Volume 2 Number 5
May 1983
Marketing Gets
New Organizational Focus
Related
Organization
Announcements
Manufacturing
And Related Organizational Changes
European
Field Operations Establishes New Management
U.S. Area Field
Service Aligns With Management Centers
New Focus For Low-End
Manufacturing
Role Of The PDP-11 In
The 1980s
Digital Moves To
Fortune 100 List
Business Week
Cover Story Presents A Tough Image Of Digital
"A major component of Digital's success int eh '80s
is its ability to have a competent, highly visible, and strong
marketing organization," said Ken Olsen, president, in a recent
announcment about the Marketing function. "To achieve this, we
have decidd to realign marketing into six market groups that will
report directly to me. These
market groups will plan the companyh's business in our key
markets. To help with
this process, I have asked Ed Kramer to be Corporate Vice
President of Marketing, reporting to me," said Ken.
The six marketing group managers are:
Rose Ann Giordano will be in charge of a new group
responsible for marketing large systems, which includes the Large
Computer Group;
Bob Hughes remains in charge of the Business and
Office Systems Group;
Bill Long, vice president, Technical Group, will be
in charge of the Laboratory Products, Educational Systems and
Medical Systems Groups;
Ward MacKenzie, vice president, OEM Group, continues
in charge of the OEM, Chips and Boards Groups;
Joel Schwartz, vice president, will be in charge of
marketing terminal and personal computers, and marketing computers
through distributors and resellers such as Computerland. (This
"resellers" market does not include Digital's Business Centers or
DEC Dealers.)
Peter Smith will be in charge of the newly formed
Computer Integrated Manufacturing (CIM) Group.
With the start of fiscal '84, the initial phase of
our Professional and Rainbow Personal Computer Programs will be
well established. Andy
Knowles, vice president, whose career at Digital has mainly
focused on many successful start-up operations -- including the
PDP=11 Program, the Components Group (the Timinals and LSI-11
Program) and the Small Systems Group (personal comptuers and
terminals) -- will move to Hudson to again become involve din the
development and marketing of Digital's next generation of
technolgies. He will
be a member of the Product Strategy and Maring/Sales Strategy
Committees.
Ed Kramer
will take a leadership role with the six marketing group to
ensure that each marketing group has a comprehensive,
succinct, and timely
message about Digital and its products and how the products
meet customer needs. "They must work collaboratively to make
certain the indiÂvidual marketing groups have a process in
place to clearly define the application and equipment needs of
their customers,6 explained Ken. He noted that Ed
and the six group managers must make certain the Marketing
function has a well-coordinated, integrated strategic plan,
and that stanÂdards, roles, measurements and career paths are
clearly defined and underÂstood .
"I want to
put fun and enthusiasm into marketing and collaborate with the
group managers about ways to help the function improve in
stature and professionalism," explained Ed.
"The new
organization is simply a tool to help Digital achieve its
goals of marketing excellence. We aren't just looking for a
simple message. We are looking for a winning marketing
strategy," said Ed. "We want to coordinate any strategies
targeted at the same customers so that we can optimize our
marketing efforts," he emphasized.
A couple of
marketing groups have been realigned to help eliminate
redundanÂcies in target audiences and to make better use of
the support staffs, which will now serve more than one market
group. The Computer Integrated ManufacÂturing (CIM) Group, for
example, is a combination of the Engineering Systems Group and
the Manufacturing, Distribution and Control Group. These
groups were combined because their markets have become more
closely aligned as automation and robotics have gained
popularity.
Engineering
responsibilities for the Engineering Systems (ESG) and the
Manufacturing, Distribution and Control (MDC) and UNIX
Engineering Groups will become part of a new group to be
called Engineering for Computer Integrated Manufacturing. The
group will be managed by Patrick Courtin, who will report to
Jack Smith and Gordon Bell. Patrick will be a member of the
Product Strategy Committee.
The
marketing responsibilities for ESG and MDC will become part of
the newly formed Computer Integrated Manufacturing market
group, to be managed by Peter Smith.
Roger Cady,
vice president, has taken a position doing consulting work on
manufacturing and engineering projects. He will report to Jack
Smith.
Two new
marketing groups, Artificial Intelligence Marketing and
CommunicaÂtions Marketing, are being formed. They will report
to Ed Kramer and be responsible for establishing Digital as a
leading supplier of products for applications related to the
two groups. Managers for the two groups will be named in the
near future. The Communications Industry (Bell and non Bell)
account-focused marketing efforts will continue as part of the
field organiÂzation .
