DEC, Digital Equipment Corporation, MGMT MEMO Volume 9 Number 8, August/September 1990

There are two ways we can improve profit. We can hold costs and raise revenue, or hold revenue and reduce costs. To make a dramatic change, we must work on both revenue and costs.

The combination of three efforts — increasing sales effectiveness, proper pricing of value added services to our customers and putting more people into direct sales positions — will increase revenue.

We are doing a number of things to make our Field people more effective and productive. The more we do to enable them to spend more time in front of the customer and less time dealing with red tape, the better our ability to increase revenues. We are streamlining order processing and administration, simplifying processes and procedures, terms and conditions, and providing improved tools to help our sales people. The focus is on the account structure. Account managers have been empowered to make decisions in real time with their customer base. We’ve been working on this for over a year now, and we’re making good progress. But more remains to be done, and we have to continue to work to make our account managers more responsive to customer requirements.

Pricing is key. We need to adjust our pricing to match changes in the nature of our business. We are becoming involved in a number of situations where we have to provide significant pre-sales services. Often, our sales people feel they require more technical resources to help convince the customer of the logic of our approach. Or a sales person has to request help from a support person because the customer needs help deciding what is needed as a solution and specifying the functionality. After we have provided that service, the customer often puts the project out for bid, to our competitors as well as to

us. Our technical support people are very expensive, and if we don’t take that pre-sales service into account when pricing the hardware and software then we are giving that service away. In other words, we have to understand the changing ways we’re dealing with customers and price accordingly.

Similarly, we have to price appropriately for our post-sales service when we take on very large projects, acting as a prime contractor. In these cases, we have to make sure our pricing is competitive, but at the same time we must take into account the extra responsibilities involved, including program management arid on-going technical support. We have to build those added responsibilities into our pricing algorithms.

We’re in a period of adjustment as we go into this new kind of business. We need to understand our costs better, and price to make sure that sales are profitable.

At the same time, we are "putting more feet on the street." This fiscal year we should have about 20% more sales people than we had last fiscal year.

On the cost side, we have to understand that the nature of our work has changed. Both technology and business practices are opening opportunities for consolidation and cost elimination. Many jobs, regardless of volume or growth, can be eliminated. In many areas, we are discovering that we can get the work done just as effectively or even more effectively with fewer people. This effort is company-wide and on-going, business-bybusiness and country-by-country.

This current downsizing effort doesn’t just reflect the present business downturn. The need to eliminate unnecessary jobs is due to changing technologies and business needs.

Overall, we currently have about $5 billion in people-related costs, including salaries and benefits. We also have $5 billion in costs that are not related to headcount and this category of cost must be reduced as well. Mick Prokopis has been recruited to work full time on that mission. He has targeted cost-saving opportunities in discretionary spending and is working with the operational units to introduce effective cost reductions.

We need to work on all these areas — increase revenue, decrease cost, and price for value-added service. Balance is important. We should not expect that we’re suddenly going to grow rapidly and all the cost-structure problems are going to go away magically. On the other hand, it would be a mistake to emphasize cost over revenue generation. We have to put equal energy on both. One is not going to solve the problems of the other.

Organizationally, we are no longer looking at the company as one huge monolith. Therefore, the people to whom we are entrusting the management of those business units can look at their slices of the company and make the decisions necessary to make their slices profitable. When you deal with 24 or more units across the company, you have flexibility to target opportunities and differentiate plans according to needs.

We should not expect these measures to have an instantaneous effect. There is a lot of institutionalization that has to happen to make the business units and the account structure effective. The whole company has to understand that we’ve changed the overall structure and the responsibilities of business units, geographies and functions. We have to make sure that our measuring systems augment each other and are not in conflict with each other. That takes time and energy.

We need to remember that profit is important to the company for three reasons: shareholders, customers and employees.

We have a responsibility to shareholders. They have invested in the company and expect a return on their investment.

At the same time, we have a responsibility to our customers. Many of them are involved in "mission-critical" applications. Computer systems are at the core of their business and, to a large degree, they are betting their company on their computer choices. They want to deal with companies of substance that will be around for many years and can be counted on to continue to invest heavily in technology — companies that will be able to offer the functionality that is required five years from now. They don’t want to deal with vendors who are unable to carry out their commitments. They look at profit as an index of a company’s stability and health.

Likewise, profitability is important to our employees. People want to work in a growing, profitable environment. They want to be proud of their company. If we don’t provide that environment for them, many will leave and the best will leave first. We must provide our people a profitable environment; our future depends on our people.

Future Profitability by Jim Osterhoff, vice president, Finance

Recently, the press has published comments suggesting that the profitability of Digital’s business will never return to historic levels. Those comments do not express a company position. In fact, the work we have done to benchmark Digital against other companies, in this and other industries, strongly suggests that objective levels of profitability (22% return on equity) should be achievable.

Our studies show that the profitability achieved by a company is primarily a function of its management and not its industry. Excellent companies in most industries produce 20% or better returns on equity, well above the average for their industries. To believe we can’t achieve our profit objective is to give up on achieving excellence.

I believe statements of opinion that predict lower future profitability can be damaging to us in financial markets. They also are contrary to the best interests of our shareholders, and harmful to employee morale. Everyone wants the good days of our past to return, for the company again to prosper, and for the rewards of that prosperity to be reflected in the price of Digital stock that many employees own.

As a company, we have excellence in many areas. There is no reason, other than our own management limitations, that we can’t achieve excellence in financial results as well.

The problems we face today are mostly of our own doing, and that, to me, is encouraging because it is within our own power, and not that of external factors, to work our way out of them.

Making Digital Competitive And Achieving Financial Excellence by Mick Prokopis

Mick Prokopis has been appointed to a new position that will focus on accomplishing major company cost and asset improvement objectives. In this capacity, Mick reports to Jack Smith, senior vice president, Operations, and Jim Osterhoff, vice president, Finance.

According to Jim, "The company’s recovery from its current low profit situation is dependent on two factors: restoring our ability to achieve the growth potential offered by our outstanding array of products and services, and eliminating unnecessary, productivity-limiting costs and business practices. Mick will ensure that the Finance organization plays a key role in improving the cost efficiency of the company."

The Finance organizations in Engineering and Manufacturing, previously reporting to Mick, will report to Dick Fishbum, along with the Finance organizations in Sales and Services. Dick also reports jointly to Jack Smith and Jim Osterhoff.

In the new Finance alignment, Bruce Ryan represents the overall corporation,

Dick Fishbum represents the Operating units, and George Chamberlain represents the Business Units. The other Finance Staff positions are unaffected by these changes.

In the following article, Mick explains what needs to be done to meet the company’s goals of financial excellence.

