Vol. 11, No.
2____________________________________________________________
March 1992
"MGMT MEMO" was written by Richard Seltzer
in Corporate Employee Communication for the Office of the
President. It was written for Digital’s managers and
supervisors to help them understand and communicate business
information to their employees. You can reach Richard at seltzer@seltzerbooks.com
CONTENTS
Architecture
for the 1990s (Ken Olsen)
The
architectural goal of the 1990s is to win back those
industries that we lost in the 1980s. We need to organize to
satisfy the customer needs of all industries. Some of these
needs may seem mundane or trivial, but yet are very necessary.
Some customers require special software, or simply brackets
and electrical adapters. This means our Industry Marketing
groups must take an intense interest in their customers’
needs, and responsibility to ensure we fulfill those needs.
Product
Development Based on Customer Needs (Ken Olsen)
In the past, as
is true in most computer companies, our Engineering groups
chose and developed the products, and Marketing and Sales then
had the job of getting them to customers. We are changing our
approach to product development to one that is traditional in
other industries and that, due to changes in the computer
industry, is now more appropriate for us. Marketing and Sales
will define the needs of the customer, and Engineering will
generate the products to fill those needs.
Frank McCabe has
been put in charge of our Global Information Systems, which
includes "mainframe computing" or "production systems." He
will be responsible for planning, organizing and running all
our activities in these areas. Meanwhile, Charlie Christ has
been put in charge of Digital’s Departmental, Medium and Small
Business group. He will be responsible for ensuring we have an
integrated set of hardware and software products for small and
medium-size companies, and also for departmental and office
computing. He will integrate our offerings into a smaller set
of hardware and software that will satisfy customer needs in a
way that is easier to understand, easier to design and easier
to learn.
Digital
has Re-Entered the Personal Computer Business (Ken Olsen)
We have
developed an extensive plan for designing and manufacturing
our own personal computers. Until recently, this has not been
part of our activity; but from now on. it will be a key part
of our personal computer business. Our Catalog Sales Group
will define the high production machines, and our Engineering
groups in several areas of the world will design them. These
personal computers are being built from sub-assemblies made in
Digital facilities, or purchased from other vendors, and
manufactured in the U.S.. Canada. Europe and Asia.
Evolving
the Organization to Grow Marketshare (Jack Smith)
We’re focusing
our energies on those products and services that are needed to
do the whole job for the customer. We need to be more
market-driven, to allocate our investments based on clearly
understood customer needs. We must limit what we do so we can
do it with excellence and market it completely. We will
optimize our product cost and quality by using a small number
of common parts designed to disciplined standards. To grow
market- share, we need to be leaders in all the industries
identified for us by Industry Marketing. We’ll provide
leadership in our industry by guaranteeing information system
solutions - products and services for global enterprises,
departments, and smaller enterprises — based on client-server
computing.
Alpha is the
first of a new generation of full 64-bit RISC computing
architectures. With the capability for a 1000-fold increase in
speed, this architecture has been designed to endure for at
least 25 years. It supports multiple operating systems,
beginning with DEC OSF/1 and Open VMS. The first Alpha product
- the 21064 - is the industry’s fastest microprocessor.
Alpha
Marketing Strategies (Ed Pastor)
The Alpha
program embodies all aspects of Digital’s Open Advantage.
Alpha is the basis for Digital to be the industry’s technology
and solution leader through the 1990s and into the next
millennium.
DECWORLD
Strategy (Deb Nicholls)
DECWORLD ’92,
scheduled for April 27 to May 15, will be an international
event, held at one location — the World Trade Center in
Boston, Massachusetts. We anticipate 25.000 visitors, each
staying for an average of two and a half days. This will be a
proof point of the Open Advantage campaign.
Removing Barriers for
People with Disabilities (Jim Cudmore and Jack Rugheimer)
Several years
ago, a group of senior managers and other people concerned
about the treatment of people with disabilities formed a
Disability Strategy Committee, with representation from
various organizations and disciplines throughout the company.
Today, we have the beginnings of an organized approach to
dealing with access to computer and communication equipment,
access to facilities, revisions to policies and general
awareness.
Making
Profits Selling Components and Manufacturing Capability
(Jim Willis)
Digital’s
investments in component-level research and development
(R&D) result in an increasing flow of leading-edge base
technology — fundamental building blocks necessary for
development of world-class systems and solutions. This
hardware and software can be profitably sold as separate,
volume commodity products, in addition to their use as parts
of complete computer systems. And Digital’s expertise in
designing and building them can also be sold for a profit.
Tracking Profit in Systems
Integration Programs (Fran Maycock)
We
are developing a management tool to collect cost and revenue
information from many different organizations to track profits
by customer program. This initiative — Customer Program
Reporting (CPR) — is designed to meet the business and
financial management needs of Digital’s rapid growing Systems
Integration business. The information CPR will make available
is analogous to what the New Management System (NMS) provides
to Business Unit managers.
