look at how we enable data, like our chat capabilities, into some of the activities,” he says. “They’ll consider how we reduce friction, especially the manual steps. They’ll also consider planning, from raw materials to the manufacturing and delivery of products. That work involves partnering with the business.”

The key to success for the IT team is to help the business unlock value quicker. “I would say that’s the biggest part for us,” says Kosla. “We don’t even like to use the word speed – we say velocity, because velocity equals direction, and that’s crucial for us. I think the business is happy with what we’ve been able to achieve, but it’s still not fast enough.”

Being able to deliver results at pace will rely on new levels of flexibility. Rather than being wedded to a 12-month plan that maps out a series of deliverables, Kosla wants his team to work more in the moment. Prior experiences from the consumer sector give him a good sense of what excellence looks like in this area.

“You don’t need to go back to the top, go through an annual planning review, go back down, and then have the teams twiddling their thumbs while they wait for the OK,” he says.

“The goal is that teams are constantly working on what’s achievable during a sprint window. Many companies take that approach; I’ve done it in my prior working life. I know what can happen, and I think flexibility will drive value creation.”

Kosla says some of the value will come from HPE’s in-house developed technologies. “One of the things that makes this role fun is that there’s a significant amount of innovation the company is doing,” he says, pointing to important technologies, such as Morpheus VM Essentials virtualisation software, the observability platform OpsRamp, and Aruba Networking Access Points.

“What I’m proud of is that we now show up to customers with comparability,” he says, talking about the advisory part of his role. “We can say, ‘Look, we use both products, because in some cases, it’s a migration over time.’ So, for example, when a customer asks about our observability approach, we can compare our technology with other providers.”

Blurring the lines

Kosla reflects on his career and ponders the future of the CIO role, suggesting responsibilities will vary considerably according to sector. “Digital leaders still maintain IT systems in some industries,” he says.

“However, the rest of the business is now much more aware of technology. The blurring of lines between business and IT means it’s tougher to differentiate between the two areas. I think we’ll see more convergence.”

Kosla says a growing desire to contain costs often creates a close relationship between IT and finance leaders. Once again, he expects further developments in that partnership. He also anticipates that cyber will remain at the forefront of digital leaders’ priority lists.

More generally, he believes all IT professionals are becoming more focused on business priorities. “I think the blurring will continue to create interesting results, especially in technology companies,” he says. “We want to do things differently.”