Conference 7.286::digital

>
>    My big question is why can't digital do some high level pep talks and
>    sell the company to all of these discouraged workers?  We are letting
>    ourselves feel we are going down the tubes.  We beat ourselves up
>    constantly and let the outside world beat us up every day and we DON'T
>    fight back.
>
 	Now it's second year our local office is getting rid of about 8% of 
	its employees. If this "June Bargain" becomes to a regular habit
	carried out every summer before holiday, I'm really afraid this
	will drive our moral down and increase the brain drain: the most
	capable ones get work somewhere else most easily. I'm not saying
	decreasing the number of employees isn't inevitable, but I'm
	worried about the consequencies of it. 

							Hannu	 

  Re .0 (Jon)

> My big question is why can't digital do some high level pep talks and
> sell the company to all of these discouraged workers?  We are letting
> ourselves feel we are going down the tubes.  We beat ourselves up
> constantly and let the outside world beat us up every day and we DON'T
> fight back.
>
> WHERE IS UPPER MGT AND THE PEP TALKS????  

  IMHO, far too much of "upper management" is in blind panic mode and full
  of ****.  Moreover, a large part of the company recognises this and even
  if the people concerned _do_ attempt a 'pep talk', they will not be trusted
  (and probably just be ignored).

  There are only a few high-powered people in this company that i) know what
  they are talking about, and ii) are trusted (=believed) by the rest.  When
  they speak, most people listen but if _they_ aren't given data that _they_
  believe, they tend not to bluster or waffle instead.  Hence there are few
  pep talks worthy of the name.

> My feeling is we should take our remaining cash ($1B still?) and start
> a large scale campaign to market the company to the employees. 

  NO !  The last thing we should do is spend our cash reserves on external
  "professionals" to sell DEC to DEC !  A long time before that, we should be
  getting rid of the people who are *currently* being paid *LARGE* amounts of
  money to do precisely that but who are skulking in the shadows, shrugging
  their shoulders, pocketing the cash and trying to decide when to jump ship.
  A little more "applied direction" at higher levels and fewer "body bags" at
  the lower ones until we have a continuous path of *reliable* people from the
  top of the heap right down to the bottom.

  Frank

    We still don't get it.  There is a new business model for Digital.  In
    it, most of us are excess baggage.  Digital is being as generous as
    possible, but we will be (almost) all leaving someday.  Digital is not
    going to design or manufacture computer products, except as needed to
    satisfy customers.  Digital is not going to design or develop software,
    except as needed to satisfy customers.  Digital is not going to have an
    air force or a trucking company or any other activities if they aren't
    needed to satisfy customers.  If we, personally and directly, don't provide
    something that customers need and are willing to pay for, we will
    eventually be downsized.  
    
    I'm sorry to have to say it, but everyone needs to understand the
    reality and stop dreaming!
    
    /rab

    re: .3
    
    And, in the Digital Services/EIS arena, the current emphasis is on
    selling integration services, etc.  We'll stock the project managers
    who'll organize the bodies who actually preform the work.  Maybe we'll
    stock a small number of "experts" who can speak to platforms x, y, and z
    simultaneously.
    
    But, it seems that we can't compete with many of the low-priced
    consultants who'll actually do the work.  I've heard people say that
    this isn't true, but I'm waiting to see what happens when the cuts
    start again.  Cutting DS/EIS bodies is cutting the revenue stream
    (people around here don't stay idle for long), so any significant cuts
    of specialists will indicate that we aren't needed in the long-term
    plans.
    
    Of course, I'd love to be pleasantly surprised and find that EIS cuts
    are light, but I'm not going to hold my breath.
    
    -- Russ

>    WHERE IS UPPER MGT AND THE PEP TALKS????  



Go Sell?

    
    Re: .4
    
    You've hit the nail on the head.  I replied to the note on
    PC wars the other day by saying that brutal, price-based
    competition will be dogging us every step of the way during
    this decade (PCs, Services, everywhere).
    
    I think that, eventually, services will be one of the
    toughest areas in which to compete.  Take a look at Public
    Accounting, Law, and other professional services.  The problem
    is that anyone who understands *how* you do your work, and,
    of course, has the specialized knowledge, has the potential to
    quickly become a low-overhead, low-cost competitor.  The barriers
    to entry in the services markets are *much* lower than in a
    manufacturing environment.  You don't need hundreds of millions
    of dollars to be a player; all you need is a PC and what's in
    your head.
    
    This is part of the reason that management consultants (e.g.,
    Booz-Allen, Boston Consulting Group, et. al.) require their
    consultants to sign draconian NCAs; hire young, brilliant people
    from top schools, work them 100 hours a week, and try like hell to 
    prevent them from using their specialized knowledge as a competitor.
    
    The NCAs in the case of consultants, and the government licensing
    in other professional services (with the exception of medicine), 
    are distortions that prevent completely free markets from developing 
    for knowledge workers.
    
    Turning a multi-billion dollar industrial company into a professional
    services firm (if that's in fact where we're headed), will be the
    challenge of the millenium.  And remember, the millenium is only
    8 fiscal years away.  As Bette Davis said, "fasten your seatbelts,
    its going to be a bumpy ride" (or something like that).
      
    Re: .0
    
    Jon,
    
    Not very peppy, I know.
    
    Glenn
    

    re:.6
    
    NCA = Non Compete Agreement  (Not usually upheld when challenged in
    court.)  How does a company prevent someone from exercising (perhaps)
    the only skill they have, especially after being fired?
    
    Richard B

    re: .7
    
    From what I read, you're right: the courts generally take a
    dim view of depriving someone of their livelihood.  I believe
    the consulting firms continue to fight, though, and the reason
    is that every low-cost competitor they've spawned is depriving
    the partners of the consulting firm of part of *their* livelihood.
    
    I suspect that if a consultant is fired, they've probably got
    a better chance of continuing to ply their trade than if they 
    resign voluntarily.  Also, the press periodically reports on
    gargantuan battles between partners leaving to form other firms,
    etc.  Nasty business in some cases.
    
    Anyway, this could rathole the discussion.  My real point is that
    competing in services is going to be *extremely* tough, which should
    probably come as no great surprise.  We just need to be sure we're
    prepared for it.  Clearly we must be learning -- we're making money
    at it, right?  
    
    When I look at the balance sheet, I see that the category "Services"
    represents a larger and larger share of revenues every year.  Does
    anyone know how that breaks down?  That is, how much of the services
    revenues (and, more importantly, the profits) comes from SI and
    consulting services as opposed to servicing the VAX installed base?
    
    By the way, the stock price just dipped below 35 according to this
    little daemon on my workstation.  
    
    Sigh...
    
    Glenn
    

Some people in EIS, a.k.a. Software Services have long held this fantasy of 
rising from the role of corporate black sheep to corporate messiah, IMHO.  
Eight of my 13 years were spent in EIS/SWS or whatever - basically in the 
field.  Somehow, we seem to make money at it, but I've always suspected that 
that was more the result of major shuffling of the numbers...  In fact, 
profitability numbers notwithstanding, we have rarely been any good at it, 
again IMHO.  I propose that if we are to bet the farm on our SI business, 
we are indeed in deep sneakers.  I think we would quickly become a minor 
market player, easily trounced by both the small-time specialists and the 
big-time, Big Eight.  We have no credibility, little true experience, and 
none of the requisite management direction to compete in this field as our 
primary mission in life.  Do we really expect to excel in the one area in 
which we have traditionally performed the poorest?  I mean, aside from  
marketing our own PC's, of course...:-)

I don't mean for this to reflect on our basic hardware service business, for
that may be the one service area where we have consistently done well, so long
as the customer isn't too picky about the actual service contract management.

Moreover, why on earth should a perfectly good manufacturing institution like
Digital drop the one thing it truly does well, and knows well, to follow the
dubious 'new business model' based on labor-intensive, high-overhead 
services?  What enlightened (new) management will direct this sprawling
army of high-priced experts? EIS? Right. Do we really think we're prepared 
for this?  Go ask any current, long-standing customer how they believe we 
stack up in the services market.  Ask them what they think we do well...and 
see if the word service even comes up at all. 

Finally, the last thing this coutry needs is the further erosion of our
manufacturing base, in deference to an already bloated Services industry.
No, we must not abandon our true expertise, for it is our only leverage in 
a competitive market.  If anything, we should trim the areas in which we do
not excel, including EIS, and focus on improving the quality and marketability
of our products, reducing overhead to withstand shrinking margins, and 
develop a more enlightened approach to the management of these people who
can deliver the highest quality products in the world.

We got big, fat and sloppy.  We need to clean up our products.  Fast.

tim

    re: last
    
    Sorry, but you are *way* off base.
    
    1.  First, we are already ranked by analysts anywhere from 3rd to 5th
    leading systems integrator in the world.  These rankings are usually
    based on $$, but at least one ranking (the #3 spot, actually) factors in
    customer satisfaction.
    
    SI is complex, which means that there will be difficulties along the
    way, but that does not mean that we are not good at it.  In fact, in
    the last year, I've heard of 2 or 3 cases in which major corporations 
    dumped our primary competitor (in one case, told them not to bother to 
    respond to any more RFPs) and came back to us after getting burned by 
    the "leader" one too many times.
    
    The SI business has continued to grow in proportion to other service $$
    and profitability in the last year has increased tremendously, from its
    flat to -1% 2-3 years ago to something like 5% profit in the last 
    (calendar?) year.  As we get better at selling and delivering it -- and 
    as we begin to reap the spinoff biz that almost inevitably occurs (and
    has a much lower cost of sale) -- I expect that profitability will 
    continue to improve.   For example, a recent $7.4M SI program (which will
    appear in "digital today" in a week or two) has left the customer so
    happy that it led a follow on deal worth an estimated $60M+.
    
    2.  When the new systems sorted out the numbers, the company discovered
    that the services business has been virtually carrying the company for
    the last several years.
    
    3.  HPS (servicing hardware) until very recently was perhaps the most
    profitable service with the biggest revenue and was very likely the 
    business that kept the company above water for the last several years.  
    However, as hardware prices continue to dive, it has become cheaper for 
    customers to buy new systems with warranty and extra power than to 
    maintain old systems.  So HPS profits cannot be expected to continue to 
    carry the company.
    
    Services revenues now account for just under 50% of Digital's revenues. 
    I believe that SI and consulting combined are about 50% of that.
    
    Mary

re .9;

I believe you are essentially correct (SI ain't the requisite miracle).  This 
isn't because we (EIS/SWS) are incompetent in this area.  I believe that the 
people we have, with the proper investmant in training could be VERY successful
in the SI arena.  However:

	We won't ever get the proper investment due to the general short-term 
	thinking that pervades this company.  Folks like Anderson appear to 
	spend 3 or 4 times what we do in staff training.  They also are 
	willing to tolerate lower utilization rates and, as a result, can have
	a project team on site and working before the customer is aware he's
	bought the project.

	Customers aren't yet willing to trust a hardware vendor to provide the 
	lowest cost solution (even though we all know that the opportunities to
	save  money on hardware is diminishing).  Perception, unfortunately, IS
	everything.

	We are rapidly destroying our ability to provide the very services 
	that customers ARE willing to buy from us -- product- or application-
	specific expert consulting.  This sort of work provides a basis for
	relationship-building on the technical level that can provide the 
	necessary level of confidence for larger efforts.

All these problems seem to stem from a major fallacy in our thinking -- that
WE can decide what our business model is.  In services, more than in any other
area, the customers are in total control.  They know what services they are 
willing to pay for.  If you won't sell it, or aren't organized to provide it 
economically, there's someone else who will.

I remeber a science fiction story I read years ago about an outfit named
General Services, Inc. (or some such).  The corporate motto was

	"WE ALSO WALK DOGS..."