In
the 1960s and early 1970s, our approach to business was
industry-oriented. We had many groups, each of which was
driven to supply all the needs of their industry. We also had
a core of computers and peripherals, and developed a variety
of computer architectures and operating systems. The results
were great.
In
the early 1980s we shaped the company around a simple, elegant
systems architecture. We committed to one computer
architecture, one operating system, one protocol and one
networking system, and a method of tying them together in
clusters. The results were great.
But with our
great success in systems architecture, we let the emphasis on
industries and customer needs slide. We invested huge sums of
money in systems that were elegant; but because we lost the
concentration on the industries and because we did not develop
the myriad odds and ends of non-architectural equipment and
software each industry needed, we lost our position in those
industries where we had excelled a few years earlier.
In
the 1990s, we can no longer have one architecture because our
customers have insisted on having several, and most customers
have not yet learned to tie their various systems together.
Additionally, computer architecture is a smaller part of our
overall effort because the architecture is largely
concentrated within the chip.
The
architectural goal of the 1990s is to win back those
industries that we lost in the 1980s. We need to organize to
satisfy the customer needs of all industries. Some of these
needs may seem mundane or trivial, but yet are very necessary.
Some customers require special software, or simply brackets
and electrical adapters. This means our Industry Marketing
groups must take an intense interest in their customers’
needs, and responsibility to ensure we fulfill those needs.
The press has
recently reported many changes at Digital, most of which I do
not recognize at all. Indeed, there is a lot going on in the
company right now, and people are working very hard —
particularly because DECWORLD is just two and half months
away. DECWORLD is our opportunity to present all our products
in one place and in one consistent array. Everyone aims to
have all their products rationalized, organized, and presented
in a complete program for that event. This means we quickly
fill in any gaps in our offerings, change things that do not
look right and sometimes cut products that do not fit or are
easy to postpone.
Sales people and
customers consistently complain that we have too many
products. In the past, as is true in most computer companies,
our Engineering groups chose and developed the products, and
Marketing and Sales then had the job of getting them to
customers. We are changing our approach to product development
to one that is traditional in other industries and that due to
changes in the computer industry is now more appropriate for
us. Marketing and Sales will define the needs of the customer,
and Engineering will generate the products to fill those
needs. This may sound like an uninteresting change, but it
means developing fewer products and concentrating attention on
products which would not have been developed in the past
because, although customers want them, they are in areas which
seemed too specialized for Engineering.
The goal of
having fewer products is to make it easier to sell what we
have, to allow us to spend more on the specialized products
needed for each particular industry and to allow us to invest
more on development of products for the future. It may turn
out that we end up spending less on Engineering. However, as
we carry out this program, it is also possible that we will
find it is wise, in some areas, to spend more as we focus our
efforts specifically on the needs of customers.
We are sometimes
criticized for not making product decisions from the top by
edict in a very fast, efficient way. It has been our
experience that any one person, particularly at the top, has
too narrow a view of the world to lay out product plans.
Product plans are a combination of years of experience,
observation, and study by those people who are close to the
market and close to engineering. Products have to come from
these areas — from the many people who have the experience and
knowledge - even though it may appear less efficient than
deciding on products by edict. That will continue as we shift
the emphasis in our product development to the needs of the
customer, as defined by Marketing and Sales.
Frank McCabe has
been put in charge of our Global Information Systems, which
includes "mainframe computing" or "production systems." He
will be responsible for planning, organizing and running all
our activities in these areas.
Minicomputers
have often approached the capability of mainframes, but most
of the time are not used in the environment that had the
discipline of mainframe computing. PCs and workstations often
have the computation speed of a mainframe but are far from its
input/- output capability, and very far from the discipline of
mainframe computing.
Mainframe
computing takes place, by tradition, in a production shop that
produces large amounts of computing, on schedule, with great
reliability, discipline and security. It is inconceivable that
payroll checks not be completed when due, or that critical
business data be lost. In many organizations, it is
intolerable not to have marketing data generated from the
previous day’s sales available the first thing the next
morning.
We have had
great successes with our VAX 9000 mainframe computer, but we
also had some problems. Our Service people say only one
percent of the problems were hardware related. All others were
problems in scheduling, organizing and disciplining the
applications put on the machine. We made the mistake of not
including in the price of the computer, a full-time consultant
systems engineer to help organize the software to ensure it
ran efficiently and well.
Today, many
companies distribute their mainframe computing around the
world, which makes the networking and communication
disciplines more critical and more challenging. These are
areas in which we have a lot of experience, and will probably
be one of our big contributions to this part of the industry.
Because of the importance of the global nature of mainframe
computing, we have titled the organization the Global
Information Systems Group.
