‘Citizens respect what we do’
During the interview, Isherwood makes a big deal of the large size of HP and its history. While it is a testament to the company’s success, it is also a risk for the tech firm - at least in the eyes of the the UK government.
At the beginning of the year, Cabinet Office minister Francis Maude announced that no new IT contract would be allowed to be worth more than £100 million in value, unless there is an exceptional reason for it. This is the government’s bid to increase competition in the sector, and to free departments from longstanding, inflexible contracts with large IT providers.
HP has a large number of public sector contracts, including an £88.1 million contract to provide hosting payroll and HR services to the Ministry of Justice, a £13.5 million contract to provide IT support to the Ministry of Defence and a £316 million desktop deal with the Department for Work and Pensions (DWP). It recently lost a £350 million desktop outsourcing agreement with the Foreign and Commonwealth Office (FCO) to Computacenter.
“People are getting confused [that] big technology companies are so-called ‘not good’. I look at it differently. I think, we do a huge amount for citizens. I think citizens understand what we do, respect what we do and are pleased with what we do,” says Isherwood.
“I think there’s then a discussion of, so why does government want to change that? Quite often, I think it’s a lack of understanding of how we manage contracts effectively. What are the expectations of government at a central level and what do we deliver? Are the contracts delivering value for money? I would say they are.”
However, he concedes there are areas of improvement to be made in the relationship with government: “I’d say the communication and connection between central government and technology companies is probably not as good as it could be. So I think there’s a great opportunity to do that better.”
Isherwood also warns that the government is taking risks by not awarding contracts greater than £100 million.
“The danger with that is you don’t create economies of scale, which I think is very important. I think you end up creating short-term contracts that are typically ineffective, and there’s also a little known fact that it’s not just about HP and other companies like us delivering big contracts, because we actually employ a huge amount of SMEs within the supply chain,” he says.
“It’s actually quite difficult doing business with government. Smaller companies have pulled out of contracts with government [because of the difficulties].
“So there has to be a role for HP in making sure we can deliver through the SMB and SME communities, but also deliver value to government. I think that’s the balance we strive to achieve.”
‘We always catch up’
Although Isherwood is slick in his delivery of the positive HP message, he at least has enough self-awareness to admit that the tech giant has had its failings.
“Potentially, we’re late to the market in some places,” he says. “But we always catch up, and we always will.”
Fighting words indeed. Let's hope he sees another 25 years of HP delivering on these promises.
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