\dave

    re: .9
    
    The Big *6* stopped being the Big 8 several years ago.  We only have 3
    real competitors in the Big 6 -- Andersen, EDS and CSC (not
    necessarily in that order).  And we have been winning against all 3 of
    them.
    
    Mary

    
    This discussion has veered from the original topic but nevertheless
    is of crucial importance to the future of this company.  How about
    starting it as its own topic....moderator???
    
    A prime example of what is currently being debated is the COPS proposal
    for the Fingerhut Corporation.  Many of you might know about it as it
    was the topic of its own conference.  A fuller accounting would be very
    enlightening but it would take away from the intent of the basenote.
    
    Again....how about a separate topic...or does this exist elsewhere?
    

    Dave, there are a number of ways to defuse the hardware bias myth:
    
    .  our competitors are more likely to recommend hardware for which they
    have "benchstrength" (in the case of Andersen, 80% of their biz is on
    IBM platform) -- not necessarily in the customer's best interest.
    
    .  our competitors are starting to *openly* take profits on 3rd party
    hardware (what little profits there are).
    
    .  on any program, the fewer subcontractors there are, the lower the
    complexity and risk.  Choosing Digital limits the number of subs.
    
    .  Digital offers something like 1000 3rd party products from 800 3rd
    party vendors.
    
    .  The fact that Digital is an engineering/manufacturing company gives
    us "real-world" experience that the Big 6 doesn't necessarily have. 
    THe same manufacturing consultants that have designed our facilities
    are involved in customer engagements.
    
    Also, Digital has been winning in the multivendor support arena -- we
    service 3rd party products.  We recently integrated 400 Sun
    workstations in one of our programs.
    
    Mary

    in general re .14 - Mary, it's clear you're convinced.  It's not clear 
    you need to try to convince us although it seems you are trying.
    
.14>    Dave, there are a number of ways to defuse the hardware bias myth:
    
    take it to MARKETING, there's no need to worry about mythology (or,
    customer belief systems) here.
    
.14>    .  The fact that Digital is an engineering/manufacturing company gives
.14>    us "real-world" experience that the Big 6 doesn't necessarily have. 
.14>    THe same manufacturing consultants that have designed our facilities
.14>    are involved in customer engagements.
    
    Um, don't we lose that if we get out of the engineering/manufacturing
    fields, as suggested is happening by the post that started this
    tangent?  Could we be so hell-bent on pursuing the services business
    that we undercut one of our advantages in that market by cutting the
    resources that help us be successful there?

    re: .11 (short-term thinking, lack of training)
    
    This is definitely a problem.  The messages from above keep talking
    about striving to be "best in class".  Nonsense.  The DS/EIS
    organization has spent much time insuring that we CANNOT be "best in
    class".
    
    When you are selling a person's knowledge and ability, preparation and
    training are key.  Training is the R&D of the consulting business.  Don Z 
    realized the need for this and said "ye shall have training".  Problem is,
    we still go into opportunity after opportunity without preparation.
    
    "Get in there now, we'll get some training for you a bit later."  
    "But we've ALWAYS done on-the-job training.  Get used to it!"  
    "Oh, yes, we're striving hard to be best in class!"
    
    Horsepucky.
    
    We wouldn't know "best in class" if it cut off our legs with a chain
    saw.
    
    I remember what it was like to be a customer.  You'd wait WEEKS
    for a sales rep to locate an appropriate technical person (now I know
    why:  we have to keep close to 100% utilization at all times).  Then,
    the person would show up knowing NOTHING about your particular
    situation and needs (because they just left their previous assignment
    perhaps moments before, or maybe they're working BOTH assignments at
    once; no chance for ramp-up, no chance for issues, no chance for
    investigation of any kind).  Next, you find out that they're learning
    on your nickel ("We've got to hold down the budget, so I have to wait
    for the next local training class in about 3 months").
    
    Very little has changed.  It may bring in profits (at our incredibly high
    rates, it HAD BETTER!), but "best in class"?  Never.
    
    Maybe someone figured out that we can get about the same results by
    pulling in contractors.  We'll see what the new fiscal year brings...
    8^(
    
    -- Russ

    The people who learned about manufacturing work there (for now).  Those
    who go to classes learn what the classes have to teach.  There is
    overlap, but lots of things are missed in the classes.  Those who
    learned the most don't get the greatest visibility, so... When asked
    about manufacturing expertise, we can send someone who has only book
    learning.  BTO has tried to sell the expertise its folks developed over
    the years.  Someone there can tell you about the success rate.  From my
    perspective, the sales and service organization has no tool to identify
    the real expertise in our (temporary) manufacturing organization.
    
    /rab

    re: .15
    
    I have no idea what you are talking about.
    
    < It's not clear you need to try to convince us
    < Take it to MARKETING, there's not need to worry about mythology
    
    I was responding to Dave's statement.  If he and others can make
    statements about customer belief systems in this file, than I certainly
    can respond.
    
    And if others can spread myths about how we can never consider
    ourselves a world class systems integrator, let alone compete with the
    Big 6, then I most certainly can respond with the fact that we are
    successfully competing against them.  
    
    I have 6 win stories in various states of review -- all wins against
    the Big 2 of the Big 6 -- in my account right now.  And the marketing
    folks I support are chasing after interviews with more than a dozen,
    even as we speak.
    
    RE: manufacturing -- The $64K question is does being in manufacturing
    help more than it hurts?  Beats me.
    
    Mary

    re: .17
    
    The expertise at BTO was critical to winning the $50M+ Boeing SMARTS
    program (which has since led to at least 2 follow-on deals).  Also was
    important to $21M program at New Venture Gear.  Don't know how many
    others.
    
    Mary

    
    Small nit Mary but the "BIG SIX" do not include EDS or CSC.  They are
    Andersen, KPMG Peat Marwick, Coopers & Lybrand, Deloitte & Touche,
    Ernst & Young, and Price Waterhouse.
    
    John

    >                   <<< Note 1963.19 by CARTUN::MISTOVICH >>>
    >    re: .17
    >The expertise at BTO was critical to winning the $50M+ Boeing
    >SMARTS program (which has since led to at least 2 follow-on deals).
    
    I worked at SMARTS ! Iam glad to hear it led to more work for DEC.
    
    /nasser

    re: .20
    Picky, picky, picky!  ;-)
    
    But you're right.  However, the "Big 4" in SI are Andersen, EDS,
    Digital and IBM.  Any win against that competition is significant.
    
    Mary

	The trouble with the way we define "SI" is that ANYTHING that
	doesn't involve hardware gets plugged in the SI box.  Then we 
	run about the {office | unit | district | area | country} talking
	about how "hot" we are in SI just because we sold an 80 hour
	contract programming job (for example).  Clearly what Mary is
	is describing IS, in fact, SOLUTION or, if you prefer, PROJECT
	work where Digital's helps define a customer's business problem,
	designs a solution, and implements the solution.  This is SI
	as most people would describe it.

	There's not doubt that when BIG corporations want strong partners
	(like the big {2,4,6,8}), it's only natural that DEC should be
	a player.  However, when the well begins to dry up on the BIG
	deals, will we be able to win the small deals that the non-big N
	bring home ?  (Forgot, the question is why is it that the SI
	deals are always > $10-80m and you seldom read about SI "wins"
	that are not in that range ?)

	The part I worry about is our ability to provide the industry
	specific "visionaries" and consultants the market will demand
	if your SI business is to sustain growth.  We should be strong in
	manufacturing, distribution, and networking.  But in other areas
	of opportunity such as healthcare, do we have the people to give
	us creditility in this market ?  In either case, the longer term
	BIG projects suck up these resources.  If we are to maintain
	growth, it seems that we need to be acquiring and training these
	people now.

	-- gerry 
	

.17>                        -< just a taste of sour grapes >-
.17>    The people who learned about manufacturing work there (for now).  Those
.17>    who go to classes learn what the classes have to teach.  There is
.17>    overlap, but lots of things are missed in the classes.  Those who
.17>    learned the most don't get the greatest visibility, so... When asked
.17>    about manufacturing expertise, we can send someone who has only book
.17>    learning.  
    
    Don't let the one taste sour you on all grapes.  
    
    Training is a very important part of the investment in personnel
    resources.  (Of course,  if investment in development and maintenance
    of the personnel resource  is neglected in the interest of increased
    utilization then training  becomes a negative factor by decreasing
    utilization even if it increases efficiency/effectiveness.)  I believe
    there is a very high ROI on training, based on personal experience:
    
    I hired into Digital over twelve years ago as an instructor teaching
    customers and software services.
    
    It seemed ironic that I was hired specifically to teach courses
    I had never had when I was learning the material I was hired to teach.
    
    Then I realized it took me over two years to learn what the courses
    taught in six weeks.
    
    And when I taught them I discovered that the quality of my knowledge
    was not the same as that gained from the courses.  (I figure it took 
    me another six months or so to fill in the gaps.)
    
    You see, courses (or any book learning) give a structure and framework 
    to the knowledge that ties it together and relates it all at a high level. 
    They do not delve into the myriad of specific minute details that are
    involved in actually using any reasonably complex piece of technology, 
    but they do provide the foundation to acquire and use the details much
    more efficiently than is possible without training.
    
    BTW, I moved from customer training into central engineering after a
    couple of years.  Now I have been involved with the same software
    product as an OEM customer, an end-user customer (direct and via an
    OEM), a training instructor, and a development engineer, over a total
    period of approximately 15 years.  I feel I have gained some
    considerable understanding of the product lifecycle and the different
    perspectives involved.  Based on that experience, I am convinced that 
    skimping on training is a false economy that costs more than it saves 
    even in the short run.
    
    --bruce

.3>    We still don't get it.  There is a new business model for Digital.  In
.3>    it, most of us are excess baggage.  
    
    Right on, so far.
    
.3>    Digital is not
.3>    going to design or manufacture computer products, except as needed to
.3>    satisfy customers.  Digital is not going to design or develop software,
.3>    except as needed to satisfy customers.  
    
    Oh oh.  
    
    How is Digital going to do those things for customers without any Digits?
    
    Maybe that excess baggage wasn't excess.  Maybe it was a tool box, or a
    dittybag, or a resource inventory?
    
.3>    If we, personally and directly, don't provide
.3>    something that customers need and are willing to pay for, we will
.3>    eventually be downsized.  
    
    Oh good.  That means the steady stream of phone calls and messages from
    and about real live paying customers means my job is secure.  
    So why am I still looking nervously over my shoulder?????  

    
    As awful as some of the prior entries seem, at least they are the
    truth. 
    
    As someone who has been delivering this EIS/SI/SWS stuff for 6 years, I can
    tell you we stink at it. I don't care what the 'Industry Analysts'
    say. I can tell you first hand that most of our EIS/SWS/SI business
    is so totally disorganized and haphazard that it has been a miracle
    that we have made any money. And I am talking about the 'Successes'
    and 'Big Wins'. 
    
    Yeah we have some talented and dedicated individuals. But we have
    no concept of how to sustain this business, and the talented folk
    are not calling the shots. 
    
    Part of the problem is that we get too many PEP talks; there is
    too much self congratulation. No one wants to face the fact
    that there are too few delivery people; and those there are have
    to wrestle with an unweildy organization. 
    
    So, instead, we listed to PEP talks, and wave banners like "DEC Value
    Added", or "Leverage Expertise". Time to face the facts.
    
    
    I guess this is nothing new.
    
    I am sure the author of .0 was trying to improve morale, and that is
    great. The company needs more people who care as much as author[0]
    apparently does.
    
    But as long as we are rolling around in the dirt, lets get a few things
    fixed around here. We can start by fixing the SI or services business.
    Damn it.
    