Frank McCabe
will be responsible to make sure we have an organized,
disciplined approach to this most organized and disciplined
market. We have exciting products for our mainframe
customers, and Frank will balance these with the discipline
they need.
Meanwhile,
Charlie Christ has been put in charge of Digital’s
Departmental, Medium and Small Business group. Because of our
expertise in products and networking, we have been a leader in
the integrated office. Charlie will be responsible for
ensuring we have an integrated set of hardware and software
products for small and medium-size companies, and also for
departmental and office computing. Charlie will integrate our
offerings into a smaller set of hardware and software that
will satisfy customer needs in a way that is easier to
understand, easier to design and easier to learn.
Digital probably
has, by far, the largest private computer network in the
world. We tie
all 120,000
thousand people together. We have over 80,000 computers on our
multi-vendor, multi-protocol, internal network, and people
from terminals and other desktop devices can instantly share
data, mail, drawings, documents and images. Above all, our
network allows Digital to form teams — some ad hoc and
short-term, and some permanent — that work together in spite
of the fact that the members might be spread around the world.
This networking has been a key part of Digital’s growth and
success through the years.
Charlie’s job
will be to show how small and large organizations can use this
communication and networking to build teams within an office
and across a company. In addition, he is responsible for
providing all the computing capabilities normally used within
a department or a small company.
Since we
re-entered the personal computer business a few years ago, we
have done quite well. Our PC Group under John Rose explored
ways of marketing and selling, and developed effective
strategies. We started by buying PCs from other manufacturers
with the advantage of offering our customers the best of what
was available. To serve our customers better, we also tried
different ways of selling and marketing to find the most
effective and efficient and settled on catalog sales as the
best tool. Catalog sales give us the opportunity to provide
information to our customers in a concise, simple format, and
allows them to design, choose and learn.
Our catalog
people organize the family of computers they want and order
them either from in-house Engineering and Manufacturing, or
sometimes from other vendors. They also develop marketing
plans, literature, pricing and sales strategy.
Our PC Group
successfully defined the market in which we are interested,
identified our approaches to computers, and helped to develop
catalog sales. The results look very promising and we are
enthusiastic about them.
Now we are ready
to move on to the next stage in this business. The success of
developing an effective marketing tool means we will now
concentrate on that tool. We are, therefore, combining our PC
Group and our Catalog Group into one organization which will
be called the "Catalog Sales Group."
Meanwhile, we
have developed an extensive plan for designing and
manufacturing our own personal computers. Until recently, this
has not been part of our activity; but from now on, it will be
a key part of our personal computer business. Our Catalog
Sales Group will define the high production machines, and our
Engineering groups in several areas of the world will design
them. These personal computers are being built from
sub-assemblies made
in Digital
facilities, or purchased from other vendors, and manufactured
in the U.S., Canada, Europe and Asia.
The personal
computer business is exciting and ever-changing. While the
technology continues to improve, the price of the product
keeps going down, and the cost of doing business must also go
down.
Selling PCs is a
classic business problem. Unlike most of the computer
business, every cost detail and activity is critical to its
success. The capital investment is low, but so is the profit
level. Even the most minute cost is critical. We need to look
at every detail of logistics and distribution problems. We
can’t tolerate extra charges for handling, shipping or
warehousing.
Personal
computing is a natural business for Digital, and we have been
consulting with customers on these activities for years. While
the rest of the world sees the PC market slowing down, we are
looking forward to significant continued growth in the PC
business.
in our effort to
do a much better job of delivering complete solutions to
customers, we're continuing to evolve our organization and the
new Management System. We’ve assigned a few senior people to
new responsibilities and have made some other organization
changes with the aim of simplifying our operations to better
meet the needs of important sets of customers. The most
significant organization changes are in Marketing, where Bill
Johnson now heads Industry Marketing, Frank McCabe has Global
Information Systems Marketing, and Charlie Christ leads
Departmental and Small-to-Medium-Enterprise (SME) Marketing.
The Global and
Departmental Marketing roles are new, and we’re still refining
them. Basically, our intention is to deliver more complete
solutions for targeted sets of customers. That will require
the new marketing groups to do technical work in the area of
systems engineering and integration of software, hardware and
third-party applications. At the same time, they must also
work with Engineering to sharpen our product direction.
We intend to
take full advantage of our technological leadership and
experience in being able to solve very complex customer
problems. We have a strong headstart over everyone else in the
industry in our approach to multivendor systems integration
with Network Application Support (NAS). Today, all the complex
and interesting customer problems are multivendor ones. Many
are even multi-customer, involving information transfer
between a company and its suppliers and customers.