Digital must become much more competitive as a company. Our financial results are far out of line with our capabilities. This is a self-induced crisis. There are hundreds of millions of dollars to be saved without constraining a dollar’s worth of revenue growth. We need to demonstrate the resolve and the commitment to redirect Digital’s cost structure.

We have to restructure our thinking and our behavior; to take a fresh look at why we spend what we spend and what that means in terms of choices. For example, the company spends about $1 million a year for bottled drinking water. If you suggest that we might save money by doing away with that, people’s reactions are generally angry and indignant. But what would the reaction be if you put the decision in terms of whether to have bottled water or 20 more engineers, or if keeping bottled water meant the elimination of 20 more jobs?

Also, consider the choice of flying coach instead of business class. Flying coach is a lot easier than having to sit across the table from someone and saying — I don’t have work for you. We have 1.2 phones per person in the U.S. Is that really necessary? Wouldn’t one per person be enough?

Before downsizing began, we already had about 5000 vacant offices just in the Greater Maynard area. Each of those empty offices has furniture, supplies, phones, and equipment. I would submit that emptying the furniture and equipment from those offices and selling what isn’t needed would be a test of our resolve. The next step would be to consolidate and eliminate buildings. Yes, the empty offices are scattered geographically and in different organizations. But we can’t afford to let organizational barriers stand in the way of efficiency.

"Overhead creep" is an insidious and major problem in this company. We have a situation where on the upside, with the multi-dimensional way in which we manage ourselves, many people feel good about winning. On the downside, we have equal unaccountability across all these various elements.

Overhead creep is sometimes a matter of entitlement. Some managers believe they must have their own building, their own Finance, Personnel, Information Systems and Purchasing people and so on. They feel they’re entitled to have those kinds of support inside their own organization, even though it could be provided by one of their neighbors.

If the company is competitive, you have a certain latitude of choice in how you run the business. If it is not, the choices are fewer. That’s what we’re facing today. We have to change our thinking and behavior, before the alternatives become far less pleasant.

In trying to improve the company’s financial position, we need to pay more attention to the assets we use — the chair we sit in, the personal computer or workstation we use, inventory, receivables, property, plant, equipment, investments in other companies, etc. When we talk about "downsizing," too often all we talk about is people. We don’t talk about these non-human assets and the ways we can achieve our goal of financial excellence by using them more effectively, or using less of them.

We measure our performance as users of our assets in "asset turns." This number is derived by dividing our total revenue by the average value of our assets. Last year we turned our assets about 1.3 times. To put this into perspective, if we had had the same operating performance in FY90 as we did, but we cranked our assets one more turn, we would reduce our investment in the company by $5 billion, and that would have a substantial impact on our returns. If we turn our assets one more time, customers would want our help to try to do the same for them — further increasing our revenue.

Our asset performance depends on a number of interdependent factors, such as inventory (also measured in "turns"), how promptly our customers pay us (measured in "days sales outstanding"), and property, plant and equipment. We finished FY90 with inventory turns at 4.3. Some years back, when we were at 2 inventory turns, we set ourselves a goal of 4. With a lot of hard work we achieved that vision of excellence, and we continue to improve our performance in that area by a few tenths of a turn per year. Now what we previously defined as "excellence" simply isn’t good enough. We need to set a new, outrageous goal, such as 10 turns, and achieve it.

We always point to our inventory turns as an area where we’re doing good things and making continual progress. Because of that, I have the nerve to say that we can do twice as well. It is because we’re excellent in this area that we can make an additional improvement.

Basically, inventory is a substitute for good information. We need to wed our technology with our culture, and find the necessary solutions. That is our competitive advantage both in the marketplace and in improving our internal operations.

Meanwhile the effort to improve our "days sales outstanding" (DSO) has been an uphill battle because, as increasingly more of our business is outside the U.S., that number naturally creeps upward. But if we apply the same type of rigor that we have in inventories, we can make significant progress here. It is important for the plant manager and his/her equivalent to understand how many "days" he or she influences in this equation. Likewise, it is important for people running distribution operations to understand how many days they influence, and service people who install systems at customer sites, and so on along the line. They all make a difference individually, and by operating as a team, with this as a focus, they can make an even greater difference in this important part of our financial performance. We should strive to quantitively improve our DSO.

Investors - including our employees, most of whom own stock in the company - invest for a return on their money. And it is reasonable to expect that significant improvements in our asset performance and, hence, in the company’s profitability, should be reflected in the stock price.

In FY90, we spent about $2.4 billion in transfer costs — all the material, labor and overhead that go into the product. We spent $10 billion on everything else, about half for people and half for other expenses.

To achieve our goal of financial excellence, we need to redirect the cost structure of the company by about $1 billion over the next six to twelve months. That represents 8% of our total spending last year. It amounts to $3 million a day or $8,000 per employee per year.

Senior management has made a commitment to achieving this level of excellence. That’s why they created my job — so I could act as a catalyst to help make this happen.

We’re on a quest to make better use of our assets and to break the curve on our spending habits. Now is the time to make it happen.

Travel Cost Savings (Jack Smith, senior vice president, Operations, recently sent throughout the company the following memo regarding travel costs.)

Expenses incurred during business travel represent a $500 Million cost to Digital. We must ensure that an investment of this magnitude yields the maximum potential benefit for the Company. I need your help. Fewer trips, shorter trips and fewer travelers are the most direct way. All scheduled travel should be reviewed in light of its impact on profit. Any travel deemed unnecessary should be terminated.

Given our commitment to return this Company to appropriate levels of profitability, we must take an aggressive approach to reducing travel costs.

To that end, following are travel cost reduction opportunities with which we must all comply immediately: o Eliminate unnecessary travel, o Don’t send multiples when one will do.

o No travel to GIA/Europe without Operations/Executive Committee sponsorship, o Use travel agents under contract for all business travel needs, o Plan and book trips earlier (aim for 14-21 days in advance).

o Fly the lowest logical fare; frequent flier and other promotional programs are costing us $6 million per year in the U.S.

o Travel Coach Class to and from Europe and all other trips less than eight (8) hours duration.

o Use Avis and National car rentals for lowest DEC rate - stay at Digital approved hotels.

Adhering to the above will save us over $25 million in the U.S. alone. In addition, a 10% reduction in the number of trips taken will yield another $50 million in savings without having an adverse impact on our customers or our products.

As indicated, the savings shown above are U.S. only. GIA and Europe should comply with the 8 hour coach rule, and develop programs similar to those for the U.S.

Travel will provide you with monthly information on the extent of your organization’s compliance with the commitments outlined above.

If you have information indicating that we are not getting the lowest rates, contact ALL-IN-1 account AMEX CS @ NRO.

