Volume 9, 9__________________________________________________________
October/November, 1990
"MGMT
MEMO"
was written by Richard Seltzer in Corporate Employee
Communication for the Office of the PresiÂdent. 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
Introduction
To
Digital’s Business Unit
Structure by Ken Olsen, president
Ken
Explains
Business Unit ‘Architecture’ To Officers
Application
Business
Units Organized As ‘Clusters’
Defining
The
Job Of An Abu ‘Cluster Manager’ by Bill Steul, vice
president,
Service Cluster
Renewed
Emphasis
On CSOs by Win Hindle, senior vice president
Managing
CSO Relationships In
The U.S. by Jay Atlas, Vice President, U.S. Channel
Sales
Managing
Large
Global Accounts Jack MacKeen, Vice President,
International Accounts Marketing
Cost
Effectiveness
In Corporate Administration by Doug Hammond, manager,
Corporate Administration
Update
On
Business In Eastern Europe
Bob
Hughes
Named Vice President, U.S. Sales
Changes
In
Educational Services
Far
East
Region Now Known As Digital Asia
Digital always
has been committed to taking good care of its customers. We
want customers to buy only what is best and to make sure that
what they buy satisfies their need. We spend time with them
before their needs are defined. We help them develop the
system, and then put it together and make it work for them.
Through most of
our history, the costs involved in taking care of the
customer, no matter where the customer is located around the
world, have been covered by the price we charge for the
hardware and software, leaving enough for us to be quite
profitable. In recent years, we have added continually to the
wide variety of services we provide to help the customer, but
each one has raised our costs. At the same time, other
companies are selÂling many hardware and software packages
without such services. We are now in a position where we have
to price our equipment in line with those who give little or
no services with their products, while still trying to
maintain our tradition of taking care of the customer’s needs.
We are not
changing our worldwide organization in order to accomplish
this. Instead, we are breaking the company into budget units,
or independent business units, each of which has
responsibility to ensure that the customer is willing to pay
for all the costs and investments we incur, either in the
initial price or as a separate charge. For those customers who
want nothing more than hardware or software, we can sell at a
price that is competitive with anyone.
For budgeting
purposes, we have divided the company into three groups. The
Product and Service Creation Units are responsible for
generating, engineering, developing, and manuÂfacturing
hardware, software and service products at competitive prices,
with all the Digital quality and testing, while being sure
that the customer is willing to pay for any extra cost
incurred.
The second group is Application Business
Units (ABUs). This group is responsible for delivering the
complete hardware and software solution to the customer. They
market and present the application on the basis that it is
something useful to the customer and something for which the
customer is willing to pay.
The third group is the selling group,
called Account Units. This group is responsible for the plan
and actual results of selling all products and services
directly to their cusÂtomers. They must provide an effective
contribution to Digital’s performance by making an agreed upon
profit.
In summary, the cost of product
development and manufacturing, plus the cost of integraÂtion,
applications, and marketing, plus the cost of selling, when
subtracted from the price we charge the customer, has to leave
a profit that is very satisfactory to stock holders. The
relationship or sum of these various business units creates
value that far exceeds the individual contribution of any
single one of them.
We deal with a
wide range of customers and applications around the world. We
sell a broad line of computer equipment — from terminals and
personal computers to mainframes. We integrate these into
systems that range from a small office network to a worldwide,
enterÂprise-wide system. We sell hardware at competitive
wholesale prices. And we also sell complete systems of any
size, guaranteeing their results, and even operating them for
customers.
While we use the best management systems
to meet these complex requirements, we still base our business
on trust, integrity, and the entrepreneurship of each of the
many parts that make up the company.
To satisfy
customer needs, we continually strive to give more freedom to
those groups that need the freedom to be creative and
entrepreneurial. At the same time, we strive to maintain the
discipline to make simple and complex systems go together
quickly and work reliably, and to supply all the help,
services and management reporting necessary for each
entrepreneurial group to manage well and to be creative.
Seventy years
ago, when Alfred Sloan set out to reorganize General Motors,
and at the same time changed DuPont, he said that each
business unit manager should have complete freedom to run his
or her unit in an optimum way, with no interference from
headquarters. He also said that headquarters should make sure
that all units work together and succeed in their goals. Years
later he said he realized that these two statements were still
very true and very important, but were also in conflict with
each other.
This is why we
cannot manage by computer. It takes human beings with
goodwill, skill, and
plete freedom,
and yet maintaining the discipline and standards necessary for
the many parts to work well together to enhance the system or
network.
Ken Olsen, president, discussed
strategic business units and their roles at the quarterly
Officers’ Luncheon, held in Maynard, Mass., on Oct. 3. The
following article summarizes his remarks.
"We have set out
to do what probably no one else has ever tried before — to run
a company as large as we are, with an enormous and diverse set
of products and customers, all as one company. That’s not an
easy task," admitted Ken.
"We’re not going
to break the company up into divisions, which is the normal
way. Rather, we’re going to break up into business units and
treat each as if it were a separate busiÂness.
"In simple
terms, our goal is to have all the advantages of a small
company, along with all the advantages of a large one.
"Our cost
problems are not in manufacturing products or engineering
them," he noted. "We can compete with anyone in those realms.
It is the other costs we incur that are hurting us — the costs
that come from well-intentioned people doing good things that
the customer is not willing to pay for.
"In the past,
people would do ‘wonderful’ things for the product groups.
They would plan and spend money, and the accounting system
would dump all the charges on the product groups. Now, you
should act as if a product group were running a separate
company in Vermont, and it is only going to pay for the
services that it orders.
"Another problem
we face is that in supplying large complex systems, and by
doing extra applications and giving discounts and free
service, we sometimes lose our shirt on big projects. If today
we charged for the services we gave to the customer, we’d be
very profitable," Ken added.
"Customers want
complex and even simple systems integrated. They want all the
service. They want us to install the system, teach their
people, show them how it works and, someÂtimes, even manage it
for them. We should charge them for some of the things we do
that we have not charged for in the past.
"In our new
architecture, we break the company into three obvious pieces.
The first piece generates products. This includes the
engineering and manufacturing of hardware, softÂware, and
services. (Services also generate products, although they have
not always thought of their work that way.) These product and
service creation groups set internal transfer prices, which
are the prices at which they would sell these products to
customers if there were no selling cost. That is also the
competitive, benchmark price of that product. The quality of
their work depends on the difference between the cost and the
price and also the amount sold.
"The second
piece of the company takes products and applications from
inside and outside the company and integrates them into
systems for the customer," he continued. "For inÂstance, Bill
Steul does this for Banking. These ‘integrators’ will set a
sales price, which includes a cost for selling.
"The
selling
is done by account teams with almost no overhead.
