Computer Associates International Inc. this month formally announced a re-organization of its product operations into five business units with their own development, marketing and profit-and-loss responsibilities.

The changes were set in motion earlier this year by John Swainson, CA’s new president and CEO. Swainson, who joined CA in November, spoke with Computerworld this month about the formation of the business units and other issues. Excerpts from the interview follow:

You’re outlining five new business units and other changes at CA. Why now?

It’s a follow-up to what was said last December about how to get CA focused and aligned, and with all (parts of the company) pulling on the same rope. We’ve obviously been in our final quarter of the fiscal year, and that didn’t seem like a great time for organizational changes. But now we’re through that.

What’s your goal in creating individual business units?

This is what you need if you manage a company the size of CA. You can’t manage it from the corner office. You have to create managers focused on well-defined markets and goals, and you have to give them the power to go after those goals. You have to manage the company overall in a way that looks at ROI and invested capital, and that’s not historically how CA was run.

Are these changes tied to the SAP-based ERP system that CA is developing?

It will be absolutely tied to the ERP system, which is why we had to do it now. The idea of business units was kicking around CA for a couple of years. In 2001, we took the first step with two business units, one for security and one for everything else. Then the company got distracted, as you might imagine, and nothing happened for a while.

What are the corporate customers you’ve met with over the past few months telling you about CA?

I’ve talked to hundreds of them, and they’re all pretty positive about what they think the relationship with CA can be. A lot are waiting for us to deliver on our promises, frankly. We have more to do in that regard.

I’m sure people ask you about CA’s internal accounting difficulties and the settlement deal that the company signed with the government last year. Yes, many customers have asked what we’re doing to change and how we can ensure (that) something similar won’t happen again.

So I tell them we’ve changed five of the top financial executives, we’ve replaced all 10 lawyers, we have a new CFO, CEO and chief marketing officer. Then I say that we’re investing in new ERP software and have a new compliance officer.

Your letter to customers about the new business units also mentions the need to beef up CA’s indirect sales channel, since it accounts for only about 10 per cent of your sales, with the industry average at 50 per cent. What is a good level for CA?

Well, 10 per cent can’t be right. But I don’t know if we’d ever make it to 50 per cent. Channel partnerships will help us broaden our reach. We’ll continue to focus on direct accounts.

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