HP pledges to correct order processing problems

Officials said they're in 'war room' mode to reassure customers

CHICAGO -- Hewlett-Packard Co. engaged in damage control at HP World this week, assuring customers that it is working in "war room" fashion to fix its order processing problems by the end of this month. The company also said last week's weak financial report isn't a harbinger of a technology road map change (see story).

While HP's quarterly revenue rose overall, its enterprise storage and server revenue fell 5% (see story). In response, CEO Carly Fiorina fired three top executives and blamed the shortfall on execution problems.

Among those on the receiving end of the order processing problems was HP customer Patrick Slattery, a systems manager at IDX Systems Corp., a health care technology provider in South Burlington, Vt. He ordered two Intel-based ProLiant servers from HP about three and half weeks ago.

"They haven't shown up yet," he said. Slattery called HP and was told the servers were back-ordered. Normally, the servers would have arrived in five days.

Slattery said he didn't know what was causing the delay until he heard HP officials discuss it at the conference. "I never put it down to the supply chain mess," he said.

Kees denHarigh's problem with HP delivery was the opposite of Slattery's. A systems and network analyst at the University of Alberta in Edmonton, denHarigh received his orders as expected last June. But when he placed one order, including a storage array and Opteron-based servers, two showed up. He called HP.

"They were right upfront about it," said denHarigh. "They were merging the ERP systems between Compaq and HP, and they had some issues with duplication of the whole process, so the order went in at two places." The extra equipment is still boxed, awaiting return.

HP officials last week said the supply chain issues stemmed from migration problems related to an SAP AG order processing system.

Joe Nadler, a director for HP's business enterprise system unit, told customers at one conference forum that "our expectation is to be just about fully recovered by the end of August."

Nadler said "there's aggressive plans in place to make sure we catch up on late customer orders, and unfortunately, we did have some significant delays." But he said that the company is addressing the problem in "war room" fashion and that the problems have been identified. "We're now completing the fixes."

HP officials were also adamant that nothing had changed in the company's technology direction and that it is not altering any of its plans. But that didn't stop users, such as Paul Gerke, systems administrator for Clark County in Vancouver, Wash., from being concerned.

"Quarterly news can change very quickly," said Gerke, adding that, for now, Clark County intends to remain on its PA-RISC, HP-UX Unix-based systems and has no immediate plans to upgrade. "You have to wonder, if we start seeing declining results for Unix, is that the next thing?"

John Hohenfeld, operations managers at the 55,000-student Cuyahoga Community College in Cleveland, said HP's financial results "made me wonder a little, but I think they are very safe."

Safe, perhaps, but when Denys Beauchemin, chairman of the Interex HP user group board of directors, opened the floor for questions during a panel session featuring HP executives, he invited attendees to "fire away" with their questions.

It was a choice of words that prompted one HP official on the panel to quickly retort, "Don't fire away," drawing laughter.


Copyright © 2004 IDG Communications, Inc.

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