"There is a myth
that is prevalent in many places in the company. It says, if
you are the boss, all the budgets under you are summed up and
that is your budget, and that determines what size building
and staff you deserve. This is how some regional managers got
such elaborate buildings — to match their ’billion-dollar
budgets.’
"Now, the budget
of a regional or district manager is going to be based on how
much real help he or she provides to the account teams. The
account team lays out a plan; and when it’s approved, it is
their plan and their budget for that account for the whole
world. The Raytheon account receives its own budget, rather
than having to negotiate with Munich to get part of the Munich
budget. There is no Munich budget. The regional and district
managers do not run the budgets of the accounts in their
territory. The budgets belong to the accounts.
"This approach
has interesting implications for Services. Since Services
generate proÂducts, they should deliver these products in the
same form that our other product creation groups do. This
means that if Diane is selling to Raytheon in Munich, she
sells everyÂthing — the hardware, the software, the services,
and the enterprise integration. CusÂtomer Services and EIS
don’t need to have district managers in Munich to negotiate
with the customer.
"Often the
question comes up: ‘How do we run like one big company and
like dozens of separate small companies at the same time?’ It
is hard for one accounting system to proÂvide both views," Ken
admitted. "We will have one system to report our quarterly and
annual financial results to shareholders and to pay taxes.
That accounting is complex, with 50 states and dozens of
countries, and we have to follow all of their complicated
rules very carefully. But in addition to that, we need another
accounting system to help us run the business efficiently.
"With this new,
additional reporting system, we will deliver one standard
report every week to every business unit," he promised. "It
won’t show everything, but it will give them much of the
information they need for making decisions. And we will ask
every busÂiness unit to report to the Executive Committee once
a month.
"We also promise
that, with all haste, we will have a computer system which
will allow any manager to request any data in any format,
sorted any way he or she wants, and have it come up on his or
her terminal. We have the technology to do this, and now it is
a priorÂity to make it happen.
"With this
frequent and systematic approach, the Executive Committee will
have the inÂformation that it needs to balance our investments
and plan for our future," he concluded.
The new system
for reporting internal business information — how financial
information is gathered, arranged and distributed to managers
in support of business decisions — is based on "business
units." This reporting of business unit performance is
designed to encourage entrepreneurial decision-making, through
an improved understanding of each business unit’s value-added
and profit contribution, as well as its return on assets and
the expenses associated with its direct activities.
In the past, all
expenses, regardless of their source, were allocated to the
groups that created the products and were part of the
performance they were measured on, even though they may have
had little control over many of those items. The new
management reporting for these groups reflects their
particular value-added, matching their activities and
excluding those that are performed in other business units.
This approach provides direct accountability for performance
and should be more useful in making individual business unit
decisions.
The three kinds
of business units are Product and Service Creation Units,
Application Business Units and Account Units.
This way of
looking at the company’s performance gives sharp focus to
discrete segments of the company’s business. It also makes it
possible to aggregate the numbers in various ways that provide
useful perspectives of the company’s overall activities. From
an organ-
izational point
of view, individual business units may be totally unique, with
greatly differing scopes and responsibilities; and the
organizational units need not coincide with the logical
entities used for reporting purposes. For instance, Customer
Services inÂcludes people who create service products, and
also other people who work as members of account teams and
deliver these products directly to customers. But for
management reÂporting purposes, the "creation" role is viewed
as one business unit - a Product and Service Creation Unit —
and the work with accounts is seen in the plans and results of
Account Units.
Business units
each have a plan which is expected to support the company’s
primary goal of customer satisfaction and our drive toward
excellent financial results. When expressed in quantitative
terms, the company’s goals are 22% return on equity (ROE) and
16% return on assets (ROA). The business manager will be able
to present enough information to the Executive Committee
and/or the Board of Directors for determination of its value
to the company goals. All business units are responsible for
achieving their approved business plan commitments.
For this
internal financial reporting, it is not necessary or even
desirable to use the same kinds of profit and loss (P&L)
statements as are used in external reporting of quarÂterly
results. Rather, it is important to focus on those elements
which will help manaÂgers plan and improve performance in
those parts of the business that they can directly control or
closely influence. Hence, the line items on the P&Ls for
each of the three different categories of business units
differ from one another, reflecting their different
activities.
The main role of
a Product and Service Creation Unit is to develop and produce
competitive products that satisfy customer needs. Products
could be hardware, software, and/or serÂvices. These products
are sold to the Account Units using a transfer price, which is
based on a competitive-level price for a comparable product in
the marketplace. The actual price the company receives from
the customer is recognized in the Account Unit.
The Product and Service Creation Units are
responsible for:
o best-in-class
product and service development, manufacturing and service
delivery; o engineering, manufacturing and service
competitiveness; and
o profitability
on their direct added value (not including selling- or
marketing-related expenses).
The costs
incurred by the Product and Service Creation Units are the
direct costs required to develop and produce the products, the
associated base-product marketing costs required to
communicate the performance and benefits of the products to
the Account Units, and product-specialist costs required to
support the products within the Account Units.
Application
Business
Units (ABUs) are designed to add value to Digital’s base
products and services in a way that allows market share growth
and makes the selling process easier for account managers. A
key role of the ABUs will be to connect directly to account
managers to make the full range of Digital products,
applications and services easy to sell, and to make it easy to
price for the added value of the ABUs.
During
the 1980s, we empowered the field by focusing on geographies
as the basic sales unit. And we empowered our engineering
groups through the creation of product business units. And
while this helped fuel much of our success during the 1980s,
the gap between internal product and application development
and field implementation became unacceptably wide.
ABUs focus on
satisfying customers in defined groups of accounts, whether
those customers are in a vertical market, like the insurance
industry, or a class of users, like office workers. They all
have global responsibility for their market segments, and they
should: o provide the business solutions that meet our
customers, needs;
o
generate demand for Digital’s products and services;
o focus the company outwardly on efforts
to increase profitability and marketshare in targeted markets;
and
o support the account management structure
and account planning process of the sales force to ensure that
the strategic investments the company is making (in
applications, products, services, and partnerships) serve
their needs.
They
must provide the most competitive application solutions. To do
this successfully, ABUs understand what kind of solutions the
customers in their markets need, deliver a breadth of needed
high quality solutions, price and position them competitively,
and ensure ease of integration to match customer needs and
buying preferences.
At
the same time, they must create customer demand, using the
whole range of marketing programs to focus on their particular
key industries or market segments. They are DigiÂtal’s
vanguard in positioning Digital publicly, and in supporting
the field in positioning Digital products, services and
application solutions.
A
major responsibility of the ABUs is to make Digital products,
services and applications easy to sell and easy to buy. This
means working to ensure that the sales force has all of the
tools and training it needs to sell effectively amidst tough
competition. It also means seeing that the sales force has
sufficient support resources with the right knowlÂedge and
expertise. Finally, it means that the product, services and
applications themÂselves are priced competitively and packaged
in a way that makes it easy for the customers to purchase and
the sales force and partners to sell.