Improving The Cost Structure Bv Changing The Way We Do Work by Roberta Bernstein, corporate staff, Strategic Resources

Many of the efforts now under way to improve the company’s cost structure are being driven by support organizations in the Strategic Resource Group, such as Administration, Purchasing, Waste Management and Information Management and Technology (IM&T).

Over two years ago, a task force studied what should happen to support functions as the company grows. They concluded that to a large extent, growth does not impact these functions. For instance, you may need to buy more or fewer light bulbs, but the quantity should not effect the number of people needed to make such purchases. They also concluded that many administrative support functions are interdependent and that, by working together and consolidating operations, large sums could be saved.

We set out to analyze our work and determine how we could change our organization to do it more efficiently and effectively. The role of corporate functions should be to establish strategy and standards, to measure people, to audit programs, and to consult and troubleshoot. But we found that close to 80% of our activities was "operations."

We segmented our work into three categories — operational, strategic and "one-place" work - and determine where it should be done. We decided that operational work belongs in the line organizations, where the real responsibility is, rather than managed centrally from afar. Strategic work belongs at corporate, and one-place work belongs at the place where the expertise is.

For instance, a number of people in Environmental Health and Safety (EH&S) deal with reporting and compliance issues. That aspect of the work should happen at the plant level, and the people at corporate should be responsible for laying out strategy and standards, providing tools and education, and measuring progress. Corporate indicates how the work can and should be done, but the work itself is done at a local level.

Similarly, much of Purchasing is operational and can be managed in the line operations. But issues relating to the company’s overall strategy — such as global sourcing, strategic partners and preferred vendor list — belong at the corporate level. There are strategies that need to be laid out to achieve long-term goals, because almost everything we buy, we buy on a large scale.

"One-place work" refers to work that requires special expertise and needs to be located only in one place in the company. For instance, the company only needs one toxicologist. You don’t need one at every site. And where that person sits is irrelevant so long as everyone who needs that expertise knows how to reach him or her. Aviation is another example of one-place work. We only need one aviation service in the U.S. We do not need to distribute it to various locations and organizations.

Strategic work should never be redundant. Operational work by its very nature is. So how we define and align the work is important. The categories help us to make difficult organizational decisions.

For example, Purchasing, Administration, etc., all used to have their own separate IS organizations. Now a single IS organization handles all of the Strategic Resource Group. This approach eliminates redundancy and allows for sharing. As a result the same work could be done more effectively with fewer people — freeing systems and software experts for jobs in other parts of the company, where they were sorely needed. Similarly, the activities of Administration, which includes a variety of activities such as facilities, real estate and travel, were widely distributed and involved a lot of redundancy. The enormity of the problem/opportunity was not clear because, historically, it has been difficult to capture and consolidate these costs. Most of them are broken down on a cost-center by cost-center basis. Categorizing work as strategic, operational or one- place was an important step in determining how the work could be done more efficiently, and in breaking down our habits and presumptions.

There has been a major mind-set change. A manager’s authority used to be measured by how many people there were in the organization - the more bodies the better. But for the last few years, managers have been focusing on paring down their organizations, trying to arrive at greater efficiency and probably greater influence with fewer and fewer people. They’ve been focusing on working smarter — looking at aspects of their work that previously received little attention.

This approach led to a strategic plan which identified programs that have the potential to fundamentally change the company’s cost structure.

(The following articles detail such efforts in Purchasing and IS.)

Acquisition Business Centers And Other Cost-Cutting Efforts In Purchasing by Ron Payne, Corporate Purchasing Vice President and Murvin Lackey, Corporate Purchasing Manager

We have to recognize that there is a limit to how fast our industry will grow over the next four or five years. For us to be competitive, we must have a supply base and an acquisition process that provides us with an advantage in the marketplace — that is price-competitive and that enables us to reduce the cost of acquisition and inventory. We also must have a correct-sized infrastructure of purchasing professionals and suppliers. And we must to make it easy for people to order and receive the goods and services required to run their businesses.

Wherever possible we’re consolidating common and shared work. We are packaging this work in a way that the company obtains the most cost-effective buy, and we want to leverage off the combined purchases of users at different sites across the company. For example, in the Greater Maynard Area we spend over $600,000 a year on the major electrical components which keep the buildings operating. In the past, we had buyers in many remote sites buying the same goods from different suppliers. We were able to consolidate those procurements from eighty suppliers to one supplier. In the process, we were able to save the company about 20% in price reductions, and we reduced the internal costs involved in ordering and receiving these items.

Currently in the company, we have over 7000 active suppliers. We believe, based on benchmarking best in class, we should have about 1000 suppliers and expect to get to that number over the next two years. This will lead to improved efficiencies and will reduce the cost of acquisition. It will help us drive some key programs to ensure quality at the source of supply. We believe that in the next 12 to 18 months these efficiencies will lead to additional annual savings of between $90 and $130 million.

Four years ago, just in the Maynard/Marlboro/Merrimack area, Digital had about 42 sites, each with its own independent Purchasing organization. It wasn’t clear what the appropriate number of purchasing sites should be, but it was clear that 42 were too many. So our Corporate Purchasing Management Committee set out to make changes. In looking at how we could improve and get more productive in our acquisition spending, we decided to handle common commodities in a single place.

Most administrative purchasing activity looks the same. Whether or not it is for Manufacturing, Engineering, Sales, Service or Marketing doesn’t matter; a desk is a desk, and paper is paper, therefore, we decided to consolidate into one center of activity the administrative purchasing requirements for the headquarters area and the entire northeastern U.S. This Acquisition Business Center (ABC) recently started operations in Littleton, Massachusetts. There is a plan for another ABC in Phoenix, Arizona, which will service the needs of the western states.

Orders will be generated electronically, which means it doesn’t really matter where the order originates. For instance, if we had stationery suppliers in 12 regions in the country, we could effectively manage the transactions out of two centers.

We were also concerned about our responsiveness and our ability to satisfy our internal customers. Our process was burdened with paper. The user fills out a requisition, sends it through the mail to a purchasing department which, in many instances, is in a different building. The information then has to be translated into a purchase order, which generates more paper, which goes out to the supplier. The supplier, in filling the order, generates more paperwork that comes with the shipment to our receiving dock, where it generates more paper. Later the supplier will send us an invoice, which generates even more paper. We wanted to streamline our acquisition process and eliminate this unnecessary paper-related effort.

Essentially everyone in Digital who might need to order administrative supplies already has a terminal that could serve like the automated teller machines (ATMs) now common in banks. We now have figured out how to make that terminal a usable device from a purchasing perspective.

