Rescuing a firm’s reputation

Beset by financial scandals and accusations of poor business practices, Computer Associates has set about cleaning up its act. CIO Kevin Kern is helping the firm get its house in order

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By  Peter Branton Published  November 13, 2005

|~|Kern1body.jpg|~|Senior vice president and CIO Kevin Kern is helping CEO John Swainson to build a solid foundation for growth within CA, as the firm steps up efforts to banish its bad reputation.|~|Few companies have had to endure quite so much public scrutiny as Computer Associates (CA) has in the past couple of years. The software giant has faced financial scandal and public castigation for poor business practices. In an effort to draw a line under past issues, CA has made a number of changes to its management team. Last year it hired an outsider, John Swainson, formerly with IBM, as its president and CEO. Since formally taking the reins in February this year, Swainson has reorganised the company’s business units, overhauled its product line-up and made a number of other changes within the organisation. One of the other senior appointments made last year was industry veteran Kevin Kern, who joined CA in July last year as senior vice president and chief information officer (CIO). Kern comes with a strong pedigree, having previously been worldwide vice president of managed services for HP. During a recent visit to the Middle East, he took time out to talk to IT Weekly about his role within CA, how the firm develops its products, and what it is doing to put the past behind it and move forward. What is the purpose of your visit to Dubai? I’ll be spending some time with our key customers over the next few days. I’ll talk about my view of what’s happening in the IT environment at large, from my perspective as the CIO of a large organisation, from a practitioner perspective as to how to navigate and incorporate all the complications that we have and how we build this foundation for growth. My job for John Swainson at CA is to help build that solid foundation for growth. What does that mean? Well, that’s the processes and IT that we can then build the company upon. The trick, in my opinion, is to make sure that you are continuing to put the pieces in the puzzle together and to make sure that you keep building that solid foundation for growth, both the infrastructure and business applications, as well as around data and the data lifecycle. At the same time you must deliver value to the company and the enterprise. I have the same challenges that most other global companies and companies in the region have to struggle with: how do you keep your costs down? How do you build that platform? What are the investment decisions that you need to make? That’s very critical because often, especially in today’s world, it’s easy to look for a silver bullet and quick fixes, but it doesn’t work. They may not be properly integrated. In some cases they can often cause more pain and problems than they solve down the road, so you can’t migrate, you can’t work effectively, you can’t manage your infrastructure. CA software manages the on-demand environment. HP and IBM have hardware for the ondemand environment, we manage that on-demand environment and we secure that. One has to understand the complexities of technology that adapt as your industry and business grow. My background is I’ve done a couple of tours of duty internationally as a CIO, so I understand the perspective of managers outside the US: how to deploy technology solutions around the world, how to measure it, which is key, and what the right measurement to extract value from IT is. I have to do that for my boss, John [Swainson], the CEO, and the CFO and the board of directors; the same as anybody else does. I have to show where I put my investment, or CA’s investment on internal IT. That’s the same scenario that I would discuss with customers. What I do also is that I, with John, formally sign off on all software products that CA delivers before it goes out the building. That’s something new that we have formalised, the process that we have put in place. In that process I help with all the beta testing and the formal sign-offs to improve the quality of the products by identifying areas for improvement. The key point is that we are working with our services arm so we can document the proc- esses and the best practices, the methodology and roadmaps that we are using internally, so we can share that with customers. That’s a big responsibility; 30% of my time is spent dealing with customers. Many aspects are involved, many different areas of optimisation, clients, security, and so on. They [CA customers] clearly want to understand, because I’m CA’s biggest customer, internally. So, would you say that you are involved in quality control for CA products? I’m not quality control, but we are deeply engaged in our overall sign-off process. Is that something that the IT arm was not involved with before? Not formally, and also I would say that is where we are heading with our software and solutions moving forward. Now, more than ever, it is important to show how you implement an integrated solution. What is the methodology? What are the on-ramps and accelerators to help customers get started? What are the road-maps? I am here to provide my roadmap, how we did it. CA, of course, has acquired a lot of technologies over the years, including recent deals such as your acquisition of Concord. How involved are you in the integration of the product sets? The answer is very involved. I get involved in the front end of the M&A (mergers and acquisitions) activity. We invest about US$630million a year in R&D to help improve the products internally and consistently we have had about US$1.3 billion to invest in other companies. ||**|||~|Kern2body.jpg|~|Many CIOs of firms who have not worked with CA for a number of years are now giving us a chance, says Kern. |~|So, you are involved in the M&A process? I am involved in M&A, also the process of where we integrate that efficiently into our product sets. R&D’s responsibility is to do the work officially on actually integrating products into our solution sets. My team will be involved in beta testing that activity, helping to decide where the value of that is. After R&D does the integration work, we use the