Our customers’ needs are changing.
Customers no longer focus on information technology primarily
as a cost reduction measure. They want solutions to their
industry-specific business problems, and computer hardware is
no longer synonymous with solutions. Today, customers want
solutions that increase their competitiveness and provide a
platform for growth, not simply a point solution to a specific
problem.
Changes in technology are altering
customer perceptions. Hardware has become less expenÂsive
while performance has increased dramatically. Emerging
standards have reduced the ability of customers to see a clear
and distinct differentiation between competing venÂdors’
hardware. The key differentiator is the ability to supply
applications and services that solve business problems and
integrate solutions across an enterprise.
These trends are pushing Digital to have a
greater business focus on applications and services. The
intensity of competition within the industry is increasing.
And, with a greater demand for business solutions by customers
and the continuing commoditization of hardware, the balance
among hardware and software and services is shifting.
Customers are coming to expect price competitive,
interoperable hardware and much higher levels of customer
service and support than ever before.
ABUs enable us to focus on similar
customers to better understand and meet their needs.
Meeting customer demands for
industry-specific solutions to their business problems,
whether the solution is a point application or a major systems
and support integration effort, means concentrating and
investing in the best solutions and solutions partners for
specific markets segments or groups of customers.
We also need to have the account managers
and marketing more closely allied if we are going to succeed
in profitably increasing market share by successfully
providing business solutions.
The most effective delivery mechanisms for
solutions will vary by defined groups of cusÂtomers and by
geography. ABUs must develop worldwide strategies, in
conjunction with the field, to ensure that each group of
customers and each geography is having solutions delivered in
the most cost-effective and efficient manner. The ABUs also
will manage relationships with key solutions partners, support
these relationships with a broad specÂtrum of programs, and
ensure that account managers can access all available channels
worldwide. They must cooperate with the geographies to
optimize terms and conditions, discounts by groups of
customers, and uplift in the countries to develop their
market-specific worldwide distribution plan.
In addition, there are a number of
activities for which ABUs are responsible in conjuncÂtion with
other groups in the company. For example, insofar as the ABUs
are responsible for ease of selling, they must work very
closely with the account teams, as well as with the product
and service business units. Only all three, working together
can, for exÂample, ensure that the sales force is well-trained
on products, services and applications.
The ABUs and the Account Units share two
measurements in common: revenue and sales yield. Common
measurements are designed to ensure that the coordination and
synergy necessary to achieve the company’s overall plan takes
place.
Digital puts the success of the customer
at the center of the universe, with Account Managers and
Partners as the direct contacts in meeting their needs. In
this model, ABUs, Product and Service Creation Units and
Account Business Units each have a unique value in meeting
customer needs. In addition, each group, working together adds
a joint value.
Application Business Units (ABUs) are
organized in four "clusters," based on the similarÂity of
customer needs, plus two additional business units — General
Systems Business and Telecommunications. The clusters are
Service Industry, managed by Bill Steul; ManufacÂturing
Applications, managed by Peter Smith (acting); Public Sector
Applications, managed by Harvey Weiss; and Cross-Industry
Applications, managed by Henry Ancona.
The Service Industry Cluster includes
seven ABUs:
o Banking, managed by Norm Goldberg;
o Insurance, Sandy Thomas;
o Media, Bob Farquhar;
o Utilities, Bill Steul (acting);
o Retail, Bill Steul (acting);
o Travel, Bill Steul (acting); and
o Professional Services, Bill Steul
(acting).
"Where an existing industry group like
Insurance has close ties to U.S. Sales, we’ll use that as a
base," explains Pete Smith, vice president, Product and
Industry Marketing.
"And we’ll
provide the group with product, application and system
engineering support as necessary - and help them expand and
implement their successful field programs on a worldÂwide
basis.
For those
product groups like CIM and the Engineering Systems Group that
are strong on the product side, we’ll do our best to make sure
that they have strong connections to the field worldwide."
In the
Manufacturing Cluster, ABUs have been organized around
application segments, and are focused on meeting the needs of
functional managers in:
o
manufacturing — CIM Marketing and Product Development (CMPD),
managed by Dave CopeÂland;
o
engineering - Engineering Systems Group (ESG), Dave Copeland
(acting);
o sales and distribution - Sales and
Distribution Systems (SDS), Eli Lipcon; and o research and
development Industrial Research/Lab, Robert Home.
The Industrial
Research/Lab Applications Business Unit is built on a segment
of the LabÂoratory Data Products (LDP) group. The expertise in
the LDP group will focus more speciÂfically by industry and
functional expertise. Industrial Research Applications will
focus primarily on research and development in the process
industries.
The
Public Sector Applications Cluster includes:
o
Education, managed by Bob Trocchi;
o
Health Care, Willow Shire;
o
Science, Willow Shire;
o
State and Local Government, Bob Trocchi; and
o
Govemment/Systems, Harvey Weiss (acting).
The
Govemment/Systems
Group focuses on the U.S. Federal Government.
An additional
business unit, General Systems Business, managed by Gary
Eichhom, has been created to focus on the the small business
market, with its distinct need for low cost of sales, complete
application specific solutions, value-added service and unique
distribuÂtion requirements.
Also,
Telecommunications, managed by Ernst Wellhoener, headquartered
in Valbonne, France, has responsibility for the worldwide
telecommunications industry.
Finally, there
are key classes of users that are vital, but cut across all
the vertical lines of business and focus on market segments.
For example, office systems are a set of
key applications
and platforms directed at a class of users, and pervade all
the vertical ABUs, whether Service or Manufacturing
Industries, or in the Public Sector. The business units which
deal with these "horizontal" needs are grouped in the
Cross-Industry AppliÂcations Cluster.
These
horizontal
ABUs include:
o
Office (OIS), managed by Gene Hodges;
o
Electronic Publishing (EPS), Howard Woolf;
o
Production Systems, Bob Weiner;
o
Finance and Administrative Business Systems (FABS), Mike
Carabetta; and
o
Computer-Aided Software Engineering (CASE), Marion Dancy.
It is the job of
the horizontal application groups to cooperate and develop
mutual plans so that our office systems strategy, for example,
is embedded in the plans of every ABU, and account managers
and partners are successful in these key segments.
ABUs were
created to answer both the external "pull" to more effectively
provide business solutions as well as the internal "push" to
create a closer connection between strategic investment and
field implementation.
A "cluster
manager" is a coach for a group of related Application
Business Units (ABUs). We use the word "coach" to emphasize
that we don’t want to over-manage. The coach is a change
agent, able to provide an environment for the ABUs to do their
jobs. In the words of Elizabeth Dole, the U.S. Secretary of
Labor, "We motivate people to excel when we empower them to
seize opportunity."