The process in its simplest form: professional purchasing people in the company will write contracts for the goods and services we want, and the individual user will be be able to use his or her terminal to place orders directly with the supplier. For example, in stationery supplies, a commodity manager will write a contract with a local supplier.

That contract, together with a list of all the supplies that are available, will appear on the terminal screen. Instead of completing a requisition, the people who need the supplies will use their terminals to indicate that they want writing pads or easel charts, pens, electrical components, janitorial supplies or MRO type supplies. The system will provide the part numbers and indicate the prices. The user will then make the decision and the request for the contracted items will go directly to the supplier. No requisition will be cut, and there will be no reason for Purchasing to be in the loop because the terms, pricing, deliveries, etc., have all been predetermined.

We are piloting that approach now at our Littleton ABC, and we will be moving that entire process toward electronic data interchange (EDI), adopting the industry standards that are necessary when connecting to a variety of non-Digital computers at the sites of our suppliers.

As part of a pilot, we have already brought about a dozen suppliers up on EDI, and are selectively sending them electronic purchase orders. We expect that by the end of FY92 over 80% of our purchases will be handled electronically. In the elimination of paper processes, we are starting with the purchase order and change orders; but, over time, both the invoicing and the subsequent payment will be done by electronic funds transfers. These stage of the process are being prototyped as we write this update.

In addition to reducing paperwork, this also reduces the need for inventory. In administrative buying, we have to work the just-in-time principles that are being developed and used in Manufacturing. We have a lot of administrative (expense) inventory in several locations throughout the company. This represents money that Digital has spent in advance of the need to spend that cash. If people have confidence that they can get the administrative (expense) supplies that they need promptly, they won’t feel the need to keep a personal supply on hand or in expense stockrooms. Added up across the company, the savings could be in the millions of dollars.

The ABCs are one of the ways that we will do "one-place" work. Purchasing that needs to be done in individual plants and sites stays where it is. But in cases where there is common and shared work that is done in many plants and sites, our strategy is to ask the plant or site that is the major user of those goods and services to do the purchasing work for all of them. So if one plant buys more "widgets" than the others, that plant might be the widget commodity manager and that becomes "one-place" work. We will flow in the requirements from everyone else to that one place. They will negotiate leveraged deals with the suppliers, and the other plants will order directly against those contracts using EDI.

Purchasing organizations in Europe and GIA are considering taking a similar approach, probably on a country-by-country basis. These changes in how we do the work of Purchasing will have a significant effect on inventory and, hence, on the company’s overall financial results. We estimate that combined with other efforts to improve manufacturing flow, Digital should be able to go from the present level of 4.3 inventory turns per year to 8 or more turns within about two years.

One of the major enablers to this change is application technology. The materials system — MAXCIM — is an important element in utilizing EDI and achieving these results. MAXCIM was originally developed to operate in a decentralized environment, with purchasing taking place at many different plants and sites throughout the company. To get to the point of implementing EDI with a common and shared supply base, we have to make sure all the plants are using the same version of the system in the same configuration. That way we can use a single gateway and a single interface and present one face to our suppliers as we continue to introduce EDI.

That is a major philosophical change in the way we operate with MAXCIM. We are now working with our IS organization to set guidelines for this change, which should take place over the next fiscal year. It is critical that when we implement EDI with a major supplier, we do so once for the entire corporation, rather than duplicating the development effort from site to site and nlant to nlant

Meanwhile our IS people in Chelmsford, Mass., are building an Integrated Purchasing Acquisition system (IPA) to run in conjunction with MAXCIM. This is a front-end purchasing system that allows the end users to log in, call an external supplier, see the pre-negotiated contract with that supplier, and buy what they want against it. The first version of that system is now being piloted at the new Littleton ABC.

We believe that our strategy will allow us to show tremendous gains in productivity among purchasing professionals. We are striving to automate the transaction process as much as possible, so the users become the implemented directly to the supply base. Then the purchasing professionals will be able to focus on the value-added work of supply-base intelligence and major contract negotiations. Thus, really delivering to the company a competitive edge.

Cost-Savings From A ‘Common VMS Operating Environment’ by Mike Connor, Manager, Corporate Information Services

One major cost-saving effort depends on a cultural change — emphasizing the value and importance of standardized ways of doing things and, in particular, a Common VMS operating environment for data centers.

The VMS operating system is very versatile and can be tailored by the system manager and the individual user to meet a variety of needs. In addition, each new release and version of a layered product changes the operating environment. As a result, over time, data centers around Digital all developed their own unique ways of doing things.

This penchant for uniqueness led to problems: a few years ago when a new application was released to data centers in the U.S. Field, it would typically work in one or two data centers and fail in seven. Then the application development team would fly to Chicago, figure out what was wrong and fix it there; fly to Texas and fix it there; and so on. In all, it would take about three months to get a significant application to run. This happened because the application developers made assumptions, for instance, about which layered products would be in place and in which versions, and every one of the data centers had a totally different environment.

Also, electronic mail, which is the most used application in the company, was viewed as a low priority not managed in a consistent and standard manner. To elevate mail to become a true production application, we needed to create a standardized environment to ensure timely delivery of business communication throughout the U.S.

As we strove to create this common environment, we faced resistance from people who felt it was important to have the freedom to take advantage of the full flexibility of the VMS operating system. But to run a business and optimize performance over a huge network, we have to tune the environment to meet the requirements of the business.

To define the concept of a common VMS environment, Jim Regan, manager of System Engineering, assembled a group of application developers as a committee. They decided which layered products in which versions are needed in a standardized environment. This was a lengthy process which required lots of negotiation. It was complicated by the fact that not all applications were up to the latest revision of the layered products. The effort also involved negotiation with the data centers, which were used to operating with no dictates and did not want to lose any of their responsibility or freedom of action.

After two years, the Common VMS environment was institutionalized in the Field, with the establishment of common environments for mail, production, development, and the mail transport system (MTS). As a result:

o application developers had a target environment to design for;

o any single data center could serve as a reliable test site for a new piece of software or new application;

o if it didn’t work in that environment, application developers knew there was a serious problem with the software and not with the operating environment; and

o it now took an average of one or two days to get an application up and running rather than three months.

We also found that with a standard operating environment, the job of system manager did not require as high a level of expertise. Highly skilled people could concentrate on more critical things and not have to worry about loading software.

In addition, a lot of time and trouble was saved in cases of security problems when, because of penetration of our systems, we need to reload our software. Instead of the delays involved in having to figure out what software is required to rebuild the penetrated system, the entire Common VMS operating environment is specified on a single CD ROM and can be reloaded quickly.

All together, we discovered that it was seven times less expensive to system manage a VAX with the Common VMS environment than with a non-standard environment.