Basically, we’re
focusing our energies on those products and services that are
needed to do the whole job for the customer. We need to be
more market-driven, to allocate our investments based on
clearly understood customer needs. We must limit what we do so
we can do it with excellence and market it completely. We will
optimize our product cost and quality by using a small number
of common parts designed to disciplined standards. To grow
marketshare, we need to be leaders in all the industries
identified for us by Industry Marketing. We’ll provide
leadership in our industry by guaranteeing information system
solutions — products and services for global enterprises,
departments, and smaller enterprises — based on client-server
computing.
We recognize the
importance of professional disciplines that are central to our
business. We’ve developed a framework around "key
competencies" to focus our long-term investments and develop
our people in such areas as Marketing, Engineering,
Manufacturing, Services and Sales. At the same time we need to
institutionalize education and development to support our
strategies and competencies. We’ll retrain people as program
managers, systems engineers and software specialists to
sustain our future business growth in systems integration and
consulting and services.
We have
developed a unique style of working in this company. We
emphasize both teamwork and leadership. Our products and
services mirror that style — enabling different products from
different vendors to work together, as well as enabling the
people who work for our customers to work as teams. That’s the
essence of the Open Advantage.
We can’t help
but be optimistic when we see the enthusiastic reactions of
analysts and customers to our strategy. Years of effort and
many millions of dollars of investment are coming to fruition
in a new generation of computer products that could
revolutionize the industry. This is happening at a time when
we are faced with the hardest challenges in our company’s
history. We need to fully appreciate both the difficulties we
face and the enormous return that is at stake. Strategies and
organizational change mean little unless plans are executed in
a timely and professional manner. Hard work is very important,
but not enough on its own. To operate as a team on a global
scale, we need to follow through on our commitments. We need
to be able to count on one another, predictably, to seize the
opportunities that are within our grasp.
(The following
article is intended to help mangers better understand this
important new direction for the company so they can explain it
to their employees.)
Alpha is the
first of a new generation of full 64-bit RISC computing
architectures. With the capability for a 1000-fold increase in
speed, this architecture has been designed to endure for at
least 25 years. It supports multiple operating systems,
beginning with DEC
OSF/1 and Open
VMS. The first Alpha product - the 21064 - is the industry's
fastest microprocessor.
Alpha offers
open business practices (licensing the architecture; sale of
chips, boards, and systems; and licensing of Digital software
for all Alpha systems,) It also means open services (partner
services and customer services). Digital is establishing
partnership with semiconductor companies, other computer
vendors, OEMs and software application providers to build
volume and firmly establish the leadership of this new
architecture.
Alpha both
enhances Digital’s current products/services and opens new
business opportunities. Digital will provide clearly defined
upgrade paths to Alpha from current products, and will provide
services for integration of new technologies. Alpha systems
will extend and complement today’s VAX and DECsystem products
by plugging into the same networks and clusters and sharing
the same software, data and applications. At the same time,
Alpha will generate new opportunities, in areas such as
mainframes, high-performance UNIX applications, OEM markets,
and new services.
On February 25,
at press events in Hudson, Mass., South Queensferry, Scotland,
and Tokyo, Japan, Digital announced Alpha — the industry’s
first 64-bit RISC computing architecture designed for the
twenty-first century, and the first Alpha product—Digital’s
21064 microprocessor, the industry’s fastest.
We also
announced new open business practices and open services for
Alpha. Alpha open business practices include licensing of the
Alpha architecture and software to other vendors, and the sale
of Alpha products at all levels of integration - chips, boards
and systems. Open services for Alpha encompass services to
help end users integrate Alpha into their existing computing
environments, and services to help other vendors design Alpha
into their products.
The Alpha
program embodies all aspects of Digital’s Open Advantage.
Alpha is the basis for Digital to be the industry’s technology
and solution leader through the 1990s and into the next
millennium.
The Alpha 21064
microprocessor will form the basis of a family of Digital
systems with capabilities that span from the desktop to the
data center. Alpha systems will run Open VMS or DEC OSF/1
software. In fact, the Alpha architecture will allow us to add
support for other popular operating systems, such as
Microsoft's Windows/NT. This flexibility, together with the
capability to support a thousand-fold increase in speed over
its lifetime, and an addressing capacity that is four billion
times greater than that of the VAX
architecture,
promise that the Alpha architecture should have a long life,
even in the rapidly changing and highly competitive computer
industry.
Not only does
Alpha provide a leadership vision for the future, but it also
offers a solid bridge from the present. Customers can
confidently purchase today’s industry-leading VAX and
DECsystem products because their investments in software,
applications, data, user training and many peripherals are
protected by tomorrow’s Alpha systems. Today’s VAX and
DECsystem products will continue to be aggressively promoted
and sold to customers. Today’s products provide
industry-leading solutions to customers’ needs.
Customers will
be able to add Alpha systems seamlessly to their existing
computing environments. Customers can add Alpha when and if
they need to. Alpha enhances the value of customers’
investments in today’s systems and helps us sell today’s
products.