     
    PEP talk wont help, the problem is not local, it is global, PEP talks
    wont change anything.
    
    The economy in the country is bad, granted, few other computer companies 
    might be in better shape, but that is for short term, if people have no 
    money to buy computers and software, and have no business to use the 
    computers for, then no matter what you do, it wont help, because no one 
    will come and buy.

    i predict a big depression that will last for a decade..

    and dont ask me how i know this, it is just what i think will happen,
    no more..

    but look at the bright side, 10 years from now, things should start
    improving, and DEC stock stock by then should be back up ...
    
    think loooong term.

    /nasser

    10 years of depression?!?!?  I know you said "don't ask", but I have to
    ask what gives you any idea that this is around the corner?
    
    And when we tell people to think long term, it is usually to think long
    term in the positive.  10 years of depression is not what I think of as
    positive, no matter what happens after that.
    
    Positive talk - or visioning about one's future - can be a positive first
    step to recovery, either as an individual, organization or company.  I
    find that it is an enabler ... your mileage may vary.  I think a PEP
    talk from our leaders may help, but I first have to ask who are our
    leaders right now?  And I am not refering to the BoD, KO or the VPs
    throughout the corporation, I am talking about the strength of each
    organization that makes up this company.  I used to be able to go into
    any DEC office and pick them out - now I am not so sure.
    
    I read an interesting book lately about the writings of Reinhold
    Niebuhr.  He was a modern day theologian.  He said that there are
    really only two types of sin, the refusal to relinquish power and the
    refusal to claim it.  I think we are suffering from both of those ills
    as a corporation.
    
                      

    This is my last day and some months ago I came to the same
    conclusion as .3.
    
    DEC is going into new business areas and unfortunately due to the
    low margins in them we cannot be as manpower intensive as in the
    past.
    
    I also agree with Steve that the Corporation is unprepared because
    it is having to do something a) It has not only never done before
    but never contemplated doing and b) that due to its principles it
    has held off from doing until the situation has become very, very
    difficult to manage.
    
    I've even seen some notes where the Corporation is accused of being
    short sighted because eventually it will have to re-build its labour
    force.
    
    Perhaps this is true for certain small numbers of very specialised
    and high level technicians but for the majority of us it just ain't
    so.
    
    DEC needs to become lean and mean and stay that way if it is to
    survive.
    
    After more than 15 years here I'm sorry about it on a personal basis
    but that doesn't stop me from seeing reality.
    
    Max 
    

re: .0, Jon

Pep Talks? With the past two years of experience under our belts watching
the company trickle people away in this aimless fashion with no apparent
understanding (or statement) of what the final goal was? With no apparent
willingness to be done with the trickling exercise? With no ability to
say that we won't trickle ourselves out of business?

I'm sorry - I just can't fathom any pep talk that could be formulated that
would have any credence. "Let's win one for the Gipper, and, oh, by the
way, watch for the next TFSO coming to your neighborhood."

The best that could be done at this point is to just out-and-out lie to
us - that's about the only thing that hasn't been tried yet.

re: .27, Nassar

Bright side? Ten year outlook? Tough to do when chances are one may be
out of a job, personally bankrupt, and quite possibly suicidal before then.

re: .29, Max

Sorry to see you go. Best of luck.

-Jack

    re .27
    
    Nasser, 10 year depression? Get real. This is a recession, it is like
    the many recessions that have passed before it... It is cyclical in
    nature, and not likely to last much longer. DEC should be girding its
    loins for the trip out of the recession, but I fear, we will keep the
    "down" mentality long after our competitors have realizaed otherwise,
    and are slicing into our market share.
    
    q (Who has a degree in Economics...)
    

    Nasser may not have the same reasons for his statement, but I'll give
    you my reasons for believing that the "recession" will last a lot
    longer than we would prefer to believe.
    
    1) The U.S. economy has not found a replacement for manufacturing as
    the prime engine which drove our progress until about 1960.  Digital
    top management understands this much better than our political
    leadership.
    
    2) We have overgrown our capability to control a) our cities, b) our
    national government, c) our manufacturing companies.   Again, Digital's
    management understands this better than the public sector decision
    makers.
    
    3) We are so large and diverse an economy (company) that no central
    control can possibly be successful but that seems to be the model that
    many people are calling for.  We need to learn how to manage
    decentralized authority in the political and economic sphere.  Again,
    Digital has learned more about this than the rest of the country (thru
    the school of hard knocks, I might add).
    
    4) We are slow to learn important lessons like these.  Until we can
    reduce the dissension due to people hoping for miracles, we won't get
    back to work making money.  
    
    fwiw,
    
    /rab

    re: .31, .32
    
    The United States is not in recession, it is in recovery, using the
    ordinary definition by economists.  Full-time employment hasn't
    returned to the level of three years ago, but this is DIGITAL, not a
    semantic quibble over what it meant by recession. 
    
    Certainly in the computer industry, there is no recession, there is
    growth.
    
    All of Digital's major competitors had sales growth in Q1 and were
    profitable, and Q2 looks betters for them.  This selective "recession"
    only affects Digital.
    
    Where is the message that will inspire us to endure this, and work
    harder?  There's never a period where inspiration isn't welcome.
    
    What is Digital's plan to restore profitability and growth?
    
    Next week after Q4 is closed, let's see wait and hear.

    
    re: - many
    
    Jeez, you folks are depressing me :-(
    
    Here's what I think (FWIW):
    
     1. The US won't go down the tubes.  The world can't afford
        to let a market of 260M+ people sink to a point where
        no one can afford to buy Toyotas and BMWs (i.e., no middle
        class).  The Japanese can't afford to let that happen, nor 
        can the EC.  The US has been the "open market of last resort" 
        for developing countries for 50 years.  Japan will slowly, but
        inexorably, come to the conclusion that her markets must be
        opened.  Cooler heads in the EC will also prevail, and they will 
        back off the idea of "Fortress Europe".  To paraphase Lester
        Thurow: we won't be writing the trading rules, but we'll be a
        major player.
    
     2. What we are experiencing is the demise of a heavily industrial 
        economy and the rise of an information economy.  NB: this *does not*
        mean that manufacturing will go away.  What it *does* mean
        is that the manufacturing component of the information economy
        will radically change, the information component of everything
        we make (Cars, microwaves, phones, TVs, etc.) will increase,
        and the information we need to do it competitively will also
        increase.   
    
        Since the only way to maintain a middle class in a country of 
        this size is to retain a manufacturing base, this will, of 
        necessity, occur.  But, and this is a big but, the people who 
        keep their jobs will need to be highly re-trainable.  And 
        terribly gutsy to withstand the terror of the changes.  
     
        While our leaders in Washington do not yet see this, the leaders 
        of the EC and, especially Japan, do. (Why else would
        they keep lending to us? :-)) 
    
    3.  Digital won't go away either (he predicts, taking a deep
        breath).  One of the things we have going for us is that
        we (as well as HP, IBM, etc., etc.) probably have among the best
        trained (experientially and formally) workforces in the
        country.  I figure that, collectively, we must be in the 
        top 5% of the total population.  I think we can be re-trained 
        (and I mean substantially *all* of us) to work in an information 
        economy, in one capacity or another.  
    
        So, Jon (.0), this is as peppy as I can be right now:
    
         o  Manufacturing will rebound in this country.
         o  Digital employees (and ex-employees), in all probability
            will become reabsorbed into the economy, both here at DEC
            and other places.
         o  We will not have a worldwide depression.  The economic
            information we possess is better than it used to be,
            we know how to react to recession, the world is too
            integrated and enlightened to let it happen.  Except, 
            *maybe*, for Washington.
         o  International trade will continue.
         o  Digital will recover.
         o  We will stop making so many lawyers, and make more
            scientists and engineers.
         o  My name is not Pollyanna.
    
    Set all flames, derisive laughter, and comments about Santa
    Claus and the Easter Bunny to /dev/null.
    
    Glenn                                 
    

    Nice note, Glenn....did you read Toffler's "The Third Wave" and
    "PowerShift"?  He basically says the same thing.
    
    Mark.

    re: .35
    
    Yes, read them both, and thanks for the compliment.  Both of
    those books heavily influenced my thinking.  I hope
    he's right.  For further interesting reading, especially
    about international trade and the importance of manufacturing,
    Lester Thurow has words of (I think) wisdom.  His latest, "Head
    to Head", is really well done, in my view.
    
    Glenn

<<< Note 1963.34 by BOOKS::HAMILTON "All models are false; some are useful - Dr. G. Box" >>>
>                        -< Its not all gloom and doom >-
>         o We will stop making so many lawyers, and make more
>           scientists and engineers.

    oh, no !   not the .."make more scientists and engineers."  story 
    again!

    make them so that they do what ???

    US schools roll out 1000 PhD per year as of last I've seen.
    do you have jobs for all of them?

    a typical research opening for at the PhD level draws about 500
    desperate PhD applicants, looking for jobs.

    people with PhD's are driving taxi cars in southern California to make
    a living.

    we have more scientists and engineers than we know what to do with
    them.

    the problem is that there is NO DEMAND, the only time we could use more
    scientists and engineers is when there is a DEMAND.

    this tone is only good for politicians on TV who tell children to study
    science and engineering so that the politicians can get elected, what they
    dont tell children is that once they become scientists and engineers
    they'll have no jobs for them to use their science and engineering at.
 
    if i had a child i'll tell them to go to acting school, or learn
    basketball, or tennis, or night club bouncer, or something more promising 
    like this...

    thank you for giving me the opportunity to express my feeling on this
    subject.
    
    /nasser

re:-1 

I agree, engineering, manufacturing and science are domains of other countries.
It's all over but the final tally.

Popular culture is all we have left.  That means:

Batman, Disney and Levis...

I hear there are plenty of job openings at Euro-Disney...

		Bob 

    
    re: .37 
    
    Of course, Nasser.  Last time I looked at the Boston Globe
    classifieds, there were definitely more ads for actors and nightclub
    bouncers than there were for engineers.  Tennis players are claiming
    a premium, too.  I *heard* there was an opening for a pro
    on the PGA tour, too.
    
    For every politician you hear telling kids to study science
    and engineering, I'll find you a *hundred* slick sneaker ads
    telling kids in the inner city that they'll be basketball stars
    making millions.  For every politician telling kids to stay
    in school and study engineering or science, I'll find you *five
    hundred* MTV spots implying they can make it as a rock star.  When
    you see an engineer on TV, he or she is wearing thick glasses,
    has no humanity, and wears a pocket protector; when you see a lawyer,
    he or she is driving a Porsche and drinking yuppie water in a fern
    bar.
    
    The reason PhDs go begging is because this country is anti-scholarship,
    and anti-intellectual.  There was a time in the not too distant
    past when it was a *liability* to have a Phd if you wanted a
    successful career in business.  It will take time for this attitude
    to work its way out of the system.  If it doesn't, there won't be
    a system.
    
    The reason that demand (for PHds as well as everyone else) is low is 
    because of a cyclical business downturn that (unfortunately) coincides 
    with a structural problem at Digital.  That coincidence colors all 
    our perceptions.  We are not in a 10 year depression, the coming of 
    the millenium does not signify the end times, and things will get 
    better.  When they do, those who have invested in themselves, 
    realistically, and worked hard (i.e., PHds and others) will be 
    in demand.
                                                  
    Glenn
    
    

  As long as this has become the economic opinion note, here's my 2 cents
followed by a pep talk.

The U.S. Economy Part
---------------------
  Capitalistic economies always go through periods of expansion and recession.
The bigger the expansion, the bigger the recession that follows. During the
'80s, the decade of excess, we created the illusion of growth by borrowing 1.5
trillion dollars from foreign banks and dumped it into the economy. 

