Episode 45: New Orleans Rising: DXC Technology and the Project That Launched a Louisiana Tech HubJune 25, 2018
This week we bring you the story of DXC Technology, one of the world’s largest technology companies, which announced plans in November 2017 to open a Digital Transformation Center in New Orleans. It was reported that New Orleans beat out 30 other communities to win this latest project, which involves bringing 2,000 jobs to the city over the next six years. Key to the decision was collaboration with local higher education institutions, in particular an innovative apprenticeship program piloted by GE and the University of New Orleans. To get the full story, we talk to Terrell Boynton, Director & General Manager of the New Orleans Digital Transformation Center at DXC Technology, and Michael Hecht, President and CEO of Greater New Orleans, Inc.
Andy Levine (DCI): On November 17th, 2017, Louisiana Governor John Bel Edwards took the stage at the Mercedes Benz Superdome in New Orleans to announce a historic decision from one of the world’s largest technology companies.
Patience Fairbrother (DCI): DXC Technology is the company at the center of this story, and the project is one that’s expected to create more permanent direct jobs than any other development in recent Louisiana history.
Andy: The announcement of DXC’s new digital transformation center was called “a transformational moment,” cementing New Orleans’ reputation as a tech hub on the rise that has come a long way since the devastation of Hurricane Katrina.
So welcome to episode 45 of The Project: Inside Corporate Location Decisions. I’m Andy Levine of Development Counsellors International.
Patience: And I’m Patience Fairbrother, also with DCI, and Andy’s cohost of The Project.
Andy: This week we bring you the story of DXC Technology, one of the world’s largest technology companies which announced plans to open a digital transformation center in New Orleans.
Patience: DXC is headquartered in Virginia but employees more than 150,000 people across 70 countries. It was reported that New Orleans beat out 30 other communities to win this latest project which involved bringing 2,000 jobs to the city over the next six years.
Andy: So let’s start with a little background about the company. DXC is the result of a merger between Hewlett Packard Enterprise Services and CSC, Computer Sciences Corporation. Here’s Terrell Boynton, Director & General Manager New Orleans Digital Transformation Center at DXC Technology.
Terrell Boynton (DXC Technology): I like to reference kind of the lineage is that I’ve actually been with Hewlett Packard for 18 years with various positions and then moved into DXC as part of the split Hew Co. as Computer Sciences Corporation and Enterprise combine to form one of the largest end-to-end IT service providers across the globe.
Patience: So Terrell and most other employees have been with the company since it was officially formed in 2017. But thanks to the two heavyweights that formed DXC, about a year and a half later it’s a $25-billion-dollar corporation. So some might call it the biggest startup in the world.
Andy: Before we hear from Terrell about the location decision from the company’s perspective, we want to take a step back to get a broad view of the growth of New Orleans’ tech landscape. So here’s Michael Hecht, President and CEO of Greater New Orleans, Inc., or GNO, Inc. for short.
Michael Hecht (Greater New Orleans, Inc.): Well, there really are two timelines for this story. The opportunity itself goes back now about two years when the project came to us through Louisiana economic development, as many of our projects do. And then we proceeded to work the project in partnership with the state and many other local partners for about 18 months.
But if you really want to understand the timeline of this project, I would argue you have to go back at least 12 or 13 years to 2005.
Patience: 2005 is when GNO, Inc. wrote “The Digital Media Incentive,” a policy tool that served as a catalyst for the growth of the tech industry in New Orleans and Louisiana as a whole.
Michael: Probably the best stat to look at is that the New Orleans market is currently the fastest growing technology market in the entire country in terms of percentage growth in technology jobs, and that was actually before the DXC announcement is factored in, which will certainly keep us at number one.
Andy: According to Michael, New Orleans value proposition for tech companies can be distilled to four words: low cost, high culture.
Michael: When we talk about technology in New Orleans the basic sell is pretty simple. We are low cost, high culture. When you look at the total cost of doing business in New Orleans, particularly in tech, we’re one of the lowest cost unit-sized markets in America and it’s not only because our labor rates are reasonable and because you can get class A office space for under $20 a square foot. So you combine that low cost to the culture of New Orleans, which is world famous, and in fact “The New York Times” named New Orleans the number one place to visit in the entire world in 2018. It’s a place and a brand that’s really beloved around the world.