After this approach was institutionalized in the U.S. Field data centers and U.S. Field development, Sergio Giacolleto (then head of European Information Systems and now vice president of Enterprise Integration Services for Europe) implemented the EASE Program in Europe, and went a step further, using the same approach for application code as well.

Many other functions continue to operate in the traditional non-standard mode. It takes a selling effort to demonstrate the advantages of conforming to a standard when people are accustomed to a wider degree of freedom and flexibility.

Customers are very interested in this approach to data center management, because they too run distributed, decentralized operations and face the same problems that we do. The process is what they are interested in - getting people to understand that you can in fact standardize and establish a common environment.

In helping Digital become a more efficient and effective organization, IS management has recognized that standardization is essential. Currently Common VMS is one approach to standardization, creating a rich operating environment of over 70 software products saving our data centers time, money and effort.

Selling And Supporting UNIX* Together by Pier Carlo Falotti, President & CEO, Digital Europe

Change means doing things differently and doing new things. It means taking chances and adjusting routines that have become comfortable and safe. It means letting go of old ideas that are well understood and accepted. Most people fear change.

On April 3, we announced our next generation of RISC-based UNIX systems. To understand the importance of that announcement, we need to see it in context of Digital’s history.

Back in the 1970s, we sold a variety of systems, but the PDP-11 family was our most successful set of products. It played a key role in helping Digital to grow to $1 billion in sales. We were comfortable. But near the end of the 1970s, we introduced the VAX-11/780 system and, all of a sudden, we had to think and act differently.

During the 1980s, VAX/VMS products set a standard for the industry that no other computer company in the world has come close to matching. VAX and VMS products were the catalyst that pushed our company over the $10 billion mark. However, near the end of the 1980s, another major change occurred. The operative word now is "open" and, right or wrong, the perception in today’s market is that "open" is synonymous with UNIX.

In the 1990s, our challenge is to respond to change with the same aggressive enthusiasm that we did in the 1980s. Our challenge now is to transform Digital into the market leader

Unlike the two previous decades, when the impetus for change came from technologies that Digital developed, change today is being driven by a vendor’s ability to provide an open, multi-vendor environment based on industry standards and open systems specifications.

Digital has taken, and will continue to take, whatever steps are necessary for our long term success in the open systems market. However, our initial focus is on UNIX, which is a strategic operating system for Digital’s long-term growth and profitability.

We have a number of key programs under way that will enable us to become a leader in the UNIX market:

o We introduced a UNIX-based client/server family of products based on RISC technology over a year ago. Since then we continue to match or exceed our competitors in price and performance.

o We have invested heavily in UNIX and OSF/Motif applications and currently we have more OSF/Motif-based applications than any other vendor.

o Porting centers are vital resources that we can provide for application developers to help get applications onto our platforms quickly. We have made heavy investments in these centers and believe we offer more of them than any of our competitors.

o We have created a European UNIX DCC (Digital Competence Center), managed and staffed by some of our most competent marketing managers and our most knowledgeable UNIX sales specialists. They will be responsible for driving our UNIX sales effort and supporting sales people in the Field. In the U.S., Digital has five ULTRIX Resource Centers (soon to be expanded to nine), which play a similar role. And GIA is planning for an ULTRIX DCC in Japan.

The press and consultants often write that Digital has a problem positioning VMS and ULTRIX software for our customer base. Here is a useful approach for handling customer questions of this kind:

o First, we don’t need to start the discussion with customers by talking about operating systems. Listen to their business problem. We can’t propose a solution until we understand what they are trying to accomplish. We are in a unique position because we can offer a choice of environments supported by a single architecture, Network Application Support (NAS). None of our competitors can do that.

o In general, we should recommend VMS software when the competition is offering another value-added operating system, and we should compete with ULTRIX software when the competition is offering UNIX. Our UNIX-based competitors like to put us in a defensive position by forcing us to compare UNIX to VMS. That’s the wrong comparison. Don’t fall into that trap.

o Above all, listen to what the customer wants, and sell what the customer wants. We can offer the best value-added operating system on the market today (VMS), or we can offer one of the best implementations of UNIX on the market today (ULTRIX).

Whichever choice your customer makes. Digital is behind you 100%. We will do everything we can to give you the products, the environments, the solutions and the services to make you and your customer successful.

*UNIX is a trademark of American Telephone and Telegraph Company.

Common Definitions For Population Reporting

The Common Data/Population Reporting project was developed to improve accuracy and consistency in reporting Digital’s population, while reducing the resources and time required to collect and report population information.

Currently, there are multiple definitions and sources of regular employee and non-regular worker data, and multiple systems (some automated, some manual) are used for collecting and reporting population data. For example, U.S. regular employees are counted through the Employee Master File. However, a report on contract workers might be done through several systems or manually, by telephone. This causes data inaccuracies, and time is spent on reconciliation rather than on using the data for decisions. Many resources are needed to integrate the data, and the process is costly.

The objectives of this project are:

o to develop and implement, worldwide, a single set of clear and concise population reporting definitions and procedures to meet current and future reporting requirements;

o to use the same description of the organization for aggregating data for population reporting by Personnel and Finance, and to allow flexibility in anticipation of future needs due to organizational change;

o to improve data accuracy by utilizing approved source databases as the only source of data;

o to improve access to worldwide population data by making the data available electronically; and,

o to ensure data security.

Scheduled for implementation in Q1 FY91, the first phase of the project includes: o worldwide common definitions and counting algorithms, o monthly reporting capability worldwide,

weekly reporting capability in the U.S.,

o identification of "official" source systems for population data,

o agreement with Finance on top level aggregations,

o collection of population data with limited access, and

o true resource (equivalency) reporting which supports management measurement.

Each geography is making the necessary changes in their processes and systems based on their project schedules:

o GIA — implementation of Management Reporting System (MRS),

o U.S. - implementation of the Automated Temporary Employment System (ATES) - U.S.-wide o Europe Manufacturing — implementation of Manpower Reporting System (MRS), o Corporate Finance — collection of Work Performed codes for all cost centers, and o Corporate Personnel — development of a worldwide population reporting application.

This is an evolutionary process. Future phases will include:

o broader access to population data,

o "official" source system in use in GIA Manufacturing and Engineering with weekly reporting capability,

o aggregation structure to support worldwide reporting and to support lower level reporting in the U.S.,

o transfers in and out,

o detail data for non-regular workers worldwide,

o other population reporting needs (RSOP, Workforce Planning), and

o complete automation.

Digital To Provide Incentives For More U.S. Employees To Leave

Effective September 4, Digital is introducing a Transition Financial Support Option (TFSO) package for the U.S., with the initial implementation expected in September. The plan is to complete the U.S. portion of the company’s downsizing work as soon as practical.