The Executive
Committee has empowered the ABUs and will act as the review
and approval body for their plans. The coaches are on the
sidelines making sure that we prepare good quality plans, and
get the approval we need to go after the markets for which
we’re reÂsponsible. They also make sure we have strong links
with other parts of the company.
We estimate that
as cluster coaches we will spend about half of our time
worrying about corporate issues. Most of the rest of the time
will be spent worrying about our own proÂduct and industry
marketing structure, trying to create the environment for the
ABUs to succeed. We will also spend some time coaching the
individual ABUs.
As
cluster coaches, we should foster collaborative as opposed to
"win/lose" behavior among ourselves and in our dealings with
other parts of the company. We should focus on corÂporate
issues and Digital’s overall good. We should clearly
articulate direction and provide clarity around roles and
responsibility. We should lead major changes for the company
in such areas as pricing, sales and sales support models, and
finding ways to better succeed in Enterprise Integration
Service (EIS) business from an applications point of view. We
should empower ABUs and functional groups to implement our
strategies. We should help eliminate red tape and push back on
unhelpful structure, process and commitÂtees.
We
will put a lot of attention and energy into clarifying and
communicating the corporate mission, strategy and messages. We
also will let the Executive Committee know the markets where
we want to be, the products we want to be strategic, the
application areas and channels where we want to invest, and
how to balance all of those investments.
We
expect to spend a lot of time looking at corporate issues that
cut across all of our businesses, such as pricing strategy,
worldwide simplification of our terms and condiÂtions,
channels strategy and models for selling and supporting our
customers in the Field. These are areas in which the cluster
managers will work together as a team with Peter Smith’s
staff.
Over
the next few months we need to develop the model for
empowering the ABUs and helping them to be successful. That
will include the long-term and short-term planning process and
measurements. It will also include the cross-functional
planning and commitment process, including geographic links,
Digital Customer Centers (DCCs) and sales support, training
for the Field organization and methods for getting information
about market requirements to Central Engineering. We’ll also
work as a group on the development of our people and on the
organizational development process, including our Marketing
Development Program and the Marketing Career Advisory Board.
When
working with the ABUs, our main concern will be to help them
develop, get approved, and successfully implement quality
plans. Can we make a convincing argument for the inÂvestments
we want to make? Can we get the business for which we’ve
committed? Do we have adequate investments? Do we have the
right people skills? Do we have the right level of resources?
Do we have a management review process that allows us to
measure where we are against the plan and to take corrective
action as we go along? We also need to be able to share
knowledge, expertise, and services among the ABUs. We need to
find ways to share and benefit from all the expertise we’ve
developed over the last few years in product and industry
marketing.
To
sum it up, cluster managers will know they are successful if
all of their ABUs meet or exceed their revenue and profit
contribution plans and build for the future, while supÂporting
the overall corporate direction.
The mission of an ABU is to support all
Digital and CSO (Complementary Solution OrganizaÂtion)
products and services worldwide by providing business
solutions for customers, creating demand for industry
applications and solutions, and growing a profitable market
share. In its own market, each ABU leverages Digital’s key
technologies, services and cross-industry applications by
bringing together the functions of sales, marketing and
engineering across geographies.
Although each Application Business Unit
(ABU) is different, Insurance is an example of how ABUs
operate — particularly those that are venturing into new
markets.
An ABU also adds unique value by investing
to build unique products and solutions specific to its
industry. In the Insurance industry, an example is EDGE, an
imaging system that we are developing jointly with Phoenix
Mutual Life Insurance Company, which ultimately will have
broad applications for other insurance companies as well. An
ABU also works with CSOs, Digital Customer Center (DCCs) and
Enterprise Integration Services (EIS) systems engineers to
develop and deliver "augmented products," such as our
Insurance Professional Work System (IPW). The IPW was
developed based on two customer projects and provides an
applications platform that incorporates emerging technologies,
such as Artificial IntelliÂgence (AT), voice and image to
support a variety of products for customers in the insurÂance
industry.
On
a worldwide basis, Insurance represents a $15 billion market
for computers and related software, operating systems and
layered products. About half of that is in the United States.
If you add third-party applications, services, and the
insurance companies’ own in-house groups, the total market is
probably two to three times that size.
In 1985, our market share in Insurance was
very small, but this industry was looking for an alternative
to IBM. The industry’s business architecture and IBM’s
computing archiÂtecture were not well suited to one another.
Digital responded by increasing its field focus, primarily
around the district in Hartford, Conn., and soon achieved some
signifiÂcant wins, including our first million-dollar account
— The Aetna — followed by the Hartford Insurance Group. Today
we have a series of other significant accounts that serve as
beachheads for this business, primarily in Paris, London and
Toronto.
A group of senior executive customers
known as our U.S. Advisory Board help us understand how they
use our products to solve specific business problems. They
don’t expect us to be industry experts, but they do want us to
know where we have a competitive advantage in the use of these
products. They help guide us in the right direction which
helps us price for value and at the same time make adequate
profits in areas where we can be unique and grow.
Our products fit very well with the
architecture of their business, which is information-
intensive, complex, and highly distributed with branch and
regional networks. They need to get at
customer information, be able to underwrite policies and pay
claims instantanÂeously. They need to provide high service at
low cost, and must be able to differentiate their products.
They need to support their professionals with new kinds of
expanded applications, which are easy to use, and also
incorporate all the multi-vendor capability they already have
in place - both on the desktop and in the data center. At the
same time, they must integrate emerging technologies that hold
promise for this industry, such as imaging and expert systems.
They need to access and manipulate very large databases - what
we call "liberating the data from the mainframe". And they
must do complex analyses about complex service offerings for
very large employee benefit, commercial property and casualty
accounts.
This is a very
large opportunity, but we’re not the only ones who have seen
it. The competition is IBM. They dominate this industry, and
they seek to secure their position through Office Vision, SAA
and $120 million equity positions in software vendors. If we
don’t sustain our position in this industry, and continue to
invest in our products and form alliances with other companies
that can help us, we’ll lose our beachhead. And that could
hurt us in commercial applications that are important to us in
our traditional manufacturing, engineering and scientific
accounts.
Emerging
technologies fit well with Digital’s hardware and layered
products for this industry. Image and work-flow management
systems (EDGE) probably represent our biggest opportunity to
show the difference and value of Digital products and services
to insurance customers. We need to invest there, and are doing
this now. And in fact the EDGE systems engineering team is now
part of the Insurance ABU and is charged with the goal of
instalÂling this system in insurance accounts in FY91. This
could become the cornerstone of our Insurance business and of
several other businesses as well.
In this new
structure, we work with account sales, the DCC and EIS teams
worldwide. This means working with them to create a joint plan
that maximizes and balances the resources, so that we deliver
the most effective solutions using our products and services.