  Only rather than using it to improve our ability to do business so that we
could pay the debt, we used it to build a massive war machine that is all
dressed up with no one to fight. The money then went on to create jobs which
enabled U.S. citizens to raise our average standard of living to a point that
can't be supported without further borrowing. Since we can't borrow (at least
not like we did in the 80s) our standard of living has to go down, hence the
recession. 

  The recovery we are in now is a temporary election year recovery which is
being created by the largest deficit (read more borrowing) in our nations
history. We will have bad times ahead correcting for our high standard of
living and depending on who gets elected those bad times will take a different
form. If it's Bush it will be recession. If it's Clinton it will be inflation.
If it's the "parrot", who knows? 

The Digital Problem Part
------------------------
  This economic gloom is part of the Digital problem. The other part is that
the mini-computer industry, of which we were the number one competitor, has
disappeared and we are scrambling to get into other parts of the data
processing industry.

  This means restructuring the company and trying to play catch up in areas
that others have been working in for a while. It's not so much a lack of
vision, but a lack of being able to understand what our vision is showing us.
We can see the other parts of the computer industry but we have to learn how to
make money there. 

The Pep Talk
------------
  The one area in which Digital and I disagree with is that this is not a time
to shrink to become profitable. Since we are trying to enter a new part of the
industry, this is a time that we should borrow money and try to expand. Only
unlike the U.S. in the 80s, we should invest that borrowed money into new and
better products so that we can make money in the new part of the industry which
we are trying to enter. 

  You shrink to become profitable when you want to stay in the same industry
and beat out the competition. For Digital this makes no sense since our
industry, the mini-computer industry, has gone away. When you want to do
something new, you have to invest in new technology. That means borrowing and
expansion. 

  George

    Interesting ...
    
    I have lived on both sides of the Atlantic, and I find some of the
    rhetoric really quite recursive ...
    
    In the UK ... we need to spend more on R&D and to train more Scientists
    	and engineers like Canada, Europe and the USA do.
    
    In Europe ... we need to spend more on R&D and train more scientists
    	like Britain and USA
    
    In Canada ... we need to spend more on R&D abd train more scientists
    	and engineers like Britain and the US
    
    In the USA ... we need to spend more on R&D and train more scientists
    	and engineers like Canada and Britain
    
    
    Or to put it another way ... this is all political bafflegab and has
    very little to do with the reality of the situation.
    
    What we all need to do is realise that markets for goods and sevices
    are not limitless and then study all the ramifications of that.
    Just because we now have a bigger and better widget does not mean
    that we have a market for them.
    
    Stuart
    
    

    The myth that governments and big companies can really do anything
    effectively dies hard.  Any organization beyond the size where
    face-to-face or handshake-to-handshake communication are possible is in
    trouble.  It doesn't matter whether it's organized as a "strict
    hierarchy" or a "distributed decision network", the extra people in any
    communication loop slow down the flow of information.  The small
    organization, managed by the same people who do the work, has a
    reflex-speed advantage that offsets the economies of scale of the big
    organization.  
    
    Consider what the situation I will be in once Digital gives me my
    "divorce-papers".  I will decide what customer to approach first, what
    strategy to use, and I implement that decision, almost imperceptibly. 
    No meetings, no presentations, no approval chain, no formal trade-off
    analysis.  I just make the decision, take the gamble, and commit myself
    for working for this customer.  
    
    Digital and other large corporations and governments are great for
    exploiting economies of scale and manufacturing and selling
    commodities, IF THEY KEEP THEIR OVERHEAD COSTS DOWN.  But they can
    never compete based on flexibility, customization, short decision
    cycles.
    
    fwiw,
    
    /rab

    
    In reference to the statement "the mini-computer industry, has gone
    away" in note .41, the author should tell IBM and HP. HP mini sales
    are up. IBM, now the world's largest supplier of mini computers, is 
    selling 14 t0 15 billion dollars worth of AS400's a year. The AS400's
    operating system is proprietary too. Think about it, IBM's mini
    business is bigger then Digital and alot bigger than all the UNIX 
    business put together. Just think how much they could sell if the
    mini business wasn't dead.
    

  But is the AS400 really a mini? We have mid range systems too but by the
standards of the 60s and 70 when minis were in their hay day most machines
today would either be considered desk tops, super computers, or both. 

  When you start measuring memory in "megs" you hardly have a mini. To me a
"mini" is a small machine with a general purpose operating system that is
somewhat limited in speed and functionality due to a small memory size and a
small word length which limits the address space. Does the AS400 really fall
into this category? 

  George

    re .45 - As I understand it, the AS/400 is pretty much analogous to VAXen 
    in terms of market, capabilities, etc.  Thus, yes, it is a minicomputer.
    
    The earlier comment about the demise of minicomputers was addressing
    Digital's business woes, and the failure of our "one strategy, one
    product" decision (sometimes known as "one egg, one basket" around
    here) to avert them.  
    
    In that context IBM's AS/400 sales are a clear rebuff to the contention
    that the death of the minicomputer is the reason for Digital's
    inability to continue riding the VAX to ever greater success.
    
    Let's face facts.  Over the past several years our corporate
    organization has become increasingly less able to compete successfully
    in the computer systems business.  We can blame the death of the
    minicomputer (ignoring IBM's AS/400 success) or the recession's effects
    on the computer industry (ignoring the success of most of our
    competitors), or the transition to a service and systems integration
    business (ignoring the question of who builds the systems to
    integrate!) - but that doesn't change the facts!
    

    RE: .40 Glenn,
    
    So the answer to our problems is more Phd's?  You've got to be joking.
    
    
    Mike

    
    re: .47
    
    Not necessarily, Mike.  The answer to our problems (IMHO) is more
    education and training at a variety of levels.  I used PHds as
    an example only to respond to Nasser (see my original comment in
    .34).  
                                              
    I believe, quite fervently, that we need to develop more engineering 
    and manufacturing capability in this country.  In the 1960s, our most 
    highly talented young people were incented, by high salaries, to go 
    to Madison Avenue; in the 1970s-1980s, to Wall St. (law and investment 
    banking).  It has been many years since manufacturing (probably since 
    just after WWII) has attracted our best and brightest.  I believe it 
    is more than coincidental that the zenith of our industrial capacity 
    was probably 1955.  I only hope that 1990 was the nadir.
    
    It may be that the complexities of modern economies simply overwhelm
    my cognitive capabilities, but for the life of me, I cannot conceive
    how a country of this size expects to keep a middle class without a
    manufacturing base.  What will *most* people do?  And without a
    middle class, as I noted earlier, we ain't going to be buying 
    $16,000 Toyota Camrys...never mind $30,000 BMWs.  But I digress.
    
    So, the answer is not necessarily more Phds;  We need an educational
    system that supports the development of more and better engineering
    talent, more and better NC-trained machinists (i.e., an improved
    vocational training curriculum (an area where Germany excels, by the
    way)), more and better process engineers, more and better software 
    engineers, more and better manufacturing engineers, etc., etc.
    
    We also need a society and a government that values those skills,
    and is willing and able to provide the financial incentive to
    attract the best.
    
    I would like to make one more point, and drag this conversation
    back to the Digital realm (although it never *really* left it).
    One of the reasons Fortune 500 companies (most of Digital's customers)
    have not been buying new equipment is because of the need to pay down 
    debt incurred in the Rollicking 80s (the result of getting all those 
    bright young MBAs and JDs to go to Wall St).  What that has done is to 
    restrict their capital outlays (thereby making them much more choosy about 
    what they select from which computer systems vendor).  I believe
    that that is part of the reason we are hurting so badly right now.
    (Before I get flamed, I *realize* that the foregoing is not the
    only reason, and that there are competitors who are doing well, etc.)
    
    
    Glenn    

    Re: .48 and before
    
    I too believe that getting capable people is a key. PhD's or not.  It
    may not be quite as easy getting the top people, but that's the way we
    should be going.  The problem I see is not in having top people but in
    DEC's ability to let these people be all they can be.  The
    bureaucratic nightmare of an organization DEC has created effectively
    slows progress to a glacial pace.  Top performers are going to go where
    they can be top performers AND be recognized for it.  Right now we're
    seeing every one except the most consumate politicians in the company
    be classified as "heads" and potential layoff material.  This lack of
    security and arbitrary layoff schemes will not attract nor retain the
    workforce that progress will require.
    
    With hiring frozen and politicians retaining their positions and even
    advancing their positions, will the top computer people (makers,
    sellers, programmers, etc.) look at DEC as the place to make a career. 
    If they don't, I seriously doubt that the combined business acumen of
    the remaining politicoes will be a sound foundation for future
    competitive excellence.
    
    Dave

  Just because the AS400 is like a "VAX" that doesn't mean it's a mini
computer. 

  Back in the 60s and 70s there were at least three classes of users. There
were users with millions to spend who could buy a large general purpose
computer system, people with many more millions who could buy a super computer
and people with a hundred thousand or so who could buy a small general purpose
mini-computer with limited ability due to small memory size, limited I/O
capability, etc. In the 80s, PC's came along and a fourth market was born of
people with $10k-$20k or so who bought machines to do things like word
processing. 

  For a while, these markets lived in harmony, large systems, super systems
mini-computers, and PCs. Then technology advanced. The capabilities of PC's
increased so that people with small bucks could buy a small general purpose
computer system. Small machines started running UNIX and DOS and Apple invented
their own general purpose operating system. 

  At the same time, large fast systems became cheaper so that people with less
than $100,000 could buy a very powerful machine that would have been
considered a large computer by the old standards. The mini-computer Market was
absorbed into either the PC market or the large system market because people
needing "mini-computers" could either buy a PC to do the work for $20,000 or
pay $200,000 and have a very powerful system with several meg of memory, 32
bit addressing, etc. 

  As for the VAX, remember not all VAXes are mini-computers. VAX is an
architecture, not a machine. Sure the 1st VAX, the 11/780s, were mini-computers
costing over $100k-$200k, having limited power by today's standards and
requiring lab space, but later VAXs were not. The uVAX II was really more of an
office machine than a mini-computer having the power of a 780 but costing a
little more than an expensive PC and living comfortably under your desk. Other
machines like the 8600 and 8800 with many Meg of memory had the speed of large
computing systems of the 60s and 70s and the 9000 approaches the super computer
class. None of these are mini-computers. 

  As for the future, it appears that all of these classes will probably merge
into one or two. For a few hundred bucks you will probably be able to buy
a small commodity machine that runs a general purpose operating system and
for $20k, you will probably be able to buy a very powerful machine. Today
$100k will get you at least a super computer and perhaps a massively parallel
machine with thousands of processors or even a neuro-net. That will probably
be available for much less in the years ahead.

  The days of shelling out $100k to buy a limited general purpose machine
requiring a large metal shop to manufacture, a large truck to haul, a group
of techs to install and a large lab to run are over. Or to put it another way,
the mini-computer market is dead. 

  R.I.P.,
  George

    Regarding .50
    
    Ok, VAXen are not all mini-computers.  But, what are AS/400s, besides
    being a subset of what one gets with a faster, lower-priced VAX?
    
    (One answer is: a more successfully marketed and sold computer of
    some class or another.)
    
    Dennis

    
    Oh come on!  Lets stop splitting hairs!  If It drives dumb terminals
    and sits on a raised floor, it's a Mini.  If it has a mouse and sits on a
    desk or at a deskside it's a Workstation.  If it costs a million bucks, 
    it's a Mainframe.
    
    These are the only distinctions you have to make.
    