This is part of a company-wide downsizing effort, which depends upon business workplans to identify jobs that need to be eliminated during Digital’s restructuring process. All decisions are being made on a business-by-business basis, and they will need to be approved by Digital’s Cross-Organization Transition Committee. Any jobs identified will come from organizational consolidations, work that no longer needs to be done, overstaffing, etc. With the overall effort, the company plans to bring the total population into better alignment with workplace requirements.

In July, Digital posted its first loss despite months of hard work to cut costs, including a TFSO package that was accepted by about 3,000 employees. This continued downsizing effort has been caused by a business downturn and our increasing need to be more competitive.

The fourth quarter loss resulted from the company’s decision to set aside $400 million for "restructuring" charges. This money will be used primarily to help offset the costs of eliminating unnecessary jobs, retraining and redeploying employees, and consolidating some facilities.

Everyone affected by this program will be given up to four weeks to decide whether or not to accept the financial bridge or to find a new job within the company. If a job match has not been made in four weeks, those who choose to remain with Digital will be subject to temporary assignments and to any other changes in the transition program, as business conditions dictate.

The new program uses the same elements as the first TFSO, including a financial bridge based on years of service and the continuation of benefits for one year. The lump-sum financial bridge, which is different from that of the first TFSO, will be based on the following:

0-2 years of service — 13 weeks pay

3 - 10 years of service - 13 weeks of pay, plus 3 weeks pay for every year of service between 3 and 10 years

11-20 years of service — 37 weeks of pay, plus 4 weeks of pay for every year of service between 11 and 20 years

77 weeks of pay will be the maximum financial bridge available

In addition, the employees who are offered and accept the package will be able to maintain their medical, dental and life insurance coverage for one year. Formal outplacement assistance will also be available and, where applicable, five-year acceleration of any restricted stock options will be available.

"Our basic goal continues to be to offer a voluntary package to help impacted employees bridge to their next career or life goals," explains Jack Smith, senior vice president of Operations.

"There are many areas in which we are trying to cut expenses. Almost every cost center across the company has developed significantly reduced budgets for FY91. Plus, we are looking at more ways to reduce discretionary spending. The people part of the plan does not represent the entire formula, although it is the most visible and most difficult of

"The continued commitment from all managers and employees is critical for our success. We need everyone to take the initiative to reduce costs wherever they see them."

More information and details about the program will be communicated to affected employees.

Shareholders Asked To Approve ‘Digital Equity Plan’

This year’s proxy statement, which will be sent to Digital shareholders in September, will describe a new stock-related compensation plan to replace the 1985 Restricted Stock Option Plan which expires this year. The new plan, known as the "Digital 1990 Equity Plan", is designed to give the company, with approval of the Board of Directors, a variety of alternatives for rewarding and recognizing key employees within the company. Shares authorized to be used under the new plan, until it expires on December 31, 1995, include about 5 million shares carried over from the 1985 Plan plus additional shares up to a maximum of 1.5% of the Company’s total issued shares as of the beginning of each fiscal year.

The plan’s breadth gives the Board the latitude to implement several stock-related alternatives. This flexibility is increasingly important in order for the company to provide the right kinds of incentives and rewards to accomplish key business objectives and also to respond to the frequent changes in laws and regulations of the many countries in which Digital does business. Some of the new stock-related compensation vehicles permit the company to use fewer shares in its compensation programs, resulting in less dilution of earnings per share.

The Digital 1990 Equity Plan will become effective upon approval by the shareholders at the November 1, 1990 shareholders meeting in Boston, Mass. Once the new plan is effective, the Board will have the authority to decide which stock-related awards will actually be used for which purpose and when.

The 1985 Restricted Stock Option Plan permits the use of non-qualified stock options, while the 1990 Equity Plan includes the following stock compensation tools described below: Non-qualified Stock Options, Stock Appreciation Rights, Restricted Stock Grants, Unrestricted Stock Grants, Stock Unit Awards and Incentive Stock Options.

Non-Qualified Stock Option - entitles the recipient to purchase stock at a specified price over a specified period of time.

Stock Appreciation Right - entitles the recipient, upon exercise of the right, to receive, in cash or stock or a combination of both, an amount determined by the appreciation of the company’s stock over a certain period of time.

Restricted Stock Grant - entitles the recipient to acquire shares of restricted stock subject to forfeiture unless certain conditions (such as continued employment) are met.

Unrestricted Stock Grant - entitles the recipient to acquire shares of stock free of any restrictions against disposition or obligation of resale to the company.

Stock Unit Award - entitles the recipient to receive, without payment, stock units ("phantom" shares of stock) valued at the Board’s discretion with reference to the fair market value of the company’s common stock.

Incentive Stock Option - entitles the recipient, upon vesting of the option, to purchase stock at a specified price for a specified period of time, and if certain applicable provisions of the U.S. Internal Revenue Code are met, the option may qualify for favorable tax treatment.

Bill Strecker Named Vice President Of Engineering

As Digital implements the Business Unit Organizations aimed at improving our overall responsiveness, most of Digital’s Central Engineering organization becomes part of these individual Units. While making this change, we want to retain the most important advantages of a centralized structure: Engineering and product excellence, and the high level of product interoperability resulting from a common strategy and architecture.

To assure these advantages in the new organization, Bill Strecker has been named Vice President of Engineering, reporting to Jack Smith, senior vice president, Operations.

Bill is now a member of the Executive Committee, to ensure that technical excellence and technical strategy is part of corporate decision making. Bill is responsible for the necessary functions and processes to ensure continued engineering and product excellence. This includes common strategies for technology, architecture, products and product development.

Bill joined Digital in 1972 as a member of the Corporate Research and Development group, where his work on cache memories led to the development of the PDP-11/70 system. He led the development of Digital’s VAX architecture and helped to define the company’s Interconnect strategy. Bill also played a major role in the development of the Computer Interconnect (Cl) and the Systems Communications Architecture, which are major elements of VAXcluster systems.

After holding a series of engineering and management positions, Bill became manager of Engineering Product Strategy and Architecture in 1984. He was named vice president, Product Strategy and Architecture in 1985. He was subsequently named vice president, Distributed Software Systems in 1989.

In 1985, Bill received the prestigious W. W. McDowell Award presented by the IEEE Computer Society. In 1987, he was elected to the National Academy of Engineering. Bill holds a number of patents on central processors, computer interconnects and networking and is the author of numerous technical publications.

Office Of Engineering Organized

A new Office of Engineering has been created in the worldwide engineering organization. It reports to Bill Strecker, vice president of Engineering.

The Office will provide a focal point for planning and information systems, strategy development and communication, evolution of the engineering development and product management processes, and human resource management.