But Alpha is not
just a product for our current base of customers. Alpha opens
the door for profitable growth in many areas. With Alpha, we
can revitalize our Technical OEM business, selling chips,
boards and complete systems to other computer vendors. On
February 25, Cray Research and Kubota Pacific announced their
commitment to Alpha. Other vendors will follow shortly.
There are
tremendous opportunities to sell Alpha into embedded
applications in a number of industries, such as
telecommunications, industrial automation, medical imaging,
and military/aerospace. We expect to announce successful
sales to this class of customers soon. Alpha product sales
open important opportunities for the sale of Digital software
and services.
Alpha puts us in
the position of being industry leaders. It puts us in the
headlines as the standard of performance and capability
against which competitors’ new product offerings are
compared. It puts our name in front of the customer whenever
there are discussions of such topics as open systems,
client/server computing, RISC, and advanced technology. It
adds a strategic, future dimension, with a twenty-year-plus
path of evolution, to every Digital purchase a customer makes
today.
People will ask
how Digital was able to jump so far ahead of the RISC
competition. The basis of our success is the core competencies
we have built over our history. We have the ability to design
effective architectures that endure for many years, proven by
our success with the VAX and PDP-11 families. We can design
high-performance CMOS microprocessors based on the Alpha
architecture. We have world-class semiconductor fabrication
technology, focused on producing high-speed microprocessors.
(The microprocessors in today’s VAX systems are the fastest
CISC [complex instruction set] microprocessors in the
industry.)
In
addition, we have experience designing balanced systems of all
sizes, from the desktop)
to the data
center. We have the software engineering ability to build
optimizing compilers that are necessary to take full
advantage of the hardware capabilities of RISC systems. We
can build all of the "middleware" — the languages, networks,
and other software needed to produce the rich distributed
environment that customers need. And we have global sales and
services presence, as well as financial strength and staying
power.
In other words,
while Alpha represents a major advance for Digital and the
computer industry, it is based on a firm foundation of
experience and proven technology.
The structure of
the computer industry is changing, and Digital has the core
competencies to emerge as an industry leader as this shakeout
occurs. Few of our competitors possess the breadth of
capabilities needed to prosper into the 1990s and beyond. Many
may disappear, or change their business model to become
assemblers of key technology components supplied by a few
leaders. Digital is committed to being a technology leader in
the industry.
Many customers
utilize software from independent developers, and Digital has
a massive program under way to work with them to get their
software migrated onto Alpha. Our goal is to have a thousand
key existing applications converted to Alpha by the time
systems are shipping.
Alpha will also
facilitate development of a new generation of "high-impact"
applications that use power-consuming advanced technologies,
such as imaging, multi-media, voice recognition, artificial
intelligence and virtual reality. We will see software
developers increasingly choose Alpha as their platform of
choice for new and existing applications.
The
price/performance of Alpha will allow users to economically
deploy existing supercomputer applications — such as seismic
data analysis, computational chemistry, econometric
forecasting and molecular modeling — to a wider range of users
than was previously affordable.
The computer
industry is changing rapidly, and Alpha helps us position
Digital as a leader in the forefront of this change. Alpha
presents many opportunities for profitable growth — not just
in our systems businesses, but also in our software, services,
application, and embedded hardware businesses. As the Alpha
program roll-out continues over the coming months, I hope
employees across the company will continue to be excited about
making the Alpha vision a reality for Digital and our
customers.
DECWORLD ’92, an
international event, will be held April 27 to May 15 at the
World Trade Center in Boston, Massachusetts. It is anticipated
that 25,000 visitors — customers, prospects, press, and sales
people — will attend DECWORLD ’92 during those three weeks.
For the past
year we have been delivering messages about Digital’s Open
Advantage, and introducing new products, services, and
business practices to support our claims. DECWORLD ’92
provides the proof points of the Open Advantage — bringing
everything you’ve heard about it under one roof, and adding a
glimpse of the future. Customers will encounter real examples
of openness: products built on standards working in
multivendor environments, success stories of systems
integration and global support, and Digital's progressive
software licensing strategy.
In addition to
"Open", the program has been designed to focus on the
benefits, or "Advantages", that Digital brings to the
customer. The best technology and services, a wealth of
partners, and the flexible practices that Digital offers are
of no value unless they help to the customer some way. That
means listening to our customers, demonstrating our
understanding of their issues, and showing the willingness
and flexibility to work with them to solve their problems so
that they can succeed.
In today’s
recessionary economy, companies are interested in their
business revival and how we can be their partner. We’ll
highlight our management consulting capabilities as part of
this. Sales people and their customers will have the
opportunity and space through the World Trade Center to confer
with experts, senior management, or consultants. These can be
scheduled in advance through the Account Visit program, or
happen ad hoc as the occasion warrants.