    -Ed_who_can't_see_the_difference_between_a_VAX_and_an_AS/400
    
    

    re:50,51
    
    The example of the AS/400 ought to inspire us.  Whether or not you call
    it a "mini-computer", it has a proprietary operating system, limited
    peripherals, and a simple character-cell interface.  AND THERE IS AT
    LEAST A $14 BILLION MARKET FOR IT!!!
    
    Our people who sell against this system say we can beat it consistently
    if we only pay attention to what the customer is really buying.  We
    already have a fully competitive product line that addresses what the
    customers need and want in this market.
    
    Wake up!

re: .48, Glenn

>  In the 1960s, our most highly talented young people were incented, by
>  high salaries, to go to Madison Avenue; in the 1970s-1980s, to Wall St.
>  (law and investment banking).  It has been many years since manufacturing
>  (probably since just after WWII) has attracted our best and brightest.

I don't think I can buy this - it's far too simplistic. Regardless of how
talented, bright or otherwise capable a young person may be, their career
choice is largely decided by their aptitudes, abilities, and interests.
I _DO NOT_ believe that engineers and investment bankers or Ad men are
largely interchangeable, and _WILL NOT_ believe that most people force
themselves into areas into which they don't well fit. As a further rebuttal,
DIGITAL was grown in this time frame, not due to the talents of the people
you indicate were being ferreted off to other disciplines.

-Jack

RE    <<< Note 1963.52 by FORTSC::CHABAN "Make *PRODUCTS* not consortia!!" >>>

>    Oh come on!  Lets stop splitting hairs!  If It drives dumb terminals
>    and sits on a raised floor, it's a Mini.  If it has a mouse and sits on a
>    desk or at a deskside it's a Workstation.  If it costs a million bucks, 
>    it's a Mainframe.
    
  I disagree. All sorts of machines sit on raised floors and drive dumb
terminals. Various Cray super computers fit that definition and are not minis
and machines like VAXsystems and DECsystems can drive those terminals from
an office just as well. I've also seen very powerful main frame class machines
with a mouse attached to their console. And for a million bucks, if you are not
getting a super computer you are getting ripped off big time. 

  The point is that the old technology involved limits that set up classes of
users who no longer exist today. There is no longer a niche for a specially
architected and built class of machines which provide a limited general purpose
computer capability at around $50k to $200k. For that price you can get one
powerful machine. The largest MASPAR-12000 goes from around $250K and that's
considered too much of a super computer to sell to some Eastern nations.

  While we were dominating the mini market, others who were building PCs and
main frames had no products for the $100k-$200k small GP computer customers.
Then because of a fundamental change in technology, PCs grew up to provide
cheap support for the low end of the market and machines with main frame power
were priced down to take the high end. There was no place left for the mini. 

  As a result, we stopped building minis like the 780, 750, PDP-11/40, PDP-15
and we started building workstations like the GPX uVAX II and small mainframes
like the VAX 8600 and VAX 8800. 

  I'm sure that if you look at IBM's machine, it's either under $20K or it is
capable of running with more than one meg and several meg of disk storage. If
it's the former, then it's an office machine (or what ever you want to call the
professional version of the PC). If it's got megs of RAM and megs of disk, then
it is a main frame class machine. If it is not capable of megs of memory and
sells at over $100k then there must be some pretty stupid customers out there. 

  In the old days we dominated the mini market because building minis was
something we were set up to do while others were not. That's no longer true.
Today people who built their companies around products like PCs and mainframes
can sell their products into the mini-computer space that we use to own.

  George 

    
    The AS400 is living proof that customers buy solutions and not sexy
    harware.  KO says we need to sell solutions not hardware, that's a good
    example why.  The design community at DEC hasn't had the big picture
    but is moving in that direction. We need products that cover the
    'solution space' of real problems in a big way.  Not just the hardware
    and operating systems, we need solutions that work right out of the box. 
    
    The AS400 is not sexy but is packaged to solve real problems in
    a correct way. Lot's of old packages that work in all kinds of
    bussiness sectors.  IBM knows how to sell them, repair them and
    the customers know how to use them.  You can get a warm and fuzzy
    feeling buying the system because your business will run or
    IBM will send in the troups.
    
    I also hope we can stick to business that are well developed and
    viable, like VAX. We need to keep the VAX products alive for some time
    because it is what our customers know and still like it.  I worry that
    we try to kill off things before they are ready to die.  We don't need
    to  make the VAX look bad to sell Alphas.  We need to make them both
    look good.  VAX systems today (based on NVAX) are very good performers
    (better than most RISC system at time sharing work) and run all the VAX
    software.
    
    I'm trying to inspire myself, when the stock hits $80/share I will be
    auto-inspired.  Let's all look for things we can change for the better. 

re: .56, Jon

> I worry that we try to kill off things before they are ready to die.

Don't overestimate our abilities. We weren't able to kill the 11's during
the past fourteen years in spite of our best efforts. The question is,
did we learn anything from the exercise?

-Jack

    The solutions to sell are numerours.
    
    I believe the way to get to these soultions is to determine the amount
    spent by companies trying to solve their present problems. Determine
    the amount spent on present problems, will identify the bugetary
    sectors that are waiting for solutions.
    
    The market that has the most spending is where we have an opportunity
    to extract growth revenues.  Comments?
    
    hy
    

Re .48

There is another way to look at Manufacturing VS Service.  As companies such
as Digital pawn off certain operations to small contracts that we used to
do and staff in house, it appears that our MFG base is getting smaller, and
services are getting bigger.  The same amount of work is being done, but
now our manufacturing base appears to be getting smaller.  For example,
GM or Ford may have had some sort of in house maintenance people 10 years ago,
whereas they now hire an outside company to do the plant maintenance.  GM
now has "less" people working in manufacturing...but the same amount of work
is getting done.  When we cut a group that does ESD for example, and pawn
off the work on some small firm, we have less Enginering people for the 
statisticians, but the Service industry is now bigger.  

This debate about whether we need a Manufacturing base is tainted a bit
by the politicians to appease the Unions.   If you don't have big shops
with 1000's of people, their political influence is diminished...and the
"you can count on this segment " voting base provided is much harder to
quantify for the pollsters.


Just another way of looking at it....

Armen  

    re .59 - "another way to look at Manufacturing VS Service."
    
    I think you chose not only another view, but a different metric.  The
    previous discussion was (I thought) comparing the revenue mix, not the
    organization size.  If you generate $1Billion in product sales, that is
    one measure of produce business size whether it's all spent on in-house
    manufacturing, or if 90% of it is spent on subcontracting with small
    vendors.  The point is, previous discussion was saying that services
    would generate a larger proportion of Digital's income.  It has nothing
    to do with the amount of work being done (eg, if product revenues
    remain unchanged and service revenues grow the amount of work in
    manufacturing product remains the same but the proportion of that to
    the whole is less).
    
    BTW, I see the decision to shift business emphasis from product to
    service is strategic choice made by top management.  It happens to be
    one that I think is incorrect (or maybe I should say one about which my
    opinion differs).
    
    --bruce

.53>    The example of the AS/400 ought to inspire us.  {...}  THERE IS AT
.53>    LEAST A $14 BILLION MARKET FOR IT!!!
.53>    
.53>    Our people who sell against this system say we can beat it consistently
.53>    if we only pay attention to what the customer is really buying.  We
.53>    already have a fully competitive product line that addresses what the
.53>    customers need and want in this market.
    
    So if we can beat it if we pay attention to the customer market, and 
    we have a product line that addresses the customer market, THEN WE ARE
    BEATING IT.  right?  or ????

    
    Re: .55
    
    Ok, so you want to split hairs again!
    
    > Various Cray super computers fit that definition
    
    So you found an exception to my rule.  Cray sells *HOW* many systems
    a year?
    
   > VAXsystems and DECsystems can drive those terminals from
   > an office just as well.
    
    Ok, so I left out the a family of machines called SuperMicros in the
    1980s.  These are little more that slighly shrunken minis!
    
    >And for a million bucks, if you are not getting a super computer
    >you are getting ripped off big time.
    
    Look at the price of a decently configured VAX 9000 and you'll see 
    it weighs in at about a million bucks.  IBM and Amdahl are very
    successful at "ripping off" their customers.  We could learn a 
    thing or two from them.
    
    > There is no longer a niche for a specially architected and built class
    >of machines which provide a limited general purpose computer capability 
    >at around $50k to $200k.
    
    I guess no-one told the folks who are buying all those AS/400s.
    
    > For that price you can get one powerful machine. The largest
    > MASPAR-12000...
    
    ... Won't run Cobol or accounting software and is therefore a boat anchor
    to the average business user who makes op the biggest segment of the
    computer market.
    
    -Ed
    
    
    

Folks, this topic has dropped into a rathole that belongs in ASIMOV::MARKETING.
(KP-7 or SELECT)

Please continue this discussion there.

Thanks,

Bob - Co-moderator DIGITAL

  This discussion involves a lot more than marketing. It involves engineering,
technology, investment, and computer science. If there is one common thread it
is the Digital involvement in those areas. 

  And what could be more in line with a pep talk than figuring out what we
should and should no longer get "pepped" about? 

  George

    this is a quick PEP ...
    
    which company got more US patents last year than any other?
    hit return for answer..
    
     TOSHIBA

    Which company has won the Nobel prize for physics several times in the
    last decade:
    
    
    
    
    IBM.

    re .66
    
    Indeed, the TJ Watson Lab at IBM is doing evrything from medical
    research, through stuff like the Josephson JUnction. Has anyone worked
    out what DEC actually sees out of WRL/PRL/CRL?
    
    q

re: .0                                                   
    
    	I'm not adverse to pep talks but I'd wish we would start canning
    the latest and greatest in buzzwords, acronyms and silly analogies.
    Every time we start to hang our hat on these wonderful corporate and
    organizational buzzwords we usually find that implementation is about
    10-20%.
    	I hope that management and engineers will work more closely; lately 
    it seems there is a tremendous gap between the two. The relationship
    seems as adversarial as ever; we disdain each other more and more each
    day. 
    	I hope that organizations will work together to boost each other 
    rather than themselves; there are so many mindsets that indicate that
    it is this or that organization which will be the saviour for this
    company; what a load of BS!
    
    - Jim K 

Mary,

I'm sorry to have taken so long to reply, but my project has
been in a crunch to ship our product, and things are very
busy.

I just transferred from six years in the field, in a District
office.  In those six years, I spent virtually EVERY day with
my customers - face to face.  I also spent almost two years
as a Digital consultant to Price Waterhouse, in their national
computer center, every day,  so my perspective is likely to be
more realistic than it would be if I were in a marketing group
in corporate.  In my 13.5 years with Digital, eight of it has 
been in direct, daily, face-to-face customer contact.

In fact, I can tell you from first hand experience that our
corporate marketing groups are completely clueless about the
real customer world.  I don't mean this as an affront to your
opinion or your expertise.  Please, consider the possibility
that your point of view is obscured.

Please...get closer to our customers.  Find out what they really
think of us.  I assure you, you are not aware of what's really
going on out there.  We are NOT a leading Systems Integrator.
I dare say, we're not even in the running.

We may sell several new, large contracts every year, but remember:
"Never confuse sales with delivery".  We stink at delivery, and it's
not exactly a big secret.  Why?  Because often we don't really
know what the customer wants or needs.  Why?  Because we're out
of touch - and the farther we are from the type of daily contact with
our customers that is the only means of understanding them, then
the less we understand them.

If you're not in a field office in Digital, then you don't know
what's going on with our customers.  Period.  BTW, regional
administrative offices and A.C.T.'s (if there are any left) are
NOT, by my definition, field offices, much less the Marlboro
cluster.  If you're not in a field office, you don't have
customers or clients, per se.  If you don't carry a sales
budget - a REAL sales budget, they you don't have customers.