For instance, the Insurance Professional Worksystems (IPW)
shown at DECWORLD and DECville demonstrate the use of Digital
products in an integrated applications platform.
Many customer
solutions are possible if project delivery capabilities are in
place. We must build our project delivery capability with EIS
and service alliance partners before our systems integration
business can become a significant part of our revenue. We’ll
increase our services revenues by driving the solution
business with services, as opposed to adding them on after the
equipment is sold.
ABUs are also
responsible for making business decisions that grow the
profits and increase the market share for their piece of the
company’s business. They are accountable for the
Profit and Loss
(P&L) statement in a way that adds real value to the way
we operate in any given industry. The new P&L format for
management reporting shows important characterisÂtics of the
market and points to what we can and should do to be
successful. This new approach to each industry puts us in a
position to plan and be accountable for growth in a
comprehensive and integrated way.
The business
unit structure should give Digital sharper focus on individual
markets and greater flexibility and responsiveness when
dealing with business partners of all kinds - now known
collectively as Complementary Solution Organizations (CSOs).
In recent years,
our relationships with CSOs have become increasingly complex
and imporÂtant to the company’s success. This development has
paralleled our evolution from being simply a hardware vendor
to becoming a provider of complete, networked solutions.
For the last
three years we have tried to rebuild our emphasis on all the
indirect chanÂnels. We have recognized that even though we
want to do business directly in the large end-user space, we
were missing a good bit of the market by not allowing more of
our distribution to occur through indirect channels. We also
have established a variety of new relationships with software
providers to encourage them to write their software for use on
our platforms.
Today, we have a
multitude of different kinds of relationships, and can adapt
to a variety of business needs. Our business unit structure
should now enable us to take full advanÂtage of these
opportunities.
For instance,
Gary Eichhom’s General Systems Business is a natural
progression from what we have done before. Small business
marketing will be done through CSOs known as "Value- Added
Resellers" (VARs). These companies take possession of hardware
and software from Digital, add their own software, and resell
the system to end users.
In the U.S., we
manage our indirect sales relationships through our Channel
Sales organiÂzation, under Jay Atlas. He manages a separate
sales force that focuses on "channel acÂcounts." He is
responsible for implementing our CSO programs.
The selection of
most of the CSOs is done by the Application Business Units
(ABUs) since they are familiar with the software customers
need. They designate which companies have the expertise that
we want to include Digital platforms and negotiate our
agreements with those companies. Then it is up to Jay’s sales
force to maintain that relationship.
To give
visibility to the importance of CSOs, Jay holds a major
conference once a year at which senior executives of our CSOs
gather. They hear about new products and programs, and have an
opportunity to discuss their concerns about relationships with
Digital.
Business units
will have a much stronger say in setting the company’s
strategy. Each will define how it approaches its set of
customers and will be able to maintain those relationÂships.
In some cases, ABUs will package everything together and give
the customer one price for everything. In other cases, they
may want to keep the hardware and the services separate. We
are leaving it up to each ABU to define the way of doing
business in their marketplace.
We don’t have
all the expertise needed to do everything. We need to
affiliate with the people who have that expertise and can add
value to what we can provide. It’s that exÂpertise that we’re
looking for in CSOs.
Our earliest
business partners were what we call Original Equipment
Manufacturers or "OEMs." They would take our hardware products
and incorporate them in their end-user system which they would
then resell to the end user. Such relationships date back to
Digital’s beginnings. One of our first OEM customers of the
PDP-1 computer was InternaÂtional Telephone and Telegraph
Company (ITT). They used our PDP-1 computer in the message
switching systems they sold.
These OEMs were
"technical." They had the ability to take our products, do the
interÂfacing to their equipment and do the necessary software.
They could build our products into theirs without a great deal
of assistance from us because they had engineers who were as
good in work with our systems as we were.
That business
grew very well during the early growth phases of Digital, and
for a long time 35-40% of our revenue came from Technical
OEMs.
In the early
1970s, we added a new kind of business partner, which we
called Commercial OEM, or "COEM." These companies were not
hardware proficient. Generally, they took our systems, added
commercial software and resold those systems to end user
customers. That business also grew rapidly and was quite
successful.
About 10 years
ago, out of the COEM business grew the "Digital Authorized
Distributor Program," in which we allowed certain qualified
COEMs to use the name "Digital" when selling to their end
users. This was the first step in developing closer business
relaÂtionships with various classes of customers. It came
about in response to the fact that some of our COEMs ran into
financial problems and went bankrupt, leaving their end-user
customers very dissatisfied with Digital. So we created a much
more disciplined program for COEMs to earn the name of
"Digital Authorized Distributor." We were protecting end users
by screening these companies and determining which ones we
believed were reliable.
Meanwhile, our
Component Group adopted a similar approach. They were selling
peripherals, such as terminals and board-level PDP-11 and
PDP-8 products, to customers who resembled technical OEMs in
some ways, but who distributed our products rather than
building them into products of their own. To better manage
this piece of the business, they started an "Authorized
Terminal Distributor" program as another form of indirect
distribution of Digital’s products.
In the early
1980s, when we changed from a product line structure to a
structure that gave more responsibility to the geographic
units, we began focusing more effort on distributing to end
users. That was also the period when we settled on the VAX
family as being our mainstream set of products. With the VAX
family, we felt we could develop enough software and get
enough software partners that we could do more of our business
directly with end users. During that period we built a strong
account management focus on large end users and lost some of
the emphasis we had had on indirect distribution channels.
It was at that
time that we started our Cooperative Marketing Program (CMP),
which conÂtinues to be a very important adjunct of Digital’s
marketing. The focus here is mainly software. Sales people
from a CMP go together with Digital sales people to the
end-user customer and present a combination of Digital’s base
platform and software from this CMP that will solve the
customer’s business need. Through this program, we built
marketing relationships with organizations that had expertise
in various industries and applications and software.
Five years ago
we established a program whereby we would sell directly to the
very large companies and would channel our business to smaller
companies indirectly through our business partners.
Today, we use
the term "CSO" to cover all the relationships that we have
with OEMs, CMPs, authorized distributors — anybody who
distributes Digital’s products, or who provides software for
our platforms or cooperates with Digital in a marketing sense.
In
the U.S., the channels sales organization is responsible for
management of Digital’s third parties, which we call
"Complementary Solution Organizations" (CSOs). We have a
direct sales force of approximately 700 people, organized by
accounts and focused on these kinds of customers. Our job is
to ensure that from their vantage point, Digital is the best
partner they can possibly have. We also are responsible for
generating profitable revenue as part of the overall U.S.
plan.
Our
relationships
with CSOs not only produce revenue directly, but also leverage
other sales. For instance, the fact that certain software is
available on Digital platforms can be important to end user
sales. While channel sales typically comprise about 25-30% of
total U.S. sales, we estimate that leveraged sales represent
another 25-30%. In other words, our CSOs impact about 50-60%
of our U.S. sales performance. There is no doubt these
relationships are critical to the company’s business today and
in the future.