company’s products and solutions sets. Would you describe CA as ‘an eat your own dog-food company’? One that uses its own products? Absolutely. We use Concord, we use eHealth [technology acquired from Concord] and Spectrum, we use Netegrity technology. Would you ever envisage a scenario then where your team would actually recommend a company or a product for acquisition? We do provide input to our M&A team. We have done that with a number of acquisitions: Spectrum, eHealth, Clarity. While your merger and acquisition levels have not been as high as they were a few years ago, you have still been adding quite a lot of organisations. How large a part of your work is devoted to actually getting these new guys working with you? Well, it’s significant enough in my operating role that I have a person — actually the CIO of Netegrity — reporting to me on our merger activities. It is significant enough that he then works with the rest of my team to make sure that from day one we can start provisioning for employees, that we start folding in applications into our world, infrastructure, and so on. We will be able to realise significant cost savings on all our acquisitions. More importantly, we will be able to deliver that platform for growth. Part of the job that I have is to help showcase the solutions in CA’s portfolio. Do you have influence on what product lines get retained in these acquisitions and what get dropped? Some, but that’s not my job at CA. I provide input into that but, more importantly, I’m involved in showcasing the solutions. I work with R&D very closely, not only on the products that we develop but also the acquisitions. So not only do we eat our own dog-food or drink our own champagne or whatever, we provide that showcase of best practice of using the products. CA went through a major reorganisation a few months ago. How successful has that been and what benefits has it brought, both to the organisation and to your customers? John said it would benefit our customers by driving focus in key areas so that we would have more focused activities; make it tighter in respect of deliverables and quality, make it possible to work more closely with the customers. You’ve also trimmed down your product line considerably in recent months, shifting a lot of products into maintenance mode. What was the rationale behind this? Well, it makes sense for us to do so. It makes sense to help clarify to our customers where we’re heading and where we’re going to be investing in for the future. It makes sense to look at where we can add value to our customers. What will happen to those customers who will see products dropped? We’re not going to stop supporting any product line. We are not going to differentiate between our products. Every product that we are selling is still going to be regarded as mission-critical. What we are saying is that we may not invest as much in some products to keep them maintained in future. Going forward, are we going to see more reorganisation? I believe so. I have been there about 15 months and clearly John is very solid. We feel that we have the right team in place, the team now has to gell together and John’s job is to make sure that we all work together. You do have a mostly new team in place. There are various reasons for that, including the ongoing legal issues involving the company. How are you guys addressing the problems that arose from before? First, the criminal charges are separate to CA. The prosecution involves certain individuals. The company, going forward, we feel is quite interesting. We feel that some of the pressures and shackles and limitations of how we grow again as a company are behind us. Clearly the team is mostly new. We do have a lot of new players in, but the team that we have in place now is a good team, it’s a very strong team. We’re very focused on taking the company from where it is today to where we want to take it in the future. We are looking at how we can grow the company today, that is a large part of my job and it is very exciting. The possibilities are not to look at the problems of the past, we are looking at where we need to invest and where we can grow the company. While the criminal charges and the accounting issues are very serious, other issues are perhaps more serious to your customers. What about the objectionable business practices that CA was extremely well known for, the bad reputation that CA had with customers? How are you going to address those issues? What I would say is that CA’s management certainly understands and respects the issues. I’ve been here 15 months. For 26-and-a-half years of my life, some of those have been involved with CA in different roles. I can attest to what you are saying. Some of the practices that you refer to, some of my friends and colleagues that are CIOs in various parts of the world have experienced difficulties with respect to dealing with CA, with contracts, whether it is in regard to inflexibility of pricing. The good news is, quite frankly, that for the last number of years that we have had difficulties, some of our key customers have stood by us. We tried very hard to continue to deliver and meet their expectations on services as well as solutions that we are deploying. We want to do a better job; we hold forums to discuss with customers, as part of all of our day jobs, what we can do to try to help our customers get more value. My opinion, quite frankly, is that we’ve got better. Many CIOs, some are friends of mine that have not engaged with CA for a number of years, are now giving us a chance. That’s what we’re asking for. Give us a second chance to talk more about how we can provide value to your company, how we can help provide solutions to benefit your business, and how we can help provide expertise to your organisations. Most, if not all, our customers are willing to give us a second chance; the customers that have stood by us want to see us doing better. We clearly want to show that commitment. My role as a CIO, when I stand outside a company as a supplier, I want to see that the company that I am doing business with is going to be around for the long term, that it is solid. More importantly, I want to see that it is committed to me personally as a customer. I would say judge us by our actions going forward.||**||

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