Paul
Neuman, manager of Europe's
Manufacturing operation for the last four years and with
Digital for 15 years, will return to the States this summer to
become manager of the Traditional Product Line. He will report
to John Alexanderson.
Henry
Crouse, vice president, who has
been External Resources manager since 1975 and with the
company since 1959, will become manager of Europe's
Manufacturing operation. He will begin his new assignment this
summer, reporting to Bill Hanson and Jean-Claude
Peterschmidtt.
Abbott
Weiss will become
Manufacturing Business manager for the Mid-Atlantic and
Southern Area Management Center, Abbott, who was the Corporate
MateriÂals manager for the last 2-1/2 years and with Digital
for almost ten years, begins his new assignment immediately.
He will report to Harvey Weiss.
Bill
Thompson, vice
president, who has been Corporate Controller for the last five
years and with Digital for 12 years, will take responsibility
for both the External Resources and Corporate Materials
operations. He will begin to make the transition into his new
job immediately, but will make the final job switch after
year-end results have been reported and his successor is in
place. He will report to Jack Smith.
"European
Field Operations has reorganized to develop the most dynamic,
qualified and responsive Sales and Service Operation in the
European comÂputer industry," says Pier-Carlo Falotti, vice
president.
The new
European Field Operations is as follows:
Marketing, managed by Michel
Ferreboeuf, will ensure Europe has a coordinatÂed and coherent
set of products, applications, sales and marketing
stratÂegies. International Sales Office, managed by
Bobby Choonavala, will promote a professional company image
and expand business in large accounts and in existing and new
industry sectors. Small Systems Operation & ProÂductivity
Office, managed by Al Peters, will develop new ways to
sell Small Systems products cost-effectively, and a new sales
operation application portfolio for the future. Personal
Computer Office at Corporate, managed by Eli Lipcon,
will continue to report to Pier-Carlo and Joel Schwartz and
cover all European needs in Small Systems.
Support
Services, managed by Sergio
Giacoletto, will now support the Sales Operation, as well as
manage the Support Operations of Field Service and Software
Services. Software Services, managed by David Stone,
will continue to focus on strategic, marketing and operational
issues. Field Service and Installed Base Group,
managed by Don Zereski, will assist in expanding business
volume and improving customer satisfaction. Educational
Services, temporarily managed by Pier-Carlo, will play a
more important role in sales and marketing strategies and the
internal delivery of professional and quality training. Jamie
Muir has been appointed to manage the sales trainÂing and
personnel development effort.
Field
Operation Finance, managed by Werner
Oppliger, will manage the HardÂware Services, Field Service,
Software Services and Educational Services Finance groups and
support the team in achieving its financial and operaÂtional
goals. Finance and Administration, is managed by Bill
Helm. (This summer Bill will return to Corporate F&A and
Marty Ford will move from the States to manage the European
F&A operation.) Personnel, managed by Shel Davis,
vice president, will focus on employee relation programs to
ensure the continuation of a positive work environment.
UK, Ireland, and
the Middle East will continue to be managed by Darryl
Barbe; France by Claude Sournac; Italy by
Bruno D'Avanzo; and Germany by Willi Kister. As European
Country group manager, Geoff Shingles, vice president,
will manage all country operations except for those mentioned
above. He will share European Field Operations resources in
support of his operation.
In parallel
to the newly announced Area Management Centers which have
divided the seven U.S. regions into three areas, U.S. Area
Field Service has appointed three managers to develop and
execute revenue and service-delivery plans for their
respective geographic areas. In addition, they will represÂent
their areas on the Field Service Management Committee.
Bob Brooks
is Field Service manager of the Western/Central U.S. Area,
consisting of Western, Southwestern and Central Regions. Don
Leighton is Field Service manager of the Northeast U.S. Area,
consisting of the New York/New Jersey and Northeast Regions.
Rich Nortz is Field Service manager of the
Mid-Atlantic/Southern U.S. Area, consisting of the
Mid-Atlantic and Southern Regions.
Bob Lux and
Don Zereski will continue in their Field Service management
positions in GIA and Europe, respectively.
To establish
clearer linkages with Low-End Engineering, the Far East and
Europe, Terminals Manufacturing has reorganized as Low-End
Manufacturing with three Product groups—Videos, Printers and
Small Systems. Dick Esten will manage the group which will
also include a Low-End Business Center. Transition into the
new organization will be completed by the end of Q-l of FY !84.