The
marketing component of our Channel Sales organization focuses
on providing programs to develop and optimize our
relationships with CSOs. These include communication and
trainÂing programs to keep CSOs current, lead-generation
programs to promote business, and programs to recruit new
third parties with key applications or in new markets that are
important to Digital.
Application
Business
Units (ABUs) tend to concentrate on strategic applications
that will be critical to our success in penetrating the
largest customers in new and growing marÂkets. We focus on all
third-party relationships — those in support of the ABU’s as
well as third parties who provide other complementary
applications.
Often
the "glue" linking the efforts of the ABUs and Channel Sales
is the Digital Customer Center (DCC), where many CSO
applications are available for customers. The DCCs are
connected with particular ABUs, such as Telecommunications and
Discrete Manufacturing.
We
have an account manager for each CSO. He or she is responsible
for making sure we have an account plan that describes the
total relationship between Digital and that CSO. This is
equally true with our corporate accounts, which have very
broad relationships with Digital, often including some
reseller or other CSO business. Examples include Schlum-
berger, General Electric, and McDonnell Douglas. In those
cases, we have a manager for the CSO relationship on the
Corporate account team. The corporate account plan includes
all of the third-party relationships, activities and programs
that we are executing with that partner.
We
focus our support efforts on the account manager because we
recognize the uniqueness of every single account and the need
to have a plan with each of them to maximize their
relationship with Digital. The primary job of the district
manager is to provide coaching
and counseling
to account managers on how to manage and develop relationships
with third parties.
Most of our CSOs
offer the same applications on platforms offered by our
competitors. They often sell on IBM, Hewlett-Packard, SUN and
others, as well as Digital. One of our tasks is to get their
attention, based on our relationship with them as a product,
techÂnology service and program provider. All sales managers
focus on these areas to be the partner.
Nearly 2,000 of
the 3,000 third parties with which we have relationships
provide only software. They may not purchase products from
Digital, but we support these accounts similarly to how we
manage CSO resellers. The largest have dedicated account
managers, and the smaller ones have shared account management.
We measure the success of these account managers through an
algorithm that tracks leveraged sales. Every time a CSO sells
a software application on a Digital platform through its
software license we have a way to determine how much hardware
was leveraged.
One of the keys
in developing CSO account plan is "joint planning" - a set of
workshops and brainstorming sessions where we sit down with
our CSO for one or two days and bring in experts from various
parts of Digital, as required, to make sure that we create a
detailed plan with the account. The resulting account plan is
a dynamic, constantly updated docuÂment, which serves as the
road map for Digital and the CSO. It represents a joint
commitÂment to the marketplace and working together.
Ten years ago,
our relationship with third parties was "laissez-faire."
Through terms, conditions and discounts, we gave OEMs products
that they could take to market. Our job was to give them the
best platforms, the best products, the best operating system.
Then we just wished them good luck, and they were on their
own.
Now with our
joint planning activities, we are moving toward closer
partnerships. We’re recognizing that CSOs are critical to our
success, and that we need to make serious comÂmitments to one
another.
If we want to
have the best partners that the marketplace can offer, we must
make sure we’re the best partner for them. In the nineties,
this will mean a global view of marÂkets, relationships and
co-planning. We have to make sure we are not taking the
shortÂterm, transaction view of our dealings with CSOs, but
are really taking a longer-term view of relationship and
commitment.
In
the future, a CSO will not be able to be an equal partner to
five or six different vendors. They are going to focus on one
or two, and whether they choose us will be a function of how
we behave today. It’s important for us, in all of our
interactions, to behave as the best partner — in the Field, in
our planning and in our ABUs. We have to view this not as a
marriage of convenience, but rather a marriage of commitment.
International
Accounts
Marketing is chartered to bridge the three geographies to work
account management issues, business practices and support
tools. Our job is to make Digital appear consistent to our
global accounts.
We
are using 16 end-user accounts as a pilot. When we solve the
problems for those acÂcounts, we will have, in large measure,
solved the problems for all the accounts with which we do
business on an international basis.
Today,
account managers are trying to develop their account plans
worldwide. As they deal with the headquarters of a General
Electric or a Schlumberger, they are trying to underÂstand all
of the customer’s issues on a global scale, so they can be
Digital’s window into the account for all of its transnational
concerns both as an end user and a CSO (CompleÂmentary
Solution Organization). When European, Japanese, Australian or
Canadian companies have U.S. subsidiaries, Digital sales and
service people in the U.S. not only need to deal with their
piece of the business, but also must supply information on
that account to other account team members worldwide. In other
words, U.S. sales is more than just U.S. It is account
management for whatever its accounts need worldwide, and
likewise in any geography. Everyone must put energy into
helping Digital win worldwide business. To help in this
effort, for the past year we have been working on such issues
as worldwide warÂranty, worldwide pricing and consistent
metrics for sales people and international sales credits.
With
international
sales credits, the sales team gets credit regardless of where
a partiÂcular piece of business was supported or occurred.
This is necessary to make sure our sales people do not
artificially impose our internal metrics on customers —
forcing them to place their orders in one country as opposed
to another, rather than supporting the customer in the way the
customer wants to be supported. For example, we cannot afford
to have competition between Digital Germany and Digital Canada
over who is going to get credit for a global order. In the
past, when we got into situations like that, we have either
given money in internal price competition or left the door
open for a competitor. Now, we have smoothed the procedures
and structure so that the sales team gets credit regardless of
where the order was placed and where the sales resources were
deployed.
The
pricing issue is very sensitive, because there is an enormous
profit impact to the company if that is not managed well.
Customers want stability and predictability as they lay out
projects that take a year to sell and two years to implement.
We have worked out mechanisms that will allow us to work with
them individually, to tailor a product (hardÂware, software
and service) pricing mechanism to respond to their needs.
We
need to help our account managers understand that different
prices in different counÂtries is a legitimate business
practice across the world. Consider, for instance, that the
cost of capital in the U.K. is 18%, and in Switzerland is 6%.
That means there is a different cost of doing business in
those countries, which is reflected in the cost of our
operations there and has to be reflected in the price of our
products.
Today,
the company is more aware of global issues. We are serious now
about breaking down "stovepipes," working collaboratively and
sharing systems. Digital worldwide is embracing account
management and presenting integrated behavior in front of the
customer. But, as we move ahead, we still have a lot of our
cultural and historical leftovers. Each area, each geography,
each function has a lot of investment in various information
systems and tools. At the seams and intersections between
these organizations and systems, there is enormous opportunity
for gains in productivity from bringing them closer together.