Similarly, if you're not in corporate engineering, then you don't know
what's going on with our product strategy.  Hence, the field is
frustrated with a lack of clear product direction, and corporate
is frustrated with a lack of a clear understanding of our customers.

Why?  Who is supposed to be filling this communications chasm?  Perhaps
Marketing?  I think so.  I think our history of poor to abysmal 
marketing expertise is catching up with us.  We've outgrown our 
ability to communicate internally without having an effective
and efficient marketing organization.  Management appears to be
struggling to fill the gap, but the problem is definitely marketing.
We're too big to tap dance along without real marketing.

It's not a recession.  It's not a change in our business model,
from manufacturing to services - the other vendors are doing fine.
It's us.  We're out of touch.  And the odds are, we're going to
go right on shrinking until we are once again small enough to
communicate to/from our customers, or until by some miracle we
finally get our marketing act on track.

tim

    Tim,
    
    I agree with your last paragraph -- that the market has changed from a
    product market to a service market.  I would take it a step further --
    service is already a mature market; the growing market is
    "informationalized businesses."   
    
    You may think that Digital is not a leader at SI, but G2 Research,
    Input, Gartner, and other leading analysts disagree.  The last rankings
    I saw (about a year ago) placed us anywhere from 3rd to 5th place, based
    on $$.  And, in the case of the 3rd place, based partly on customer 
    satisfaction as determined by customer interviews/surveys conducted by
    the analyst.
    
    BTW, we don't only do big programs.  In fact, we don't *mainly* do big
    programs.  They get a lot of press and big headlines on the 1st page
    because of the $$ value.  The bulk of our programs are in the $1-10M 
    range.  Most of what I see are $2-7M.
    
    The ACTs ceased to exist something like 2 years ago.  Do you think some
    of your other data could be equally outdated?
    
    Mary

    tim,
    
    most of the marketing people i know came from sales, in fact in some
    marketing groups it ahs been standard hiring practise for the last ten
    years to only hire someone with sales experiance.  What happens when
    you hire a good sales person from the field into marketing is you loose
    a good sales person and gain a bad marketeer.
    
    and sometimes you can get so close to the customer you can't see the
    market.

Like I said, I left the field in December.  I have a total of eight years
of direct field experience, six of it quite current.  I'm certainly more
current than someone in a corporate marketing group who may not have been
in direct, daily customer contact in years, if ever.   

Look at it this way:  Let's assume we ARE good at delivering (not just
selling) services.  Let's assume that that means we have a large, effective
workforce in place delivering these services at a handsome profit.  Let's
also assume that the expense controls that have been put in place in the
past two years have effectively eliminated most of the expense waste in
our delivery of both product and services.

Services is, by definition, labor intensive.  In fact, it's nothing but
labor.  But, the only area in which we can cut expenses to become profitable
is labor.  If so much of our revenue is services, while at the same time
profits disappear as services becomes a larger and larger portion of our
revenue, such that now we are forced to layoff tens of thousands of people
to become profitable, what would YOU think is behind it?  

Mary, I was out there - and not just briefly, and not just in one location.
We are NOT GOOD AT THIS.  I was there.  The emperor has no clothes.
Marketing doesn't have a clue. 

Look closer.  We're not making money at it.  We underbid, oversell and buy
back the business on projects that we're about to lose. Because we can't
deliver, so we give away tons of free services and even hardware allowances.
These are all hidden costs, and they are real, and they happen all the
time.  Why?  Because if we lose the business we already won, after all the
hoopla of winning yet another $N million SI contract, we'll look bad.
We'll have to face the possibility that we really stink at delivery.
We do.

I'm not saying we should throw in the towel.  I think we should drop the
cocky attitude that we're one of the top 'n' SI vendors, and try doing
something about the quality of our delivery.  Start measuring the true
profitability of these projects, too.  Get past the local office politics
and embarassment of having a big money project that was well known when
the P.O. was signed, nearly go under when something in the delivery end
falls flat on its face.

Once and for all, let's get marketing on track.  Let's give them a shot
of reality - they need it, and so do we.  How else can we correct the
dismal vacuum of communications between the REAL field and product
development & support?  Hire more salespeople into marketing?  Right.
We are already getting a sales job, internally, from marketing.
Maybe we will risk getting too close to see the market, but somehow,
given our status quo, that's really not much of a risk, now is it?

Mary, the marketing party line that you expound in this note, about our
glorious services business, tells me that you are out of touch.  I don't
know if you are in marketing or not, but I can tell you definitively, and
categorically, what you are saying bears no resemblance to the reality 
that I lived with, every day, for the past six years.  I was out there.

Where were you?

tim

    re: .72 and some other notes
    
    I'm not in marketing or sales but I have some questions about
    marketing.
    
    1.  Is marketing's job to determine what customers will need in the
    future?
    
    2.  Is marketing's job to market existing technology (hardware,
    software to customers) in other words create a market?
    
    3.  If marketing does not know what the customer needs today, what is
    the likelyhood that they will be better at predicting future needs.
    
    4.  If marketing is in #2 what does sales do?
    
    I'm not trying to be sarcastic but as an outsider it seems to be
    confused.
    
    DAR

Personally, I have always viewed Marketing as a communications channel
between customers and product group(s).  They don't sell, but they can help.
They don't 'create markets', customers do that themselves, but they do know
how to detect an emerging new market.  Products (and Services are a product)
are conceived, designed, developed, sold and supported, based in part on the
efforts of, and feedback through our marketing organizations.  Sales and sales
support groups sell products to the market based on information provided to
them by marketing from the product group(s).  "The Field" thereby receives
product strategy and direction from marketing, and product groups receive
market strategy and direction from marketing.

I've never seen this work well at Digital.  Often, it doesn't seem to work
at all, and it's no big secret.  As we grow larger, our ability to communicate
quite naturally becomes complicated and impared by our sheer size.  Does the
field know what's going on with our product strategy/direction?  Don't think
so.  Are our product groups (like, say, the Services product group) aware
of the market direction?  Doesn't sound like it.  What's wrong with this
picture?  Marketing.  I think it's time we fixed it.

tim

    Tim, I am not in marketing, however I do get my information from
    Marketing.  The marketing manager I support is not in direct daily 
    contact with a single or even two customers.  He is in direct, 
    almost daily contact with a large number of customers in the U.S.
    
    I am finding much of what you are writing confusing.  Why are you
    assuming that layoffs can only come from the field?  How does
    discounting hardware at the time of sale make up for problems down the
    road?  
    
    Mary

SI PROGRAM SOWS "SEED" OF SUCCESS

Account team harvests new business based on customer 
satisfaction.

In late April, 1992, the $7.3M SEED (Software Engineering 
Environment Demonstration) program for JIAWG (Joint Integrated 
Avionics Working Group) was officially completed, but the 
financial benefits are continuing.  The account team is closing 
new, follow-on business based on the customer's satisfaction with 
the program's results.

According to Account Executive Paul Kane, "Because we have a 
happy customer, we're closing $1M per year in new projects.  For 
example, the systems that were dedicated to SEED have been 
migrated to a corporate environment.  And Digital is helping to 
manage that corporate environment."  The SEED contract included 
approximately $1M in hardware and software for systems 
development.

Additionally, the successful delivery of SEED has positioned 
Digital well for future opportunities within the aerospace 
industry.  Another recent follow-on win with the U.S. Air Force, 
the COHESION SAD/SEE project, will implement the SEED software 
engineering environment for the F-22 development program.  "That 
opportunity could exceed $60M over its life," noted Garrett 
Keane, SEED Program Manager.  

JIAWG is a congressionally-mandated organization, comprised of 
the U.S. Air Force, Army and Navy, whose mission is to reduce the 
costs of technical programs.  The 20-month SEED contract was a 
risk reduction effort to help identify steps to reduce risk in 
using the Software Engineering Environment defined for the F-22 
Program.

Although one part of the contract included developmental systems, 
the key deliverables were white papers and recommendations in six 
critical areas:  Security, Configuration Control, Software Tools, 
Software Race, Networks and Software/Hardware Interface 
Methodologies.

"Our deliverable was our people, our expertise," explained Paul, 
"In my opinion, the delivery team did a fabulous job.  The 
business I'm doing now was really sold in this program."  The 
team included 10 people out of our St. Louis, Missouri and 
Dayton, Ohio offices.  The program also included managing two 
subcontractors -- Protocol, a Division of Zycad located in New 
Jersey and ARCS Systems located in California.


JIAWG SI WIN
PAGE 2

Speaking on the delivery team, Garrett emphasized that, "We have 
OUTSTANDING Digital Services resources in the field which were 
key in this program.  They delivered the business in a very 
responsible and profitable manner."

The SEED program was won in August, 1990, following a three year 
sales cycle.  Although the delivery team was initially faced with 
major systems integration challenges, they were able to address 
those issues and deliver a very successful program. 

"Team continuity and relationships helped, but what really turned 
it around was our ability to deliver a very high quality service.  
The customer feels that the investment they made in us is peanuts 
compared to what it's going to save them," Garrett concluded, 
"They feel that the money was very well spent."

For more information on the SEED program, contact Account 
Executive Paul Kane at DTN 433-3879 or Program Manager Garrett
Keane at DTN 264-4825.

SUCCESSFUL SI STRATEGIES

"Once it was sold, the people who delivered SEED knew what they 
were doing.  They worked hard to keep the customer happy and it 
worked, because everybody is happy.  In my opinion, the delivery 
team did a fabulous job," stated Paul Kane, Account Executive for 
JIAWG.

LESSONS LEARNED IN THE SEED PROGRAM

Several other factors contributed to the early obstacles the team 
had to overcome, and provided some lessons on succeeding at the 
SI business:

. Identify key team members early on and before the contract is 
  awarded.

. Ensure that the Statement of Work is clearly defined.

. As much as possible, maintain continuity within the team from 
  sale through delivery.

. Keep focused on results.  


JIAWG SI WIN
PAGE 3


"Because it was a research effort the customer tended to drift, a 
natural result of the way things change," Paul concluded, 
"Garrote did a superb job of keeping the program on track.  
That's good, because otherwise we might not have delivered what 
we were supposed to.  We would not have turned a profit on the 
deal."  In fact, the program turned a profit that was well over 
what the team originally anticipated.

PROGRAM MANAGER OF THE MONTH

"Once the program was won, Garrett was responsible for bringing 
it in and making it successful," noted account executive Paul 
Kane, "Garrett was fabulous.  He provided unbelievably strong 
program management."

Garrett Keane brings more than 12 years of experience managing 
large customer and product programs to the table.  His recent 
program successes have included the JIAWG SEED program, the $60M 
MicroVAX 3/3+ Upgrade Program for Computer Special Systems (CSS),
and management of the CSS support for the $14M per year Rugged 
Suppliers Marketing Program.  Prior to joining Digital in 1987, 
Garrett was a Sr. Program Manager at Norden Systems and before 
that, a Program Manager on a number of other government programs.

According to Garrett, the program manager's job is to oversee the 
program, ensuring that it stays on schedule and on target, and 
resolving any issues that may arise.  

Speaking of the SEED program, Garrett commented "We got really 
close as a program team.  It's such a rewarding experience to get 
that closeness and be profitable and stay on schedule and keep 
the customer happy.  All the way around, it was a very profitable 
experience."

Garrett is currently a Program Manager with the Manufacturing
and Government EIC.





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CC:  garrett keane @mko
CC:  paul kane @dyo

    
    RE: .-1
    
    "Personally, I have always viewed Marketing as a communications channel
between customers and product group(s).  They don't sell, but they can help.
They don't 'create markets', customers do that themselves, but they do know
how to detect an emerging new market. "
    
    
    	Demand creation is part of marketing. Other companies do it all the
    	time. Do you think PET ROCKS sold themselves? No, demand was
    	created for them. Digital has never done demand creation. It 
    	didn't have to. That's just what Gartner group is saying. It 
    	is time now for demand creation and Digital doesn't even 
    	believe in it. 
    
