The CIO-CTO Bridge: How Lenovo is Reshaping Its Leadership Structure

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CIOs manage the company’s IT operations while CTOs develop and oversee customer-facing and customer-facing technologies. At least that is the usual division of labour.

It’s an alignment that Lenovo is challenging with a new structure that blurs the lines between CIO and CTO.

Externally, Lenovo’s profile is that of a hardware company. Desktops, ThinkPad laptops, tablets, smartphones, workstations and enterprise servers account for more than 80% of the China-based multinational tech company’s business. It controls about a quarter of the global PC market, according to a July Gartner report.

Lenovo, like any multi-billion dollar company with a global footprint, also has huge internal computing needs.

These needs, from core systems operations, e-commerce support, data management and cybersecurity, to hybrid cloud and other modernization efforts, fall under the purview of Art Hu, who has become SVP and CIO. globally at Lenovo in 2017.

Hu’s CIO responsibilities are mostly inward looking. He is responsible for “all the technology that runs our business, day in and day out, and building all [Lenovo’s] non-product technology,” he said in an interview with CIO Dive.

Art Hu, vice president and global chief information officer at Lenovo

Lenovo

Hu’s tenure at Lenovo dates back to 2009, when he joined as executive director and then vice president of business innovation and IT strategy. Prior to that, he spent eight years as an analyst at McKinsey & Company.

With the PC market in a prolonged post-pandemic slump and inflation dampening discretionary IT spending, Lenovo has focused its efforts on developing its software and services division.

The company formed a Services and Solutions Group (SSG) in February 2021, centralizing its offerings as a service. To back up the decision, Hu added SSG’s CTO to his portfolio in April.

“We’ve essentially moved our CIO office into our solutions and services group,” said David Rabin, CMO of SSG.

The realignment reflects the evolving role and expansion of the CIO’s portfolio as a business driver and into areas previously isolated from IT.

The lines between technology and business function are now blurred, according to Hu. When he looks at the company’s strategic initiatives, they all have a business owner — and they all have his name next to them, too.

Despite the changing role of CIO, the technology Hu’s team deployed for Lenovo’s business operations was unrelated to the solutions the company was bringing to market.

“We have this goldmine of tools, software, and other processes that we use internally, but it’s never tied into the solutions that we sell,” Rabin said. “We can now pressure test the software supply chain, AI, metaverse business and hybrid cloud solutions we sell to the outside world.”

Bringing in-house solutions to market

Prior to assuming CTO responsibilities, Hu and his team focused on IT projects such as building enterprise management capabilities to better manage cloud resources.

SSG’s mission – to sell enterprise IT solutions to other companies’ CIOs – overlapped with many of Lenovo’s internal needs.

“We think about building new capabilities for the company day after day,” Hu said. “The sales team would come to us and ask us to have conversations with customers about it, to show them what we were doing.”

The synergy between internal technology deployments and marketing these solutions to other companies happened organically. After taking a 45-minute meeting with Hu’s team about their configuration management database platform, a customer expressed interest in purchasing it. At that time it was not for sale.

It snowballed, Hu said. Over an 18-24 month period, his group pulled together what became Lenovo’s hybrid cloud solution and coalesced around a suite of products and services that customers wanted to buy.

“We were already building capabilities for one customer – that customer just happens to be Lenovo,” Hu said. “SSG provides IT services to customers, and there are inherently shared things about delivering to Lenovo, as a representative global manufacturer, and delivering to other global companies.”

The new arrangement is already paying dividends. Lenovo’s non-PC business revenue mix reached 37% in the first quarter of 2023, the highest in company history, according to the company’s Aug. 10 earnings report. SSG delivered 23% year-over-year revenue growth and maintained an operating margin of nearly 23%.

Hu splits his time equally between CIO responsibilities and the CTO role, but plans to start leaning more towards the CTO side, he said.

As his focus shifts, it will give his CIO team the opportunity to take on more responsibility in managing IT operations, he said.

“The beauty of why it works well is that there’s always a bridge between my role as CIO and the role of CTO,” Hu said. “Any innovation that we generate internally that looks good, I can put it straight into the pipeline. We now have a process to get the most out of what we do internally in the market. »

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