Of course,
DECWORLD ’92 will also provide us with an opportunity to
showcase Digital’s latest technology, which customers always
want to see. We have developed the floor with industries and
technologies logically adjacent to one another, to make it
easier for the customer to connect with the right people.
The forerunner
to DECWORLD, known as "DECtown," was done for sales people to
educate them on our products. The sales people loved it so
much they said they wanted to bring their customers. The first
DECWORLD was open to anyone who wanted to come. Then, over the
years, we’ve targeted this event more and more toward
senior-level people. This DECWORLD, like the last two, will
be admission by invitation only, to make sure that we have
qualified customers or prospects, and to make sure it’s the
audience for which we’ve targeted the program. As much as
possible, sales people escort their customers.
The success of
past DECWORLDs has been due to the hard work of many good
people operating as a team. Nearly 5,000 Digital employees
will have some responsibility in shaping and staging DECWORLD.
This time, we have been able to get Sales involved earlier,
which helps both in the planning and the implementation.
We’re making it
easier for sales people to find out what’s going to be at
DECWORLD, to assist them in both the invitation and visit
planning processes. First we have a VTX application that
anyone in Digital can access. VTX DECWORLD includes
information about the invitation and registration process, the
speaker series, special events, sales tools, and a complete
set of abstracts of demonstrations and session planned for
DECWORLD. This information will help the Sales force to
encourage customers to pre-register, which enables us to
balance the volume of visitors over the three weeks, for
everyone’s comfort and convenience. Europe and GIA are
balancing their customers over all three weeks. The U.S. is
focusing on the first two weeks, which will leave space for
spill-over and late registrants in the third week.
Preparing this
complete information early forced many people involved in the
event to make decisions and get their piece of work done
sooner, rather than wait until the last minute. Doing this
also gives us more time to improve the quality.
To make it
easier for customers to find their way around, we’re using the
metaphor of a "global village." Store fronts will represent
the various industries. In addition, a Corporate Headquarters
area will be set up to address the business problems and
planning needs of an Information Technology (IT) vice
president, including overall services, and worldwide messages.
An area known as Technology Park will have the products
themselves and experts who can explain how to use them to
solve business problems.
We’ll also have
a "distinguished speaker series." These speakers - including
Casper Weinberger, Henry Kissinger and C. Everett Koop — will
talk about matters of general concern, such as economic,
geopolitical, environmental and health issues.
While preparing
for this event, we are also repackaging the content so we can
deliver it to the Field afterward for reuse. For example, a
customer may be particularly impressed by a seminar or a demo
and want to share it with others. The sales rep can then
re-create some of that experience back at that customer’s
site, for more people.
Several years
ago, a group of senior managers and other people concerned
about the treatment of people with disabilities formed a
Disability Strategy Committee, with representation from
various organizations and disciplines throughout the company.
Some of the participants are themselves disabled or have
parents or children, spouses or relatives with some form of
disability.
We
approach these problems with the understanding that comes from
experience and with the
enthusiasm of
personal commitment. We also approach them from the viewpoint
that many of us, as we get older, will need many of the same
kinds of accommodations and devices that are important for
today’s disabled population.
Digital had
already made many efforts to help and accommodate people with
disabilities — including wheelchair access, availability of
translators in meetings, and access to special computer
terminal or telephone equipment. But these efforts were mostly
local, independent, fragmented and uncoordinated. We wanted to
get more organized in how we deal with major areas of concern
for the disabled. We wanted to determine what we could do
differently as a company to overcome limitations that we
unintentionally impose on these people and so we could better
tap into the contributions these people can make. Today, we
have the beginnings of an organized approach to dealing with
access to computer and communication equipment, access to
facilities, revisions to policies and general awareness.
There’s a lot more work to be done, but we’ve made a start.
A facilities
task force has completed an extensive survey of the major
facilities in the U.S., screening them in terms of physical
access criteria, such as doors, ramps, parking, elevators and
access to rest rooms. As a followup, they created guidelines
for local facilities managers. These include relatively simple
changes, such as raising a desk so a wheelchair can fit under
it, or permitting a blind person to bring a dog into the
building. They also include more complicated solutions,
requiring structural changes, such as providing toilet booths
that are wide enough to accommodate wheel chairs, and adding
ramps or elevators. The guidelines create a framework to help
facilities people as they make local decisions about the right
approach and timetable for their particular circumstances.
Another task
force, headed by Dave Brown, focuses on computer access for
people with disabilities. For the last three years, he has
been responsible for an engineering program that deals with
these questions.
Digital has an
Assistive Technology Access Center in Northboro, Mass., where
employees can try out recently developed devices. These
include products based on our DECtalk capability (which turns
ASCII text into normal voice), as well as third-party devices
such as alternative keyboards, terminals that show large text
on the screen, and voice input.