For
example, sales people in Europe use an electronic tool known
as ASSIST, while those in the U.S. use the Account Manager’s
Workbench. And sales people in the U.K. have a difÂferent
Account Manager’s Workbench. GIA is piloting use of the ASSIST
system from Europe. Also, the Customer Services organization
has a system called ATLAS. Every geography has different
terminology, different definitions, different management
structures — because these were developed as solutions to
local problems. In other words, there are several separate and
different systems that need to be pulled together to support
global account planning and management.
In
the product space, we need to find ways to better deal with
the global demands of our customers. The technical language
around the world is English. But now as Digital’s products
move into the infrastructure on which companies run their
business, we meet new and interesting requirements. For
example, Digital engineers in Japan developed a JapanÂese
language (Kanji) version of VMS software. But while this was
designed and is supporÂted on a local, country-level, we are
now getting requests for it from around the world.
At DECWORLD ’90
in Boston, Mass., we handled about 100 inquiries from
companies who want to get Japanese VMS software supported
outside of Japan. These companies are going to do business in
Japan or are already there and want support of Japanese VMS
software in Texas or California or New York. In other words,
we now have to be able to support Japanese VMS software
outside of the place where it was developed. And, in general,
we have to be able to support different language versions of
VMS software at the corporate level, so that we have support
for it across the world, as opposed to its being a local
option. Unless we start with that as the design goal, it gets
expensive to tack on such capabilities afterÂwards.
Meanwhile, at
the request of the U.S., Europe and GIA channel managers, we
also started a worldwide CSO pilot which is aimed at these
same issues of dealing consistently with international
customers. Europe, working with Pete Smith’s Product/Industry
Marketing Group, had already started a smaller pilot, to
determine the companies with which we should we engage
strategically as marketing partners and embed in our global
strategy. We merged with that pilot and are now working to
include these CSOs in our account planning processes as we do
business with end-user accounts.
There are 12
companies in the CSO pilot; and working with them, we have
identified the 10 key problem areas that these companies
wanted to see addressed in terms of working with us worldwide.
These issues are all variations on the same theme — how do we
work with Digital?
This CSO
activity is particularly important because more and more we
present ourselves to end-user customers with one or more CSOs,
in a complex, team-selling situation. In many cases, Digital
takes on the prime responsibility for a joint effort, or
agrees to work in full collaboration with the CSOs. In any
case, we have to be very clear about the value that each party
delivers so we can be consistent and clear in front of the
customer.
Basically,
Digital is moving up the value-added chain and many of the
issues we now strÂuggle with have to do with "softer" values.
We’re a full range vendor of products from desktop to data
center. We offer true multi-vendor networks. And we have
applications that run on multiple platforms. Those are all
magnificent accomplishments, but they are all "palpable"
products - "hard" kinds of values. Now we need to make
progress in the area of "soft" values, such as consulting,
service, environment, information management, expert systems,
manufacturing knowledge - all of which can be important in our
partnerÂships with CSOs.
For instance, as
a company, we have solved many manufacturing problems with
which our customers are just beginning to struggle. We can and
should charge for the help which we provide them in these
areas.
Basically,
whenever we tackle a difficult internal problem, our solution
can become a "product." Our tendency is to give that knowledge
away instead of packaging it and teachÂing our sales people
how to sell it. We’ve got a long way to go in terms of
discipline and training our sales people in how to recognize
these opportunities and pricing them appropriately.
For the last
three years, Corporate Administration has been making steady
productivity gains and cost reductions through consolidation
and by sharing resources and expertise. These structural cost
improvements were accelerated in Q4 of FY90, when a voluntary
tranÂsition program enabled us to quickly implement
consolidations that had already been planÂned.
The
following are examples of these important changes:
Security. In directly managing 10 million square
feet of space in the Maynard/Marlboro/- Merrimack Area,
Corporate Administration provides Security services, along
with a number of other services. Security services include
both day-to-day immediate local work at every site and
"one-place" work such as designing and servicing the security
system and providing security training programs. Previously,
each of three major geographic organiÂzations delivered this
work for its own geography. The consolidation of these central
security services into only one organization, covering all of
New England, resulted in saving $300,000 per year.
Property
Development. Two years
ago, Corporate Administration initiated a project with U.S.
Area Administration to analyze and subsequently consolidate
the work of their reÂspective property development groups,
which include real estate acquisition, design, and
development. The Corporate Administration group was located in
Maynard, while the U.S. Area organization had numerous
property development groups scattered throughout the U.S. An
intensive study resulted in the consolidation of all property
development groups into three centers in the U.S., at a yearly
savings of over $3 million, to serve the entire country.
Facilities Operations. Corporate Administration consolidated 11
facilities organizations into five during Q4 of FY90. The
facilities cluster group servicing the Maynard Mill complex
combined with Parker Street facilities cluster operations;
five clusters in the Greater Marlboro area combined into
three; and multiple management structures were brought
together. Some services changed, work was merged, redundancies
disappeared, and a level of management was eliminated. The
total set of consolidations, across 10 million square feet of
facilities, effects a savings of over $4 million per year for
the company.
Geographic
Shared Services. The
"sharing" concept grew over the
past several years, as independent facilities searched for
ways to maintain or improve services, while reducing cost.
Corporate Administration’s geographic shared services model
evolved, not only from added new space, but also from internal
initiatives by Digital organizations seeking to reduce their
occupancy costs by embracing the model and saving hundreds of thousands of dollars
annually.
Service Contracts. Consolidating service contracts has also
reduced cost. Selectively reducing the number of such
contractors makes it easier and less costly to manage such
vendored services.
Common Systems. Another important cost initiative is the
design and implementation of "common systems," replacing
multiple and duplicate systems that evolved over the years at
different sites. One example, now being implemented, is the
creation of one ordering and stocking system for stationery
supplies, replacing multiple more costly systems.
Utilization. Better utilization of the company’s space
has enormous cost reduction potenÂtial. Focused efforts to
improve utilization and reduce space invites creative thinking
about workplace configurations and more effective use of
Digital’s own networking capabilÂities. At the end of FY90,
the company occupied approximately 44 million square feet of
space throughout the world, at a cost of about $1 billion per
year. In New England alone, with 18 million square feet
representing 40% of the company’s worldwide total, Digital has
internal agreements and commitments to vacate 34 buildings
representing 1.8 million square feet; these reductions are
well under way and will be completed by the end of Q3. In most
cases, these are leased buildings, and vacating employees are
moving to owned, longer-term Digital facilities in the
immediate area. These facility consolidations should save the
company $40 million per year. Add to this another one million
square feet of space, not yet identified, which is targeted
for reduction by FY92, and you have another $30 million in
potential savings.
MS02. As one important example of improved
space utilization, consolidation, and cost savings, the MS02
facility was approved three years ago for construction.