        
    	

$21M SI PROGRAM BEGINS ROLLOUT AT NEW VENTURE GEAR

In the face of fierce, global competition, two traditional 
competitors -- Chrysler and General Motors Corporations -- joined 
forces to fix related problems.  Two years ago, they formed New 
Venture Gear, the world's leading designer and manufacturer of 
four wheel drive transfer cases and manual transmissions, from a 
GM plant with excess capacity and a Chrysler plant with more 
business than it could handle.

In March, 1991, New Venture Gear (NVG) chose Digital as its 
systems integrator and data center/network management provider 
for its MRP and financial solutions from field of competitors 
that included EDS, Andersen Consulting, and IBM.  A joint venture 
between ACUSTAR, Chrysler Corporation's wholly-owned automotive 
components operation, and General Motors Corporation, NVG faced a 
problem that is increasingly common in a world of acquisitions 
joint ventures -- the need to merge two distinctly different 
and systems environments, and three remote sites, into a single 
company.  "Not only are we supporting NVG's implementation of new 
technology and new solutions, we're also supporting the 
establishment of new business practices," explained Eric Johnson, 
Manufacturing Planning and Execution Systems Practice Manager. 
"The program consists of three major phases; a management 
consulting engagement, a significant manufacturing implementation 
project, and a five year outsourcing contract."  

According to Account Manager Jacques Bossonney, "They did buy 
three VAX systems, a network and an MRP package from us, but what 
they really expect is to be able to pick our brain for world 
class manufacturing and financial expertise.  They want a 
partnership.  They want to become a world class leader in 
building transmissions."  The new solutions, comprised of 
ALL-IN-1 and third party MRP, Financial, and EDI (electronic data 
interchange) software packages, will be rolled out between July 
and November, 1992.  

The outsourcing contract includes the implementation of new MRP 
and Financial systems, along with Help Desk, Operations and 
Network Management, and other related support services.  As Prime 
Contractor, Digital is managing numerous third parties, including 
Xerox, Radley, Dun & Bradstreet, and several service providers.  
The network will link plants in Muncie, Indiana and Syracuse, New 
York with the new company's headquarters in Troy, Michigan.

For more information about this program, contact Eric Johnson, 
Manufacturing Planning and Execution Systems Practice Manager, at 
DTN 471-5450 or Jacques Bossonney, Chrysler/New Venture Gear 
Account Manager, at DTN 471-5302.

THE KEYS TO SUCCESS AT NEW VENTURE GEAR

"This is a long term business partnership," said Jacques 
Bossonney, account manager at New Venture Gear, "We have to 
produce consistently over time."

On Winning Over EDS

Digital's team dislodged incumbent EDS following an unusually 
short, 3-month sales cycle.  The team showed how a competitor's 
greatest strength may also be its weakest point:

. "EDS's image in the marketplace is that they are very good at 
  facilities management -- that they'll take over your IS 
  department and you'll have to hand over your keys to them."

. "We could provide support in 3 major areas: upfront planning 
  and design, implementation, and ongoing facilities management.  
  
. "Digital was selected primarily because of our full-service 
  systems integration capabilities which included management 
  consulting and proven implementation expertise, as well as 
  strength in outsourcing."

. "The key to our approach was in helping this customer achieve 
  productivity gains through the integration of their business 
  goals, the human needs of their organizations, and their 
  technology investments.  EDS was more focused on getting the 
  outsourcing business."

On Succeeding at SI

. Executive Level Relationships are critical -- Bruce Ryan, Lou 
  Gaviglia, Bob Burke and others demonstrated an ongoing 
  commitment.

. Team talent -- continuity is important, but even through 
  changes the team has maintained consistency.

. Internal resources from Manufacturing and FABS, along with 
  Digital Services people with expertise in manufacturing and 
  finance, all contributed to our success.

On Managing Scope

"We modified the standard change control process to New Venture 
Gear's specific requirements, explained Eric Johnson, 
Manufacturing Practice Manager, "Since we're managing the IS 
process, we are using a 'service request' process.  If somebody 
has a need outside the scope of our commitments, they fill out a 
service request.  We then evaluate and bid on it.  One of the 
major projects that we've won through this process is a major 
networking effort."

Jacques concluded, "I expect that Digital will still be the 
incumbent facilities manager five years from now, and by then we 
will have done other things.  The initial contract was for $18M; 
since then we've booked over $3M in additional business.

SI SUCCESS IS ONGOING IN $14M+ FACILITIES MANAGEMENT PROGRAM

Digital Boosted Customer Satisfaction With MIS From Bottom to #2 

General Electric's Corporate Research & Development Center (GE 
CRD) is the corporate organization that provides basic research 
and technology for all the 13 major businesses that comprise GE.  
GE CRD desired to be freed from MIS concerns so that it could 
focus more of its resources on its core business.

When General Electric's Corporate R&D Center first approached 
Digital about outsourcing in August, 1990, CRD had a defined two 
year plan to migrate applications and users off their VAX systems 
and onto Sun workstations and Apple MACS on the desktop and Sun, 
Convex, and IBM mainframe servers.  Furthermore, when GE CRD 
decided to outsource the management of its central VAX cluster to 
Digital last April, 1991, a user satisfaction survey rated its 
MIS department at the bottom relative to the other R&D service 
organizations.  

Today, according to Program Manager Barry Pardee, "We completely 
turned the situation around.  By every metric we're measured by, 
we are successful.  Since Digital took over, satisfaction with 
the MIS organization moved from last place to tied for second, as 
measured against seven peer R&D service operations by the Sr. 
Vice President's staff."  CRD had three goals: to improve 
computer service, increase the level of expertise supporting the 
service, and at the same time reducing costs. CRD wanted to hire 
more R&D scientists and less service people.

"We have a three year contract with two optional years," said 
John Hamm, Account Manager, "but it's going so well that we 
expect it to last forever.  In one year, the program has grown to 
include the management of two Convex super computers, a second 
VAX cluster, PC integration, all multi-vendor first level help 
desk support, and second level help desk support for VAX and 
Convex system issues and IBM communication issues.  We are now 
focusing on generic applications and re-engineering their 
infrastructure to use the VAXs as servers, i.e., database, mail, 
information repository, etc."
  
Hamm continued, "This perfectly fits the model that we're trying 
to implement.  We're following a modular approach -- working 
outward from the central systems."  As prime contractor, Digital 
is managing numerous subcontractors, including Manpower, Inc., 
DECtemp, Fusion, CISCO and Apple.  

GE CRD became interested in Digital's Facilities Management 
Services, FMS, as a service delivery alternative after seeing 
several presentations on outsourcing and systems integration at 
DECworld in 1990.  Digital was selected following a six month 
sales cycle (see sidebar on Successful Strategies).  

Pardee concluded, "Our strategy was to create a small environment 
and build repeatable solutions that we could roll out."  GE is 
currently considering Digital as its service provider for nearly 
$200M in outsourcing and SI opportunities throughout its 13 
businesses.  For more information about this program, contact 
Account Manager John Hamm at DTN 344-7221 or Program Manager 
Barry Pardee at DTN 344-7225.

SUCCESSFUL STRATEGIES

"This was a precedent-setting event within GE.  It's the first 
time they outsourced a major MIS function." -- John Hamm

Account Manager John Hamm is responsible for large repeatable 
projects like Outsourcing across all of General Electric.  
According to John, a number of factors have contributed to 
Digital's success -- both in winning over veteran EDS and in the 
ongoing delivery -- at CRD.

On Digital vs. EDS:

Their strength is in IBM data centers.  They have less expertise 
in the support of distributed, multivendor systems.

On Key Factors That Led to Win:

. We are a leading supplier of multi-vendor systems support 
. We brought our internal expertise from Digital's IM&T 
  organization to the customer. 
. We're willing to make investments that resulted in mutual gain 
. We invented the technology 
. Sales provided the leadership
. Sales and Services worked as a team.

On Do's and Don'ts of Teams:

. Do be consistent from the initial sale through delivery
. Don't keep changing players

. Do keep the core team small and agile
. Don't confuse the customer with a dozen different people giving 
  a dozen different messages

. Do present an organized, united front
. Don't appear stovepiped to the customer.

. Do operate with the same sense of urgency as the customer
. Don't slow down the pace

Final Words:

At all levels of interaction with the customer, we need to work 
pro-actively to set the agenda.  The customer is not the expert 
in outsourcing; we are.

Our strategy was to create a small, repeatable solution and work 
outward from the center.

Make sure the customer knows up front that scope change happens, 
and establish a process to manage it.

PROGRAM MANAGER PROFILE -- BARRY PARDEE

Barry Pardee brings nineteen years of technical, managerial and 
consulting experience to his current position of SI Customer 
Program Manager III.  His business experience covers a broad 
range, including the Federal and State Government and Discrete 
and Process Manufacturing markets, MIS and general business 
management, and outsourcing, facilities management and systems 
integration businesses.  Barry joined Digital in 1976 as a Sr. 
Engineer.  Since that time he has worked as a Customer Services 
Manager, a DCSS consultant and a Program Manager.  Prior to 
joining Digital, Barry worked at Sperry Univac.

Speaking on the FMS program at GE CRD, Barry explained that, 
"Every step of the way, the deals were based on mutual trust and 
gain. We focused on GE's business problems, rather than trying to 
push whatever services we had to offer.

"It was a solution sell.  I think it grew because it was systems 
integration, not stovepiped lines of business."

    re: <<< Note 1963.79 by CARTUN::MISTOVICH >>>
    
    It's always nice to see success stories.  I read through your three
    examples and thought that there might indeed be hope for us.  But I
    ask you to consider the following:  what about the not-so-successful
    stories?  Notice how those don't get mentioned very often?  It's not
    because we don't have unsuccessful programs;  I happened to be just
    about at ground-zero on one not too long ago.  I realize that few
    people *really* want to hear bad news, but it really is a shame when
    the program manager goes through a detailed analysis, and prepares
    a great "Lessons Learned" document, only to see the same mistakes
    perpetrated all over again ...
    
    Geoff Unland in Austin
    

re: Success stories...

These large sucess stories are great, and I'd like to see more of them,
however, how many unsuccessfull little stories are there around.  If 
Sysytem Integration is to work for us we need to make each project
work, no matter how large or small.  What percent of our SI is in the
range of 10 to 50 thousand.  How many of these customers did we turn away
because the manager deemed it only to be a small inconsequential customer!
THERE ARE NO SMALL CUSTOMERS, only small minded managers who don't see it
their responsibility to make sure each customer is a happy paying, and
repeat business customer.  ssssssss..   Ahh there goes some steam :-)

I no of a few instances myself where we lost business because we did a 
lousy job.  Other instances where we send untrained Software people to work
on a product that they just read the book on.  We can not keep doing this.
Customers won't and are'nt taking this crap, and they bring their business
elsewhere.

- Mike

    I don't write in here much, but I feel compelled to respond to the
    recent tangent ...
    
    There are *lots* of stories reported as "success" stories that are
    successful only from an internal political standpoint, and NOT from a
    financial one.  I've done projects work off and on since I started with
    DEC in '82 (including working with the Dayton folks mentioned a few
    back, who are generally *exceptional* compared to other areas of the
    company in which I've been - incidentally, I no longer work for the
    Dayton office, despite my location code).  To make a long story short,
    for every profitable project I've seen, I could name 5 that weren't ...
    although ALL were presented as "success stories" to folks who were
    removed from the nuts & bolts activities.
    