A
battery-powered version of DECtalk is used in Boston’s
Children’s Hospital. There, speech-impaired children, many of
whom have poor muscle control, use a stick held in the mouth
to activate a giant keyboard and the machine "speaks" out loud
for them.
Also, some
people at Digital, on their own, have been working on a
Braille output terminal with a Braille keyboard. Three women
in the Atlanta Customer Support Center who are visually
impaired now use this device to access information from the
network to answer customer questions.
Some of the devices being developed for
people with disabilities — such as voice input — could prove
very useful for a broader population — such as people who
never learned to type or find traditional keyboard techniques
awkward.
In focusing on
the needs of the disabled, we also become aware of some
not-so-obvious issues. For instance, Digital posts most of its
software documentation on the network. In the past, that was
done in simple ASCII form, which is readable by machines using
DECtalk and which can readily be printed in Braille. Now we’ve
begun posting such documentation in Postscript and other
formats, which, while they print out beautifully, are totally
inaccessible by people who are blind. Videotex also poses
problems.
Meanwhile, the
U.S. government has been addressing similar issues with the
Americans with Disabilities Act (ADA) and the regulations
emanating from that. The ADA is a comprehensive law that
creates new rights and extends current rights for the
estimated 43 million people in the U.S. with a "disability."
It was enacted on July 26, 1990, with the employment
provisions becoming effective on July 26, 1992.
This Act uses a
broad definition of "disability," including anything that
substantially interferes with one or more major life
activities. This includes blindness, deafness, and being in a
wheelchair. It also includes drug addiction, alcoholism, and
having the HIV (AIDS) virus. The law also protects people who
are perceived as having such a disability or who have a
history of having such a disability.
Under the law,
people must voluntarily identify themselves as "disabled" to
be known as such. In most cases, it’s illegal for a company to
ask its employees about disabilities or to keep statistics on
people who have not come forward. This means that we do not
and cannot know how many people in Digital are hearing
impaired or vision impaired, etc., anymore than we can know
the number of people with HIV virus.
The current use
of illegal drugs is not protected. A person who has a history
of being a drug addict and is not currently an active drug
user is protected. If somebody comes in drunk to work, even
though they may be under treatment, they can still be fired
for being drunk. But the law says that if someone has a
history of being an alcoholic, we can’t base our employment
decisions on that history.
The major
provisions of the ADA are consistent with what Digital is
already doing. The company must make reasonable accommodations
that do not create undue hardship, so that any qualified
person with a disability can perform the essential functions
of his or her job. These might include readers for the blind,
interpreters for the deaf, part-time work, modified work
schedules and other forms of job restructuring to permit
employees with disabilities to perform the essential parts of
jobs. Also, new facilities must be designed to be accessible
to persons with disabilities, including employees, customers
and suppliers.
There are some
differences from prior law, particularly relating to the use
of medical exams. These changes mean that we must train our
employment and management people carefully regarding the
types of questions they may ask and the use of the information
they obtain.
Basically, the
Act is one more incentive for Digital to get on with the
business of making the workplace more accessible for
employees, customers, and vendors, and to permit disabled
individuals to participate more fully in the business.
Digital’s
investments in component-level research and development
(R&D) result in an increasing flow of leading-edge
products. Much of this is base technology — hardware and
software that are fundamental building blocks necessary for
development of world-class systems and solutions. These basic
elements — software, networks, components, and computer
peripherals, such as terminals and disk drives- can be
profitably sold as separate, volume commodity products, in
addition to their use as parts of complete computer systems.
And Digital’s expertise in designing and building them can
also be sold for a profit.
Worldwide
competition and the high cost of research and development are
leading to increased interdependence among the major
manufacturers in the computer industry. Just as Digital buys
some of its components and makes others, so do many other
companies. In fact, many companies that compete with Digital
for systems business are potential customers for base
products, components and even manufacturing services. Also,
systems customers of Digital who are also manufacturers now
buy piece parts and components as well as systems, and even
ask us to do some of their manufacturing for them.
What we are
doing now in the components area resembles what we did in our
earliest days when we focused on building modules. We’re
focusing on our core competency as an engi-
neering/manufacturing company, both in hardware and software.
We’re building on our manufacturing strengths.
We can "private
label" some of our products for customers. For example, we
took the base design of our VT420 terminal and modified it to
meet Olivetti’s specifications, and now Olivetti is selling
that under their own label.
At the component
level, Digital’s thin-film heads are in very high demand right
now. This is an extremely high precision component for storage
devices. Digital uses these in making its own disk drives, and
sells them to other manufacturers, some of whom supply
disk drives to
us and to others. Currently, about 50% of our thin film head
volume goes to other disk drive manufacturers. In addition to
the margin that generates directly, the higher volume
significantly lowers the costs of these components used in our
own products.
We will do
custom manufacturing for other companies, including making
printed wiring boards and modules to customer specifications.
