After hitting rock bottom
CA president John Swainson took to the podium in a Las Vegas conference hall to the sound of upbeat rock music. He had reason to be happy. After hitting rock bottom in 2004, he has managed to return one of the world's largest software companies to market dominance.
CA, like other global companies, likes to organise its meetings in the casino city of Las Vegas, where there are modern conference halls, vast hotels and entertaining evening shows.
CA World 2007, which was held at the end of April, can hardly have been a burden for its 6,000 participants. They could choose between several hundred different talks even before the start of the official conference. There was time for networking, too, with the great and good of all the world's electronics companies present. No surprise: CA is one of the world's largest software companies. Its products and services are used in infrastructure and in security and storage systems. Anybody looking for concrete proof needed only to look at the 180 stands that took over the vast exhibition hall to know that CA produces software for a huge number of different areas.
But John Swainson's opening keynote speech was the climax. He talked about technological breakthroughs, emphasising that CA's integrated software solutions were following the latest trends. Company IT departments had in the past been hidden in the back office. This had changed. Business success was now just as dependent on IT as on marketing. CA's 18-month-old strategy had proven a success, he said. Only an economic, fast and reliable IT environment could lead to increased productivity. But it was time to go further, he said, with the Unified Service Model. The aim of this is to allow IT developers to assess any changes, plans or events in terms of how they will affect business processes and to establish a set of priorities.
CA's chief executive said he had taken steps last year to hold on to the company's leading position. He had assembled a new management team composed of experienced players in the IT sector. He had launched new programmes to strengthen relationships with clients and partners, while placing more emphasis on the opportunities arising from giant companies' approaches to systems, security and data storage. The company was investing more, buying more companies. In consequence, revenues had grown 30 per cent by the end of the financial year on 31 March.
He avoided mentioning Sanjay Kumar, the previous president. Kumar is serving a 12-year prison sentence for causing billions of dollars in damages to CA's investors. On his watch, and with his approval, the company's figures were falsified. It registered "35-day months", forward-dating revenue streams that arrived later to make results look better and allowing mangement to take home fatter pay-cheques. CA's management is considering suing Charles Wang, one of the company's founders, who served as president between 1967 and 2002. It is alleged he, too, had a part to play in the fraud. In its attempts to bury this past, the company even changed its name from Computer Associates to CA.
CA's management appear to have wiped out the past. Swainson spoke of the future, saying at the end of his speech that IT had to become more transparent and more acceptable. IT systems are getting ever more complicated. Even senior management no longer understand how they work. "This means we have to translate the incredible possibilities of the new technologies into the language of business. In future years, innovation will mean making its functioning simpler and more easily manageable," the president concluded.
Other speakers repeated this mantra. Over the past 50 years, IT has become one of the most important aspects of business. But old and new technologies exist side-by-side with each other, while IT operations are becoming ever more costly and complicated, since companies are buying in technology at different times from different suppliers. CA had recognised this, they said. Companies wanted technology not to carry out a single given task but to provide an integrated system to boost porfits. They needed a partner, it was said, not just a technology provider.
Tamas Jozsef Meleghegyi, head of CA in Hungary, emphasised this point. There is great interest in CA's software and services in Hungary as well. Banks, insurance companies and state bodies have recognised they can build a simplified IT infrastructure based on an integrated, automated, secure platform. If IT can be managed transparently, efficiently and securely, it is easier to achieve business goals. It becomes easier to share out resources, internal communication speeds up, financial auditing becomes more thorough and the company can adapt more quickly to the external environment. At the same time, it becomes easier to prevent abuses, to stop the leaking of sensitive information, and risk management becomes more flexible. In the end, whether it is a public institution or a commercial bank, performance improves and costs fall. So says the head of CA Hungary.
RICHÁRD HIRSCHLER / LAS VEGAS