CIOs manage enterprise IT operations while CTOs develop and oversee customer- and client-facing technologies. That’s the customary division of labor, at least.
It’s an alignment Lenovo is challenging with a new structure that blurs the lines between CIO and CTO.
Outwardly, Lenovo’s profile is that of a hardware company. Desktop PCs, ThinkPad laptops, tablets, smartphones, enterprise workstations and servers account for more than 80% of the China-based multinational tech company’s business. It controls roughly one-quarter of the global PC market, according to a July Gartner report.
Lenovo, like any multibillion-dollar company with a global footprint, also has massive internal IT needs.
These needs, from core systems operations, e-commerce support, data management and cybersecurity, to hybrid cloud and other modernization efforts, are the purview of Art Hu, who rose to SVP and global CIO at Lenovo in 2017.
Hu’s CIO responsibilities are primarily inward facing. He’s responsible for “all the technology that runs our business, day in and day out, and building all of [Lenovo’s] non-product technology,” he said in an interview with CIO Dive.
Hu’s tenure at Lenovo dates back to 2009, when he joined as executive director and then VP of business innovation and IT strategy. Prior to that, he spent eight years as an analyst at McKinsey & Company.
With the market for PCs in a prolonged post-pandemic slump, and inflation dampening discretionary IT spending, Lenovo has sharpened its focus on building up its software and services division.
The company formed a Solutions & Services Group (SSG) in February 2021, centralizing its as-a-service offerings. To shore up that move, Hu added CTO of SSG to his portfolio in April.
“We basically moved our CIO office into our solutions and services group,” said David Rabin, SSG’s CMO.
The realignment reflects the evolving role and expanding portfolio of the CIO as a driver of business and into areas previously cordoned off from IT.
The lines between the technology and business function are blurry now, 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 as well.
Despite the evolution of the CIO role, the technology Hu’s team deploys for Lenovo’s business operations were untethered from the solutions the company was bringing to market.
“We have this goldmine of tools, software and other processes that we use internally, but that was never connected to the solutions that we sell,” Rabin said. “We can now pressure test software supply chain, AI, metaverse activities, and hybrid cloud solutions that we sell to the outside world.”
Bringing in-house solutions to market
Prior to taking on CTO responsibilities, Hu and his team focused on IT projects like building enterprise management capabilities to get a better handle on cloud resources.
SSG’s mission — selling enterprise IT solutions to CIOs at other companies — overlapped with many of Lenovo’s internal needs.
“We think day in and day out about creating new capabilities for the business,” Hu said. “The sales team would come to us and ask us to have conversations with customers about that, to show them what we were doing.”
The synergy between in-house tech deployments and marketing those solutions to other companies happened organically. After taking a 45-minute meeting with Hu’s team about their configuration management database platform, one customer expressed interest in buying it. At that time, it wasn’t for sale.
It snowballed, Hu said. Over a period of 18 to 24 months, his group pulled together what became Lenovo’s hybrid cloud solution and coalesced around a suite of products and services customers wanted to purchase.
“We were already creating capabilities for one customer — that customer just happens to be called Lenovo,” Hu said. “SSG is delivering IT services to customers, and there are some intrinsically shared things about delivering to Lenovo, as a representative global manufacturer, and delivering to other global companies.”
The new arrangement is already paying dividends. The revenue mix from Lenovo’s non-PC businesses reached 37% in Q1 2023, the highest in the company’s history, according to the company’s Aug. 10 earnings report. SSG saw revenue growth of 23% year-over-year and held an operating margin of almost 23%.
Hu splits his time equally between CIO responsibilities and the CTO role but plans to begin skewing more toward the CTO side, he said.
As his focus shifts, it will give his CIO team the opportunity to take more responsibility over managing IT operations, he said.
“The beauty of why this works well is there's always a bridge between my CIO role and the CTO role,” said Hu. “Any innovation that we're generating internally that looks good, I'm able to put directly into the pipeline. We now have a process to take the best of what we do internally into the marketplace.”
