When John Swainson joined Computer Associates International (CA) nearly a year ago, he found a company reeling from three years of investigations into accounting practices that have resulted in numerous indictments and the upcoming trial of its former chief executive, Sanjay Kumar. President and Chief Executive Officer (CEO) Swainson, now in the second stage of a four-year plan to renew the company, spoke last week to a group of journalists from IDG on subjects including rebuilding customer relationships and CA's massive effort to retool its own IT systems.
On CA's IT systems:
The single most surprising thing I learned when I got to CA was that there was no single source of data on anything. ... If you're going to manage a business by data and facts instead of by intuition and anecdotes you have to have good data to be able to do it. And you have to have good IT systems. ... [Going through] Sarbanes-Oxley gave us a very good start, at documenting those systems, figuring out what our processes were, so that we could then move forward and integrate and automate the internal IT systems that we have and that we'd like to have.
On implementing SAP:
We are going to do an almost complete wholesale replacement, which most people don't do, and when they do do it they do it over a very extended period of time, and we're going to do it in less than three years. ... The thing that I've learned is that if you don't understand what you want your process to be, it's very hard to tell SAP what the process is. And that sounds trivial, but it is where all the problems [start]. ... No one in their right mind does this. You do this when you're desperate, you do this when you have to.
On acquisitions:
We are very focused around the three areas of systems management, storage and security. And all of the acquisitions that you've seen us make and will see us make are things that either help us in building out a leadership portfolio in those spaces, or allow us to extend those markets. ... It wouldn't surprise me if by the end of the year we did five or six or seven hundred million [dollars worth of acquisitions]. ... We have technology in [applications management] but we aren't completely comfortable that we have the right products in all the right subcategories. So we're looking hard at build-versus-buy in that space.
On customer relationships:
I knew that CA had a problem with customer relationships. As a competitor of CA's for many years I knew that was sort of their Achilles heel. You could never beat them on product but sometimes you could get them to beat themselves. And they did on a fairly regular basis. ... So I understood that, I anticipated that. ...I hope we've moved a lot of people from a position of outright hostility which is where I know a lot of them were, to skepticism. ... We have to demonstrate by virtue of what we do, not simply what we say, that we are worthy of being a business partner to our customers, and it's going to take some time to do that. ... It's an ongoing process, it's going to take some time. I'm not under any illusions that you can stand up and declare victory and everyone will forgive you. The world doesn't work that way. One of the most frustrating things that happens occasionally is you go into a client and they'll regale you with tales of atrocities and you say, 'When did this happen?' and they say 'Oh, 1993 or 94, I forget when' -- there's such a long tail to the memories of some of our clients. Maybe it's indicative of the severity of the problem but you have to get people past that.
On the time line for reforming CA:
We feel pretty good about where we are; it's not an overnight transformation by any means. We think it's a three to four year process of rebuilding the company and we're about a year into it at this point. The first phase, which I categorize as fixing the broken problems, making the obvious things work, passing Sarbanes-Oxley, is thankfully behind us. We're into the second phase, which is laying the foundation for growth, and we hope to have that completed in the next six to nine months or so, and at that point in time we're very optimistic that we can be the leaders in the segments that we've targeted and we'll continue to look for opportunities to lead both through acquisition as well as by internally developed products.
On the upcoming trial of former CEO Sanjay Kumar
All we can do now is make sure that people recognize that the company has put a great deal of distance between itself and the past, that these things are part of the past. As part of our deferred prosecution agreement we said, 'We admit that those things happened, they were bad things, the people responsible for them were separated from the business.' Fifteen people were separated, a number of them have been indicted, five of them have already pled guilty, two of them are coming up for trial in April, Sanjay Kumar and Steve Richards. I have no idea what will happen at the trial, at that point in time we're just going to have to shut up and let justice take its course. ... Hopefully we've told our story well enough that the media and the public recognize that this is about justice taking its course and certainly it's part of the history of CA but it's not part of the future of CA.