Patience: According to Michael, key to the location decision was the fact that GNO had a friend in court, a site selector who had been involved with a previous location decision from CSC, which is one of the parent companies of DXC, to locate in New Orleans.
Michael: There was a site selector, a gentleman named Dave Snyder, who really was the lead for DXC. He was not a DXC employee. He was a vendor, a contractor, but the key thing about Dave Snyder is that he had been involved in a previous deal in Louisiana when we brought a company, CSC, Computer Sciences Corporation, to the north of Louisiana to Bossier to the Cyber Research Center. There CSC set up an operation which has grown beyond 800 jobs and the reality is that it was the success of CSC and Dave Snyder there in Bossier that gave him the confidence to recommend to the chairman of DXC that they consider Louisiana in their opportunity set.
Andy: So now let’s get back to DXC’s perspective. It wasn’t enough to be low cost and high culture or even to have a friend in court. The company plans to employ 2,000 people at its new Digital Transformation Center, so it’s no surprise that talent was the number one factor in this decision. From the beginning, New Orleans was a strong contender in this category.
Terrell: You have a slogan that says we need you to be smart-lazy, meaning that we want, you know, the individuals to focus on how they solve those problems and not create a lengthy process to solve them and New Orleans and Louisiana in general has an abundance of talent across universities and community programs that can funnel into that DXC program and provide the needed talent across those industries to support our growth as well as transformation of our clients.
Patience: This concept of smart-lazy speaks to the fact that DXC wants people who can find the fastest pathway to a solution. In a similar vein, DXC needs workers who can really hit the ground running right after university without extensive time spent on training.
Terrell: We’re seeing that the technology market is changing so rapidly that if we now need to spend two years training that individual to engage on revenue generating projects, that there is a loss of cycle. So that is a key distinguishing factor, I think, across all the cities that we looked at, that New Orleans and Louisiana presented that uniquely enables DXC to succeed here in New Orleans.
Andy: Specifically, DXC wanted to be in sync with the local university system to ensure that they can get the training that they need. Now, this brings us to number two: collaboration with higher education.
Terrell: When we talk about some of these newer talented individuals coming out of the universities, we need to uniquely craft and train and develop them within the university system rather than post-education, which increases the cost and time for those students to be able to engage on projects. So what was really important is that we were able to be closely interlocked with these university programs allow us to be able to craft the training and the development in those curriculum programs so that when a student graduates as a senior, they’ve already been engaged in DXC apprentice and internship programs, as well as have an understanding of the goals and direction within agile development that we’re asking of them from day one.
Patience: New Orleans really set itself apart in the higher education category thanks to a very successful apprenticeship model that had been tested with GE Digital and the University of New Orleans.
Terrell: So probably the best part about the incentive package, which by the way, overall was a relatively efficient incentive package is that $25 million is going to the state 2- and 4-year public institutions of higher education to set up custom training programs for DXC. This is a model that we proved out previously between GE Digital and UNO, the University of New Orleans. We set up a program there called “The SWEAP,” Software Engineering Apprentice Program, and what happens is that GE designed the program at UNO specifically for their needs.
The students go through the program, then they have an apprenticeship with GE. GE is then able to risk a try before they buy and then they hire the students that they want to go work at GE. And the ones that don’t get hired by GE go actually out into the market. And so that’s the model that we’re going to be rolling out with DXC but to a broader array of schools.
Andy: The ultimate incentive package includes $25 million to fund grants to Louisiana’s colleges and universities to write curriculum tailored to the type of software development that DXC is doing.
Patience: So now we come to number three—global access. Given that DXC operates in 70 countries across the globe, they needed to make sure the infrastructure was there to support them. Here’s Terrell again.
