The multinational IT corporation, Hewlett-Packard, has reported that it will be separating into two companies this week. One entity will be responsible for the traditional business in PC and printers, the other entity will be providing software and services to corporate consumers. Such services include: computer servers, data storage devices, networking, software and services. This separation is a result of a major change in its operations, in particular in its operations management.
HP believes that the separation into two entities will enable “greater speed and agility” in its operations. Computer industry analyst, Patrick Moorhead, considers this change as a good idea and that “the benefits of moving at the right speed outweigh the cost savings.”
Since Meg Whitham (former CEO for E-Bay) took the position as CEO of HP in September 2011, HP shares have risen about 50%. Under her leadership, she has laid off at least 45,000 employees, saving HP $4.5 billion per year. Should HP split, Whitman would have leadership roles in both companies, and act as the CEO of the enterprise business and chairman of the hardware entity.
This is a perfect example of change revolving around operations management. Similar to Dell that transformed its business model to direct sales which resulted into substantial corporate savings; the separation of HP into two companies may maximize company’s efficiency for its operations, and many business analysts applaud this decision.