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HP Establishes Business Agility Indexes to Enable Companies Worldwide to Measure Performance

PALO ALTO, Calif., Nov. 11, 2004

HP today announced vertical industry indexes for measuring the agility of critical business processes and IT infrastructure to help companies worldwide assess and ultimately improve business performance.

Based on data gathered from business and IT executives at more than 300 global enterprises in the financial services, manufacturing, IT service provider and telecommunications industries, the vertical industry indexes allow companies to identify, prioritize and address high-value areas of business operation that may not be responding effectively to changing market conditions.

Due to the diversity of business sectors from which the data was gathered, companies also can compare the agility of their critical business processes and IT organization against others in their industry.

The vertical industry indexes are part of HP’s Agility Assessment Service – the industry’s only IT service based squarely on the concept of agility. Serving as a key initial step on the journey of becoming an Adaptive Enterprise, the indexes help enterprises establish prioritized, real baselines to measure and assess the synchronization of business and IT.

"HP's Agility Assessment Service is an important first step to helping companies take advantage of emerging dynamic computing products and infrastructures," said John Madden, analyst, Summit Strategies. "What sets it apart from other assessment services is that it is designed explicitly to help companies define and measure both business and IT agility, to explore the links between the two, and uses a methodology that is geared to a customer's specific vertical industry."

The research that forms the basis for the indexes identified that, across industries, there are three main obstacles to achieving agility:

  • Inflexible IT budgets to changing business conditions such as increased IT governance demands;

  • Rigid, unsynchronized IT infrastructures that impact business performance in areas such as time to market; and

  • A lack of integration across the key business processes that connect customers, partners/suppliers and employees.

After completing an HP Agility Assessment, customers will be able to measure their business agility against the agility index in their industry and will receive a diagnosis on how their business is performing ahead of competitors and where performance is lagging.

"In this competitive global environment, companies are more challenged than ever to determine how to effectively respond to changing business conditions," said Nora Denzel, senior vice president, Adaptive Enterprise, HP. "Companies know they want to respond more quickly and effectively to change, however until these vertical industry indexes were developed, they didn't have a way to gauge just how much more responsive they needed to be and which business processes were impeding their efforts to be more agile."

Real life examples of companies better synchronizing business and IT

Global manufacturer, Steelcase, a leading maker of equipment for office environments, was quickly growing through acquisition and was looking for a way to respond to changing business conditions. To remain competitive, Steelcase realized it needed to drive complexity out of the business, reduce variable costs throughout the supply chain, improve return on IT, and balance investments between long-term growth and short-term performance.

"The assessment isn't just for IT, it's for the business itself - where we are strong and where we are weak. The whole point of IT is to benefit the business, so we needed to be sure we had the right practices in place to support the business," said John Dean, vice president Global E-Business and chief information officer, Steelcase, Inc. "The HP Agility Assessment was very specific to Steelcase. It's not a generic report that says: 'You're not agile,' but rather one that outlined the actions we could take to make IT resources more adaptive to change and to create a synergy between IT and business value."

China Life Insurance Company Limited enjoys great advantages from its large size; no rival is likely to immediately threaten its leadership. However, China Life recognizes the competitive threats, realizes the importance for continuous growth in the rapidly growing Chinese insurance market, and understands that core competitiveness of life insurance companies needs to be correctly delivered through IT.

"In today's insurance industry, change is permanent and inevitable. Drastic change greatly influences longstanding giants like China Life," said Wan Feng, vice president, China Life. "HP helped us build a strategic IT plan, which will allow us to establish our core competitiveness and adapt to new trends in the future."

The global agility research was done in collaboration with INSEAD, the No. 1 ranked international business school, based in Fontainebleau, France. To develop the vertical industry indexes, scores of business and IT executives were interviewed over the past year to identify potential business process barriers to agility. Furthermore, three key criteria of business responsiveness were measured: time - how rapidly can changes be made; range - how well change is cascaded throughout an organization; and ease - how much organizational effort is required to make changes.

"The startling reality is that while market change continues to happen more quickly, companies are actually reacting to change more slowly," said Dr. Kishore Sengupta, associate professor of Information Systems and Research Program manager, INSEAD. "Measuring agility is vital today because it is emerging as one of the key indicators of a company's ability to perform successfully in changing market conditions."

More information about the HP Agility Assessment Service is available at http://www.hp.com/hps/strategy/sa_assess.html.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. For the four fiscal quarters ended July 31, 2004, HP revenue totaled $78.4 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at http://www.hp.com.


This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the expected development, performance or rankings of products or services; statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the development, performance and market acceptance of products and services and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's Quarterly Report on Form 10-Q for the period ended July 31, 2004 and other reports filed after HP's Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2003. HP assumes no obligation and does not intend to update these forward-looking statements.

About HP

HP Inc. creates technology that makes life better for everyone, everywhere. Through our portfolio of printers, PCs, mobile devices, solutions, and services, we engineer experiences that amaze. More information about HP Inc. is available at http://www.hp.com.