In some cases, the customer provides the materials, but we
prefer to do the material acquisition. We’re selling our
manufacturing capability -- taking advantage of the fact that
Digital is a world-class manufacturer and basically becoming
the manufacturing arm for these customers.
This kind of activity benefits Digital in
four ways:
o The sale itself is profitable.
o We reduce our manufacturing costs by
increasing volumes.
o We make full use of existing plants and
people.
o We get early feedback on our products
and their competitiveness.
This kind of
business forces us to be competitive in our basic operations.
It's also useful as a benchmarking activity, helping establish
internal pricing for the New Management System (NMS), since
the price charged to a business unit should equal what we
would charge a high-volume customer.
Digital’s
experience with OEM (Original Equipment Manufacturer)
relationships is an enormous advantage in this market. The
association with an OEM is different in style from the more
familiar end-user model. Planning on both a sales and a
technical level require a closer level of collaboration.
Reliable material supplies and smooth long-term scheduling are
very important. Also, rapidly changing technology requires
very close collaboration between design engineers from
supplier and customer. In other words, close working links
among sales, engineering and manufacturing organizations are
essential to success in this style of relationship with
customers.
We are working
with the three area managers to establish dedicated sales
teams. The Sales Managers are: Joe Kelly, US; Werner
Burckhardt, Europe; and Tom Coleman, GIA. In most cases, these
sales teams will be the account managers. For some of the
larger accounts that do a mix of business with Digital, the
dedicated sales person will manage this piece on behalf of the
overall account manager.
These sales
people need different kinds of business plans and measurements
and training because their customers are so different from
computer system customers. In particular, we need to keep cost
of sales and administration very low — less than 10% and.
preferably, close to 6% — so we can meet the Business Model
for this type of business.
This activity is an important element for
the future success of the company as a whole.
We need to be
able to sell profitably at all levels - from individual
components to systems to global networks.
This is a
perfect time to be launching this activity. Many companies are
rationalizing their business strategies, trying to optimize
their efforts by judiciously deciding which parts of their
business activity they need to do themselves and which they
should buy outside. We’re finding excellent receptivity to our
overtures. At the same time, Digital’s reputation for
excellence in manufacturing and engineering is very important
to this class of customers, many of whom know us very well.
The Components
Business Group is an Integration Business Unit (IBU). We’ve
been in operation for about six months now, and at this point
we’re going after over 110 different opportunities in 60
different companies.
In Systems
Integration (SI), we are developing a management tool to
collect cost and revenue information from many different
organizations to track profits by customer program. This
initiative is called Customer Program Reporting (CPR) and is
designed to meet the business and financial management needs
of Digital's rapid growing Systems Integration business. The
information CPR will make available is analogous to what the
New Management System (NMS) provides to Business Unit
managers.
Over the last
few years, Digital has vaulted to the forefront in Systems
Integration, one of the strongest areas of growth in the
computer industry. Digital is now consistently ranked as one
of the top five vendors in this area. This accomplishment has
been the result of significant changes in how we manage
customer programs. To achieve our goal of industry leadership,
we must continue to change, basing our decisions on better and
more timely information about the effort, expenses and revenue
related to individual programs.
Systems
Integration programs present unique management problems
because they regularly involve multiple Digital organizations
and can span several years. To meet these challenges, new
business practices and procedures are being developed, based
on our experiences in winning and delivering SI business.
Perhaps the most significant new practices are those requiring
everyone working on SI programs to account for their time by
program. This is more difficult than it may sound because
people may work on multiple projects simultaneously. Tracking
the various pieces of work and accounting for them by program
requires behavior modification — calling for new levels of
commitment from everyone involved in SI programs.
To track this information, CPR will
collect and compile program transactions from all U.S.
business systems. Program information can be collected as soon
as an opportunity is identified and then on through its bid,
win, delivery, and close. Information available via CPR will
be related to a program’s Work-Break-Down Structure (WBS),
Line of Business (LOB) and account portfolio. This information
will be used by program managers, senior management and
Finance to plan and manage the Systems Integration business.
Initially, CPR will focus on large
programs managed through the program management offices.
Functionality will then be introduced in stages, beginning
with the collection and reporting of effort, expense, and
revenue on a per program basis. Subsequent stages will support
forecasting, budgeting, portfolio summaries and variance
analysis. As the solution matures, it will be extended to
support smaller projects and activities.
Planned for implementation in the first
quarter of FY93, this solution is designed to support the
continued growth of the SI business on many fronts. Program
managers will have timely information on which to make
management decisions during delivery, and senior management
will have a clearer view of the dynamics of their portfolios.
Historical program information will be available for use as a
reference to improve decision making on which business
opportunities to pursue and how to price and position them for
the customer. This information should also make it easier
Digital to deliver SI solutions to our customers.
seltzer@seltzerbooks.com
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