The first members of the Office staff, who will report to Bill, are Bill Koteff, Operations manager; Deb Nicholls, Product Planning manager; and Tony Picardi, Personnel manager.

Bill Koteff will move from his current role as operations manager in the software organization and assume the responsibility for coordinating the activities of the Office of Engineering. He will administer meetings of the Engineering Management Committee (EMC), and assist Bill Strecker in managing and integrating the activities of the Office. He had assisted Bill Strecker in the management of DSSG, and had six years’ experience in Central Engineering as planning manager. He joined Digital in 1973 from a customer site, and spent his 10 years in the Marketing organization prior to joining Engineering.

Deb Nicholls and her Engineering Product Planning Group will transfer to the Office of

Engineering. She will retain responsibility for the product planning process and sponsorship of the Product Management Forum. In addition, Deb will greatly increase her focus on information systems. She will continue as a member of, and secretary to, both the Engineering Management Committee and the Strategy Task Force (STF). Prior to this position, Deb spent two years in Product Marketing. She also spent 10 years in the Field, including a position as District Software Services manager.

Tony Picardi, currently manager of Human Resource Planning and Strategic Employment, will be group Personnel manager for the Office of Engineering. Tony will provide a conduit for communicating our engineering vision, plans and goals to personnel managers in Engineering. He will work with Corporate and Engineering Personnel groups to influence crosscompany programs which affect Digital’s engineering population. He will work for both Dick Farrahar and Bill Strecker to assure linkages to both functional organizations. Tony joined Digital in 1981 and was a group Personnel manager in Engineering.

"We’ve reaffirmed our commitment to customer responsiveness, product innovation, and excellence in engineering," explained Bill Strecker. "My responsibility as vice president of Engineering is to ensure that we have an engineering function that meets these goals and produces world leadership products."

"An Engineering Management Committee, made up of the Engineering vice presidents, will be a guiding, coordinating and reviewing body. The STF will continue to work technical strategy issues. 1 will be chartering other management and technical task forces to help in specific areas as required."

Among the Office of Engineering’s first tasks, Bill said, are the documentation and communication of the current strategy (with help from both the STF and the EMC); development of an integrated product calendar and tracking system in conjunction with the line groups; and a series of reviews concerning our engineering processes led by various members of the EMC.

David Stone Heads New Product Business Unit

A new software Product Business Unit led by David Stone has been created and will report to Jack Smith, senior vice president, Operations. This group focuses on delivering the leadership distributed multivendor software environment required for Network Application Support (NAS), Production Systems and Applications Development.

The following major organizations comprise this new group:

o CALS Program Office, managed by Mike Taylor;

o Corporate Standards, managed by Gary Robinson;

o Data Base Systems, managed by Hans Gyllstrom;

o Distributed Systems, managed by Dick Mahoney;

o International Engineering, managed by Jim Mills;

o Office Systems and Applications Engineering, managed by Jeff Rudy;

o Secure Systems, managed by Steve Lipner;

o Software Business Group, managed by Pat Spratt;

o Software Development Technologies, managed by Bill Keating;

o Transaction Processing Systems, managed by Dennis Roberson.

David learned his software technology working on the MULTICS project (for Bell Labs and General Electric), the precursor to UNIX*. He joined Digital in 1970 as the manager of the DECsystem 10 operating system group. From 1972 to 1974 he managed all software engineering for Digital in Maynard. In 1974 he moved to Europe to manage Software Services and Engineering in Europe. Since then, he has managed Information Systems, Office and Communications Marketing Europe (1984), International Engineering, and Telecommunications Industry Marketing, Europe (1988-1989). He was named vice president, International Engineering and Strategic Resources in 1984, and corporate vice president in 1986. David also served as a member of the Systems Task Force from 1987 to 1989.

*UNIX is a trademark of American Telephone and Telegraph Company.

Two New Business Units Formed In Grant Saviers’ Organization

The Personal Computing Integration Business Unit has been created, reporting to Grant Saviers. This new group, aimed at significantly increasing the company’s share of the "desktop" business and accelerating Digital’s growth in client/server computing, will consist of the following organizations: o The Personal Computing Systems Group, managed by John Rose;

o Low-End Networks and Communications and the Electro Mechanical Design and Support Group, managed by Ralph Dormitzer; and

o Video, Image, Printer Systems Group (VIPS) managed by Larry Cabrinety.

Tom Frederick, manager of the Electronic Storage Group, will continue to report to Grant.

The Mass Storage Systems Business Unit will be managed by Charlie Christ, who will report to Grant. Charlie will be responsible for all Tape, Disk, Optical and Storage Subsystems, Engineering and Manufacturing. Reporting to Charlie will be:

o Disk and Subsystems PBU, managed by Ed Barron;

o Storage Process Technology Group, managed by Charlotte Frederick;

o Storage Manufacturing, managed by Greg Plakias;

o Storage Advanced Development, managed by Mike Riggle; and

o Tapes and Optical PBU, managed by Peter VanRoekens.

Charlie has joined Digital after a successful twenty-year career with Xerox, and, most recently, with Coopers and Lybrand Consulting. At Xerox, Charlie was President of the Reprographics Group, responsible for worldwide manufacturing of copiers, personal computers, disk drives and word processors. He was heavily involved in Xerox’s business recovery in the 1980’s. Charlie has consulted for Digital’s Storage organization for the past 16 months.

Telecommunications And Networks Organization Bill (B.J.) Johnson, vice president, Telecommunications and Networks, has appointed the following new members to his staff:

Fran Grigsby - Local Area Access Business Unit manager

This group is responsible for the hardware and software for attaching Digital and selected multivendor devices to Digital’s networks — primarily Terminal Server products. Fran joined Digital in 1976. She has spent the last five years in the Storage and Information Management Group (SIMG), where most recently she was Business Operations manager. In this role she was responsible for asset management, logistics and production planning for the worldwide SIMG business. In her 14 years with Digital, Fran has held positions of increasing responsibility in Manufacturing and the Field.

Mike Rinaldi — Local Area Networks Business Unit manager

This group is responsible for the Ethernet LAN bridges, FDDI products and follow-on products. Mike joined Digital in 1988. His initial assignment focused on engineering/manu- facturing technology integration in the Distributed Systems Technology office. In September 1988, Mike moved to Telecommunications and Networks (T&N) Manufacturing to develop a product/business management function. Last September, he assumed additional responsibility for Manufacturing Engineering, Quality and Technology within T&N Manufacturing. Mike came to Digital after spending 17 years with General Electric’s Aircraft Engine Group. His assignments in Design and Manufacturing included work in quality control, forensic engineering, materials and process development, CIM, information management and product development.