Corporate Administration is now completing the construction
and fitup of this new 285,000 square
foot building on
the Powder Mill Road site in Maynard, Mass., for occupancy
this winter. This one new owned building will eliminate six
leased facilities and result in savings of $2 million a year
in facilities and occupancy costs for the company.
Employee
Involvement. Many cost
saving ideas have come from employees. For example, an
employee at the Mill observed that the "popcorn" packaging
material the Receiving departÂment discarded after opening
packages was the very same material the company purchased for
use by the Shipping department. The employee actually changed
the process, insured that the previously discarded "popcorn"
was moved from Receiving to Shipping, thus enabling Digital to
recycle the material and save money. This one idea saved the
company nearly $25,000 in one quarter alone.
Administration’s
Quality Program is at the heart of much of this work. That
Quality Program, built on the foundation of the organization’s
goals of customer satisfaction, employee satisfaction and cost
effectiveness, aims at continuous improvement through employee
involvement. These goals and the quality program they support
have served the company well over the past several years. They
should continue to provide a basic frameÂwork for future
changes that will enable employees in Corporate Administration
to achieve excellence in their work and to continue to
contribute to the competitive advantage of Digital.
Digital is
taking an aggressive posture in Central and Eastern Europe.
The first visible step was the opening of Digital Equipment
(Hungary) in April 1990, which today is already providing
services to customers. Now Digital is speeding to implement
its direct presence in other countries of Central Europe and
is evaluating an active relationship with the USSR.
Alberto Fresco,
vice president Eastern Europe and Countrygroup 2, has been
designated to lead this effort to open the market for Digital
in all Central European countries and the USSR, together with
the Countrygroup 2 Team.
In this
approach, the Country Development Group, headed by Yves
Sarrazin, reporting to Alberto, will keep and strengthen its
operational role and remains responsible for imÂplementing new
subsidiaries, conducting the operations and providing the
adequate support to optimize local results. In addition, a
dedicated European Liaison Office has been established at
Corporate, headed by Bruce Anderson, to facilitate and manage
the many linkages and support available in the corporate
groups.
Bob Hughes has
been named vice president of U.S. Sales, reporting to Dave
Grainger, vice president, U.S. Sales and Services. Bob’s
responsibilities will encompass the entire end-user sector.
National Account
and Regional Account Sales vice presidents will work for Bob.
He will also take the lead in the management of the Sales
function -- sales training, sales supÂport, and sales
productivity tools and programs. In this latter respect, Bob
will work closely with the Volume and Government Sales sector
managers to ensure the integration of the Sales function with
such areas as Sales Training, Sales Support, Sales
Productivity and Programs. He will continue to be a member of
the U.S. Management Committee (USMC).
"Over the past
year in the U.S. Field, we have built an organization in which
accounts form the basis for our business planning, budgeting,
investment, and return," Dave exÂplains. "This focus on
accounts and account management has been executed across the
U.S., with corporate and national accounts managed within our
account sales organization, and all other accounts managed
within districts and regions.
"One of Bob’s
most important priorities will be the ongoing emphasis on
account management and account profitability. Towards this
end, we will continue to build account focus within units and
districts wherever possible. Account managers will continue to
have the responsibility for budgeting and allocation of Sales
and Sales Support resources. Units and districts will maintain
their responsibility for the support and execution of account
plans and for the development of new business."
Pat Cataldo,
vice president, Educational Services and Jerry Montague, EIS
vice president, GIA, recently announced the appointment of Gen
Narui as director of Training and Education for the
General International Area. In this position, Gen is
responsible for strategies and support programs for employee
and customer training, as well as for ensuring that training
is integrated as a key component of Digital’s Enterprise
Integration Services offerings.
Prior to this
assignment, Gen was the director of Marketing for Nihon
Digital, based in the Tokyo. From 1983 to 1988, he was the
Japan Educational Services manager responsible for customer
and employee training business. Since joining Digital in 1969,
Gen has held a variety of other senior level management
positions.
Other recent changes in the Educational
Services organization include:
Roger
Blomgren has been named
U. S. Area Customer Education and Training manager for
EducaÂtional Services. Roger has been with Digital for 11
years and was previously GIA Area Education and Training
manager.
Barbara Bums has been appointed Office Applications
Training manager. She reports jointÂly to Pat Cataldo and to
Tom Richardson, Information Systems and Applications Market
Development Programs Group manager. Since joining Digital in
1979, Barbara has held several positions in product marketing,
sales programs, product management and human resource
management. Most recently, she was Sales and Marketing
Programs manager for the Aftermarket Software Business.
Paul
Ciardullo has been
named Corporate Customer Services Training manager. He has
been with Digital for more than 23 years, most recently as
District Customer Services’ manager in Connecticut.
Jim Malanson has assumed additional responsibilities
as Corporate Operations and Marketing manager for Educational
Services. Jim’s 21 years in Educational Services at Digital
have included Field, Headquarters and International
assignments. Most recently, he was CanaÂdian Educational
Services manager and Corporate Headquarters Operations manager
for EdÂucational Services.
Tim Walsh has been named Acting Corporate Sales and
Sales Support Training manager. Tim has been with Digital for
16 years and previously served as Corporate Marketing manager
for Educational Services.
Bobby
Choonavala, Managing Director for Digital Equipment Asia, has
announced that India and Pakistan have been added to the
former Far East region, which will now be known as the Asia
region. In terms of sales, Digital Asia has become the third
largest region in GIA, after Japan and Canada.
"Our fiscal year
1990 ended June 30 recorded a 24 per cent growth rate,
compared with about 15 per cent for the computer market," said
Bobby. This made the Asia region the fastest-growing region
for Digital.
He added that
India represents a billion-dollar computer market to Digital,
with a growth rate exceeding 30 per cent a year. Plans are
under way to start business in Burma, Sri Lanka, Nepal and
Bangladesh through the appointment of distributors.
One significant
multi-million-dollar contract secured during the year was to
provide VAX machines to automate securities trading for the
Securities Exchange of Thailand and the brokers through the
Chicago-based Midwest Stock Exchange.
To cope with
business expansion, Digital Asia will hire an additional 400
marketing/sales- /support professionals by the end of the
fiscal year, or an increase of more than 20 per cent. With
these extra staff and the employees in the five manufacturing
plants in Hong Kong, China, Taiwan, Singapore and India, the
number of Digital employees in the region will exceed 6,000.
Digital Asia is
drawing up plans to organize a DECworld show late next year to
demonstrate how Digital’s leading-edge technologies solve
business problems.
Bobby also
announced the setting up of two Asian Customer Centers — one
in Hong Kong and another in Singapore. The customer center in
Singapore will focus on telecommunications and financial
services industries, network technologies, office and imaging
applications. The customer center in Hong Kong will specialize
in the government, education and manuÂfacturing markets,
commercial and electronic publishing applications as well as
database and transaction processing technologies.
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