A 20-year veteran at business service management specialist BMC, Bob Beauchamp has worked his way up from a sales role to that of chief executive officer. He believes this career path has given him the perfect grounding to lead a firm, and also the ability to communicate effectively with customers and employees.

“Every chief executive is essentially selling all of the time, to their employees, to their customers, and to the industry,” he said. “My years in sales gave me empathy for those people who go out there and sell face-to-face with our customers.”

Those 20 years have seen many changes at BMC, both in direction and in technology strategy. “The company is a very different one to the one I joined,” Beauchamp said.

Having started life as a mainframe company that offered performance and availability tools and dealt primarily with purchasers in the lower echelons of the IT department, BMC is now a platform provider, specialising in business service management tools that in some ways remove the need for the people it used to deal with.

This change was not easy and did not happen overnight. BMC’s revenues sky-rocketed during the late 1990s, but this rapid growth soon came to an abrupt end. “We had been selling cheap to firms in exchange for the promise of extra capacity in the future. This practice worked fine until Y2K and the dot-com bubble burst. After that, the last thing companies wanted to pay for was over capacity,” he said.

It was around this time that Beauchamp became chief executive and set about making some changes. “The firm was going through a difficult time, so I began working with the board on developing a roadmap for a turnaround,” he said.

Beauchamp and his team put together a staff manual that talked frankly about the changes he wanted to put in place and the thinking behind them.

“The first chapter was called ‘Live to fight another day’, because we were in real danger at that point,” said Beauchamp. “These were rough seas and we had to make the ship waterproof. We made some very tough expense reductions, and we looked at all of our non-critical areas. There were very tough decisions to be made, but we made our company into a healthy organisation without losing any of our customers’ confidence.”

The second chapter of the manual discussed growth strategies, a key area for the new boss. “This was crucial to our successful turnaround,” Beauchamp said. “We looked at other companies that were doing well, firms like SAP and PeopleSoft, and tried to learn lessons from them.”

According to Beauchamp, both vendors had released solutions that helped firms manage disparate systems and business models: SAP had its R/2 sales tool, and PeopleSoft was doing similar things for people management.

“They had much in common ­ both realised that companies had a lot of tools and software to manage and that this added a lot of complexity,” he said. “They realised that customers were concerned that using a lot of poorly integrated point products was not a strategy that would work in the long term. People wanted integrated systems, which were open, extensible and modular.”

In short, BMC decided that the IT function was crying out for an update. Beauchamp said he was discussing the situation with the chief executive of financial firm UBS when the solution became clear to him. “He said to me, ‘All you people do is sell software to the IT department. That does not help me run the business’. This remark helped me cement the idea that whoever could take all those solutions and turn them into a platform would have a great success on their hands,” Beauchamp explained. “The idea was to manage systems from the business end down, so we set about developing that strategy. We wanted to offer firms an IT department in a box.”

However, although it could be said that the firm’s solutions will eventually lead to the end of the traditional IT department as we know it, Beauchamp strongly
disagrees. “IT departments are making decisions on managing processes now, they are not just about managing the infrastructure. Where before they dealt with technology from the bottom up, now they need a top-down view.” Indeed, rather than remove the need for IT professionals, Beauchamp said that BMC’s technology makes their job easier.

“Our platform releases people to work on adding value, it’s not about embedding them in a cost centre,” he said. “No chief executive can stand still, they have to be adding things all the time. If they can automate the running of a business, they can spend that money on change.”

Beauchamp said he recently spoke to the IT manager of an Indian car maker who told him that by using BMC’s platform his firm had been able to reduce the number of people dealing with pure IT issues and free them up to spend time on more valuable initiatives. “Even though the firm enjoys the financial benefits of being in India ­ low-cost labour for example ­ this was not enough. It wanted to automate its IT, and in doing so was able to free up 20 per cent of its IT workers’ time and its infrastructure,” he said.

With all this success in an industry increasingly dominated by acquisition and consolidation, BMC would presumably be an attractive target for other vendors looking to expand their own IT automation and management capabilities. But Beauchamp maintained that this is unlikely to happen.

“We outperform virtually every other company in our space. This means that we have been the consolidator, but only with firms that fit in with our strategy. BMCs financial strength in a marketplace known for its peaks and troughs has enabled the firm to buy well, and economically,” Beauchamp said.