"Management
of the Video, Printer and Small Systems businesses will
develop and implement worldwide manufacturing strategies which
deliver competitive products to our major international
markets. Clustering our products into three groups should help
us make decisions that reflect the uniqueness of various
markets. This includes determining the manufacturing capacity
needed in different parts of the world. U.S. manufacturing
plants in each of these Product groups will focus on meeting
U.S. customer needs. DepenÂding on market needs, their
charters will vary and might, on occassion, include taking on
non manufacturing work," explained Dick.
Managers of
the Video, Printer and Small Systems groups will be
responsible for developing Manufacturing business strategies
and interfacing with Engineering, Marketing, the Field and
other Manufacturing organizations.
Group
functional management will no longer exist since their work
will be done by the product group staffs. Instead, similar
work that requires a critical mass will be performed in one
Product group for the others on a shared basis.
"I believe
that this new structure will capture some of the
entrepreneurial excitement of the past while contributing to
changes required for success in a dynamic, competitive and
diverse market," explained Dick.
Effective
July 1, Bob Hopley will be the Printer Group product manager
with line responsibility for Phoenix. Bruce Anderson will be
the Videos Group Product manager with responsibility for
Albuquerque. Fred Forsyth will head the Small Systems Product
Group with line responsibility for Boston and Westfield. Dawn
Greeley will be the Low End Business Center manager conÂcerned
with products from all three groups. Dave Spratt will continue
as Controller of the group.
To assure a
smooth transition into the new organization, Mark Abbett will
head a team responsible for communications, planning and
implementation.
The PDP-11
family of computers, responsible for Digital's enormous growth
in the early and mid 1970s, still accounts for a large part of
the company's business. In a recent interview, Mike Gutman,
manager, PDP-11 Systems Development, talked about the
continuing importance of these products.
"The PDP-11
family of computers plays two major roles in the corporation.
At the lower end of the price/performance spectrum, they are
our most cost effective multi-user computer systems. They also
provide excellent realÂtime performance. We expect that small
PDP-lls, such as the MICRO/PDP-11, will be the mainstay of the
company in this cost-sensitive multi-user area.
"At the high
end, both existing products and products in development are
attuned to the needs of our present customers, who have made
large investÂments in products and applications based on
PDP-11 systems. These customers want to continue to capitalize
on their investments around PDP-lls. This upper end includes
the Jll chip set and new products that will be built around
it.
"About
300,000 PDP-lls are installed today. There's tremendous
inertia and opportunity in an installed base of that size.
Today these customers use both PDP-11 and VAX systems, and
they'll add more of each as their particÂular applications
require. When we introduce new products into what is now the
PDP-11 space, they will begin to migrate to those new
products. We'll provide customers with the tools and the
capabilities to make a smooth transition, but the change will
probably be slow, with demand for PDP-lls continuing for the
rest of the decade.
"Meanwhile,
we're making our PDP-11 products as cost-effective as
possible. In our new low-end computers, we've used subsets of
operating systems that were developed for larger systems (for
instance, MICRO/RSTS). The software requirements permit us to
use small inexpensive disks. And whenever posÂsible, we use
the same components as our personal computers to get savings
from high volume manufacturing."
Digital
moved from the 137th to the 95th largest U.S. industrial
corporation in sales revenue in the Fortune 500 listing for
1982. Digital ranked 69th in assets and 32nd in net income
according to the May 2, 1983 issue of Fortune.
The May 2,
1983, Business Week cover story was entitled, "A New
Strategy for the No. 2 In Computers; Will DEC'S Massive
Overhaul Pay Off?". The article presented some of Digital's
strengths and weaknesses as perceived by the author. It
focused on market and organizational changes which have been
taking place over the last several quarters and why these are
important.
It noted
that Ken Olsen's goal is: "a radical transformation of his
engiÂneering-oriented company into a tough, market-driven
competitor."
The article
credited Digital's management for beginning to institute
manageÂment changes before financial results portended
problems. It quotes Jack Shields as saying, "we knew we had to
cut costs, simplify, streamline, delegate, and establish short
communication lines inside and outside to be competitive."
Digital's strategy is described as making the
"current minicomputer products work together with its new desk-top
computers and office automation gear." In the article, Ken
Olsen explains that business people buying personal computers are
soon going to discover that they need to share files and want more
than one user on the system. "Under these circumstances, the
minicomputer becomes more important than ever. Our strategy emphasizes
the mini," says Ken.
Many topics were covered in the article, including
customer relations, the personal computer and office automation
markets, leadership and the internal organization of the company,
and Digital's marketing structure.