Terrell: When we announce six months ago on the steps of the Superdome, Steve Hilton spoke specifically about the people and the partnerships within the city, but then you equally need to have some foundational systems within the city that enable you to not only focus on our global travel but enable clients across the globe to come into the Center. So the fact that New Orleans was positioning itself with an international airport that is being revitalized as well as additional, you know, transportation hubs into the city, that was one of the key factors.
Patience: So New Orleans successfully made it to the finals based on its talent base, innovative apprenticeship program, and collaboration with higher education, as well as its access to global markets.
Andy: When DXC came for a final visit during the finals, GNO and its partners wanted to really drive home the low cost, high culture value proposition and they did that with a special dinner at the Superdome where the deal was ultimately announced.
Michael: And they came down and they tested our numbers and they agreed that, yes, in fact New Orleans would be a lower cost environment to operate in than, say, Northern Virginia where they’re headquartered, or even places like Austin and certainly the Bay Area or New York. And of course the culture speaks for itself. We did a number of things to help it speak loudly. So for example we had a very special dinner for about 12 members from DXC at the 50-yard-line of the Superdome with just us on a long table and a candelabra in the largest domed stadium in the world. We had a quintet from a local high school playing music. One of our local James Beard Award-winning chefs catered it personally and it was very much an only New Orleans type of moment.
Andy: Michael and his team even planned a special entrance for the DXC team when they arrived at the Superdome.
Michael: When we had them driven into the Superdome, we had the music that used to play when Michael Jordan would enter the court when he played for the Bulls and it was a surreal moment being at one table inside of 500,000 square foot cavernous space but it was beautiful and I think it made the point to the folks at DXC that here in New Orleans we’re going to be different but we’re going to be different in a wonderful way.
Patience: Ultimately, DXC heard the New Orleans message loud and clear and they selected the city for its new Digital Transformation Center.
Andy: The new office opened on May 23rd. The company is on target to hire 350 skilled engineers by the end of March, 2019.
So, Patience, we are up to the takeaways portion of the episode which is always my favorite part. You did both of these interviews with both Michael and Terrell. What stood out to you in regards to this particular project?
Patience: The most interesting aspect for me is definitely this apprenticeship model which GNO tested with GE previously. And essentially DXC thinks that with the technology landscape shifting as fast as it is, if they take the time to train workers after they’ve graduated from university, they’re going to essentially miss a full cycle of technologies. It’s going to take them two years. By that time they will be already working with more advanced technologies. So they use this, Michael calls it a “try it before you buy it” model where they’re working with the university not only on curriculum that’s tailored to the work that they’re doing. But they’re also using this apprenticeship to employ students as they’re learning it while they’re in school.
Andy: So these are guys who are like juniors and seniors that they’re going to be basically starting to work with while they’re in their final years.
Patience: Exactly and that’s kind of the model from my understanding. So then by the time they graduate, they’re already familiar with DXC’s technology, they can really hit the ground running with the company.
Andy: Okay, and this is with the University of New Orleans they tested this with?
Patience: Yes, that’s right. Exactly.
Andy: Okay, sounds good. So I did have one final question for you. Do you consider yourself smart-lazy or I guess the alternative would be—what—dumb and hardworking?
Patience: Dumb and hardworking?
Andy: I’m more in the dumb hardworking category.
Patience: I think smart-lazy is definitely me.
Andy: Okay, good enough. Well, that’s why we’re such a good pair here.
Andy: So that is a wrap on episode 45 of The Project: Inside Corporate Location Decisions.
Patience: We want to thank Terrell Boynton and Michael Hecht for taking the time to share their stories with us.
Andy: The Project is sponsored by DCI. We are the leader in marketing places and have served over 450 different cities, states, regions, and countries. You can learn more about us at aboutdci.com.
Patience: In case you missed it, DCI released our latest research on the topic of talent on June 5th and it has a specific focus on what factors millennials and Gen Z are considering when they’re making decisions about jobs and locations. You can now download and read our report “Go Fish: How to Reel in Tomorrow’s Talent” on our website at aboutdci.com.
Andy: It’s a great report. I hope you’ll check it out. We hope you’ll keep listening to The Project. There are many more projects to come.