Ernie Smither - Testing, Publications & Services Group manager

This newly-formed organization will focus on interoperability of Digital’s products and ease of use of products and tools. The objective is to make sure customers can design, build, change and manage their networks effectively. This group includes the Distributed Systems Technical Evaluation Group managed by Emilio Marianelli and the Network Engineering and Technical Services Group managed by Paul Keresey. Ernie joined Digital in 1981 as an Engineering manager in the Storage and Information Management Group. Since that time he has held several engineering management roles. He staffed and managed the Winchester Buyout group and is currently manager of Support Engineering.

Executive Relations Program Now Part of International Accounts Marketing

The Executive Relations Program will now be managed within the Field organization as part of International Accounts Marketing. This transition is expected to strengthen the support of worldwide business development by effectively using Digital’s senior executives to build strong relationships with their counterparts in the company’s strategic accounts.

Gerhard Friedrich will continue as manager of this program, reporting to Jack MacKeen, vice president, International Accounts Marketing.

"Digital’s international business increasingly will be dependent on executives, at our accounts, understanding not only our product offerings but our vision and business direction," commented Jack. "Sharing the results of our own experience in managing a global business will raise trust and confidence in Digital as a capable worldwide business partner. "

Win Hindle, senior vice president, Corporate Operations, will continue as the Executive Committee sponsor for Executive Relations activities to ensure that customer executive relationship building is an increasingly valued part of all Digital executives’ responsibilities.

The Executive Relations effort also includes the Executive Partnership Program (EPP), managed by Doug Fulrath, reporting to Gerhard. The EPP Program will now be coordinated across the U.S., Europe and GIA as a consistent worldwide program.

Phil Bernstein Appointed Senior Consultant Engineer

Phil Bernstein has been named Senior Consultant Engineer, reporting to Vic Vyssotsky, director of the Cambridge Research Lab (CRL), and Dennis Roberson, manager, Transaction Processing Systems Group.

Phil has provided leadership in the development of DECdta, Digital’s Distributed Transaction Architecture, educated the Digital community in the area of Transaction Processing and Database technology, and has conducted research on generalizing classic transaction processing (TP) functions for reliable distributed computing.

The first researcher hired into CRL, Phil has helped to staff and develop a research group in database (DB) and TP. He has also made significant contributions to the Transaction Processing Management Committee as the architectural consultant.

Prior to joining Digital, Phil worked as a professor, researcher, manager, and consultant in the database and transaction processing fields. He was a professor at the Wang Institute of Graduate Studies, vice president of Software at Sequoia Systems, associate professor at Harvard and senior computer scientist at Computer Corporation of America. There he codesigned four distributed database systems.

He has published over 60 papers on the theory and implementation of transaction processing systems and database systems, and is co-author of "Concurrency Control and Recovery in Database Systems" (Addison-Wesley, 1987).

Appointments

Liz Aberdale has been named Corporate Employee Relations/Values manager, reporting to Dick Farrahar, vice president, Personnel. Liz has been with Digital since 1977. For the past five years she has been Group Personnel manager for Telecommunications and Networks Engineering and Manufacturing, reporting to Bill Johnson. Previously, she held personnel management positions for Low-End Communications, the Rainbow Product Group, and the world wide Finance function. She will be a member of the new Corporate Personnel Staff.

Bill Armitage has been appointed U.S. General Systems Business manager, reporting to Jay Atlas, vice president, U.S. Channels. Bill will be responsible for the U.S. implementation of Gary Eichhom’s Corporate General Systems Business plan, which calls for a renewed focus on the medium and small business market through resellers and direct sales. Most recently, Bill was manager of Business Development in the U.S. Channels Sales and Marketing organization. Prior to joining Digital in 1981, Bill managed a venture for the commercialization of aerospace technologies at General Electric and was a systems engineer at The MITRE Corporation.

Ross Brown has been appointed to the newly created position of U.S. Personnel manager, reporting to Dick Farrahar, vice president, Personnel. He will be a member of the new Corporate Personnel Staff. Ross has been with Digital since 1982. For the past three years, he has been Human Resource manager for the worldwide SSMI Finance and Administration organization. He also was Regional Personnel manager and Human Resource manager for U.S. Field Finance and Administration.

Jim Flanagan has joined the P.C. Systems and Peripherals Group as Finance manager, reporting to Grant Saviers and Dick Fishbum. Jim joined Digital in 1972 and has held positions in Marketing and Manufacturing, including the Terminals Product Group, Commercial OEM, GIA Manufacturing and Engineering, and U.S. Manufacturing. In addition, he has been Corporate Money and Banking manager and Corporate Financial Planning and Analysis manager.

Judie Kelley has been named IN-DEC Customer Services regional manager, reporting to Rich Nortz, U.S. Customer Services vice president. Judie began her career at Digital in 1972 as a software specialist in the Western Region. She held a series of increasingly responsible roles including Regional Sales Support manager, Customer Services branch manager, Customer Services district manager, and Business Support manager. In 1986, she became U.S. Customer Services Business marketing manager. She joined the IN-DEC Customer Services Region as programs manager last fall.

Alan Nemeth has been appointed Technical Leader, Open Software Group, reporting to Kurt Friedrich, group manager, Open Software Group. He will be responsible for Digital’s strategy for competing in the Open Software market, specifically including Digital’s UNIX* product strategy. He was most recently a corporate consultant with Prime Computer, Inc., responsible for establishing the overall technical strategy for the company and providing technology gate-keeping in all areas of the firm’s business. He has also served as Director of Technology at UNIX International, a consortium formed to provide product planning direction for the AT&T UNIX Software Operation. Alan was one of the founders of the organization and instrumental in defining the procedures and structures for developing industry-wide input to AT&T. From 1984 to 1990, Alan was President of the USENIX Association, an organization formed for the purpose of exchanging information and ideas about the UNIX operating system, the C programming language, and related technologies. He is currently a member of the Industry Advisory Panel for the National Science Foundation Computer and Information Sciences Engineering Directorate. He was a member of the DARPA Steering committee for the Computer Science Research Group at U.C. Berkeley, and is a member of ACM and the IEEE Computer Society.

Craig Zamzow has been named manager of the Digital Customer Video Network (DCVN), reporting to Roger Blomgren, U.S. Area Customer Training manager, and Don Elias, manager, Media Communications Group. In this newly-created role, Craig will be responsible for launching and managing several new Educational Services offerings based on the DCVN technology.

Craig joined the company as part of the sales force and in 1972 became the first District Sales Manager for the North Central District. He was promoted to Corporate Manager of Sales Training in 1974. Over the past 14 years, Craig has also been product line manager for the Logic Products Group and had several marketing responsibilities for new start-up businesses.

*UNIX is a trademark of American Telephone and Telegraph Company.

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