    The SI effort I'm working on now is profitable, but it has taken divine
    intervention on several occasions to remove internal impediments that
    would have resulted in us either:
    
    	a) losing lots of money ("you must have a project leader, a project
    	   manager, a program manager, a technical manager, ad nauseam ...")
    
    	b) not getting the business at all ("We've never done it that way
    	   before!  Your plan doesn't any of fit our spreadsheet models.")
    
    This is not to say that we *always* lose money - but in my experience,
    Mr. Grady is all too accurate.  A little bit of honest self-assessment
    would go a long way in correcting the problem.
    
+b

    RE: "I'd like to see more of these"  I have 4 in review and
    something like 18 in mid-interview state.  
    
    RE:  "What about the one's that are not so successfull"   I believe
    post mortems are done on all major SI programs.  I know that in the
    course of doing a series of 15 success stories/case studies last year, 
    I discovered one that was an "unsuccess" for all the reasons you've 
    mentioned.  I sent the case directly to Ray.
    
    Mary

>                    <<< Note 1963.75 by CARTUN::MISTOVICH >>>
>    Tim, I am not in marketing, however I do get my information from
>    Marketing.  The marketing manager I support is not in direct daily 
>    contact with a single or even two customers.  He is in direct, 
>    almost daily contact with a large number of customers in the U.S.
    
    Great, so your sources are second hand bad information at that.
    Again, you are missing my point.  Your marketing manager doesn't LIVE
    with one or two customers every day, day in and day out.  I'm talking
    about FACE-TO-FACE, personal, daily contact.  I'm talking about
    intimate knowledge of that customer - or that small group of customers,
    such that he/she/we can really understand them and get to KNOW them.
    If he doesn't know their home phone number - by heart - then he doesn't
    know squat.
    
    Not daily phone contact from another time zone.  It might as well be another
    planet.  The information gleaned from either type of 'daily customer
    contact' is indicative of the RELATIONSHIP built.  I think the
    information our marketing people collect is out of touch.  Your comment
    above backs up my point.  You're describing an Ivory Tower marketeer -
    a phone jockey.  I'm not.  You can't possibly have intimate knowledge
    of a customer in Dallas when you live in Marlboro.
>    
>    I am finding much of what you are writing confusing.  Why are you
>    assuming that layoffs can only come from the field?  How does
>    discounting hardware at the time of sale make up for problems down the
>    road?  

    You may be finding it confusing because you don't work in the field and
    you don't know what I'm talking about.  I'm not assuming layoffs can
    only come from the field - far from it.  The field has suffered enough. 
    If anything, layoffs can start in Marketing, if you ask me, but I
    wasn't suggesting WHERE layoffs should come from at all.  My point was
    this: if we're so good at our labor intensive services, why is it that
    labor is the only thing we can now cut to return to profitability? 
    Why?  Because we AREN't good at our labor intensive services.  We're
    lousy at it, and the larger the revenue base from this sector, the deeper
    our losses grow.  We're losing money BECAUSE of services, not in spite
    of it.  Don't get me wrong, I don't think it's the only reason we're
    losing money, but I can virtually guarantee you from a LOT of first
    hand personal experience that, in the big picture, and in spite of a few
    nice success stories, WE'RE LOSING MONEY IN THE SI MARKET.  And worse,
    we're hiding our losses to avoid embarassment and political demise.
    
    Finally, when you really p*ss off a customer, and you can't do anything
    right, you give them presents.  Allowances on hardware purchases to
    make up for screw ups in service delivery.  It's common.  Anyone with
    any real field experience can testify to this.  The Corporate Account 
    Manager (I know, they changed titles since then - this is just an
    easier title to remember) blows into town with his/her cellular
    telephone on the corporate jet (actualy, turboprop :-) and meets with
    the customer's Senior Executive Vice President, kneepads in hand.
    
    He/she returns, brow beaten, and announces with pride that not only has
    that nasty SI project customer satisfaction problem been solved without
    necessitating direct intervention from our Corporate Executive Partner
    (a high-placed DEC V.P. who brings lots of high DEC visibility), but we
    even got a new $n million hardware sale - with a hefty remedial
    discount applied, of course.  Say, 40%.  Profitability? Zip.
    
    Never confuse sales with delivery.
    
    Like I said, Mary, get in touch.  It's a jungle out there, and you're
    living in the clubhouse, watching it on cable TV.  (just joking - I
    couldn't resist the METAPHOR).
    
    tim
    

    Tim,
    
    Did it ever occur to you that living in one district with one
    customer is also limiting in terms of experience, information and
    education?
    
    I figured out what was confusing about your notes, and Im sorry to
    inform you its not that I'm stupid or have spent too much time in the
    sauna back here at the country club you seem to think I live in.  
    Mixed into your replies directed to me are attacks on statements I  
    never made and that aren't relevent to statements I did make.
    
    My point is that we *can* win SI business and we *can* successfully deliver
    it.  From what I've seen, we are doing so in more and more cases -- in 
    my small samplings, I've seen a significant improvement just in the last 
    year in winning, delivering and making profits.  In the case of one 
    program listed here, I know for a fact that the profits came in 
    significantly over what was bid.  (I don't know what the margins were on 
    the other 2 I've posted here.)
    
    I have never said that there aren't problems with the SI business -- 
    but based on what I've seen and heard, the internal problems are being 
    identified and corrected.  Not as fast as *any* of us would like, but 
    they are being worked on.
    
    Hardware is a commodity -- we cannot sell it if it is vastly
    overpriced, which it is.  It gets allowanced and discounted with and
    without services.
    
    Understand that I am not exactly corporate -- U.S. headquarters is kind
    of between the rock and hard place of the field and Corporate.  I spent 5
    1/2 of my 6 1/2 years in Services on the phone *daily* with sales reps
    and managers and program and project managers -- the bulk of my
    interviews consisted of "playing shrink" (that is, listening to sales
    reps rant and rave).  I also heard of some of the hoops the U.S. has had 
    to go through to get the support it needed (such as adjusting metrics 
    and trying to get off the certs-by-the-minute/VAXes-by-the-pound cycle,
    trying to get training for delivery people without impacting revenue,
    etc.)  
    
    I have never heard of a single instance from a sales rep that hardware
    was allowanced to make up for poor service.  I heard of many, many
    cases in the past of allowancing services to make up for overpriced 
    hardware.  
    
   Mary

    re .85
    
    I have to respond to your last parargraph.
    
    As a field S/R I have allowanced the HW many times to make up for the
    service deficiency.  Never have I done the reverse as I was always told
    that services are people dependent and they won't come down on price.
    
    Ken

    re: last
    
    Now I'm confused again.  Aren't prices quoted before services are
    delivered?  How could the price come down after delivery?
    
    Tim has stated that sales has discounted new hardware sales to make up 
    for poor services, not overpriced services.
    
    Mary 

    re: .87
    
>    Now I'm confused again.  Aren't prices quoted before services are
>    delivered?  How could the price come down after delivery?
    
    The hardware allowances are applied to orders executed after
    delivery of the deficient services.
    

	In my 16+ years in the field, all at the District or lower, I've also
seen:

	- Hardware allowanced to assuage a customer for configurations mis-
	  planned by Sales and Sales Support.  The on-site delivery folks did
	  more to keep the customer than drive them off!

	- Sales setting the expectation in the customers' mind that they would
	  be delivered a "solution", but Sales didn't involve ANY delivery
	  folks until just before the quote is due, then Sales finds out just
	  what a S***pile he has walked into.  Hardware allowances galore from
	  now on!

	- Sales not realizing that the customer is buying a "solution", and quoting
	  only "residents".  The residents soon realize what has happened, and
	  inform the management.  More Hardware allowances if we actually get
	  the customer to sign on for the services necessary to finish.

	- SWS/EIS/DS DMs cutting DISTRICT (important point!) margin to the bot-
	  tom dead center allowed in their goal sheets, while Sales Ops takes
	  a 20-30% allowance from hardware whose LIST price gives a DISTRICT
	  margin of close to 80%!!!!  They still had room to spare.  Services was
	  cornered.  Our VAX 6000's still carry DISTRICT margins in that range!

	Admittedly, I've seen things mis-sold by the Services management, too.
And bad delivery execution of a well-planned "solution".  And poorly engineered
DEC products screwing up a delivery plan. :>)  All of which should say that we
should stop bickering and try to accomplish:

		Finding the SMART business to do; and

		then DOING the business SMARTLY!

	They are two very reasonable things, requiring a different skill set
MIX for each, and probably running the gamut from almost all hardware to 75-90%
services. But if one line is ignored your chances of ending up with a success
begin to approach the 5-10% range!

	Back to work on a finacially successful Program!  :>)

    re:  .85  hardware allowances to make up for bad service
    
    I've seen it twice (bigtime) within the last few months.  One was to
    make up for SI delivery, the other was to make up for a FS boondoggle.
    I won't put the customer's name here, but it's available if you're
    interested.
    
    re:  .89  Sales being the cause of problems
    
    I certainly agree that it's tough to deliver on some of the promises
    made by Sales Reps sometimes.  I've walked into that situation several
    times in the last ten years.  Our new organizational barriers often
    prevent EIS delivery types from being involved until the promises are
    made and the P.O. is cut.  Then the poor delivery specialist is left to
    explain how he isn't really an industry expert in AI, and that he can't
    make a MVAX II do a hundred ACMS transactions per second no matter how
    much he tweaks VMS parameters.
    
    But the overall point is that everyone makes mistakes.  Sales, Support,
    EIS, SI, DCC, and all the other acronymic organizations make mistakes.
    But it turns my stomach when I see how much information is twisted on
    a daily basis to make *everything* look successful, and how many of our
    top managers listen to fairy tales because they don't want to hear any
    bad news.  The company could tolerate this kind of behaviour when we
    were growing and able to cover the losses, but now we aren't growing,
    and there's no loose profit lying around to make up for the mistakes.
    And we *cannot* afford to let the same mistakes happen over and over. 
    But I see them every day ...
    
    Geoff Unland
    

    Yeah, and it's not just Digital.  Pretty common thing for a company to
    have to send in someone to put out fires after a customer has bought a
    big system and found it to not deliver what was promised.
    
    I recently spoke with folks at Cadence.  They are right now selling a
    lot of software to our design groups.  Anyway, they need what they call
    Application Engineers.  They do lots of stuff, but one of the top (if
    not number one) priorities is to help customers after delivery.  Pretty
    easy to be impressed by the demos.  But, sometimes it can be pretty
    hard to deliver.  I think we are seeing a bit of a backlash from
    internal folks who are sold on using external solutions and then find 
    that external support is not of the quality, speed and price that they 
    have come to expect of support for internal solutions.  
    
    From what the folks at Cadence told me (and I doubt that Digital and
    Cadence are unique in this) such situations can get quite heated when 
    customers seem to have been "sold a bill of goods" and you have to go in 
    there to patch things up.  It's going to happen unless the sales folks
    really know both customer needs and company solutions.
    
    Steve

    re: .81
    
    $ SET MODE/SARCASM
    
>         Other instances where we send untrained Software people to work
>on a product that they just read the book on.  We can not keep doing this.
    
    Darn right we cannot keep doing this!  Think of all the revenue that was
    lost while he/she was reading that book!
    
    $SET MODE/NORMAL_AS_I_GET
    
    The SI field is very important to Digital.  Unfortunately, much of what
    we do in this arena seems to follow the old SWS model ("sell 'em a body
    -- any body -- and let the body learn it while the customer pays!"). 
    When I was a customer, I could not understand this attitude.  We wanted
    a solution.  We wanted someone who knew the nature of the problem well
    enough to provide real solutions in real time.  We NEVER wanted "just
    another body" with about the same experience as our people had.
    
    I guess that's why we rarely ever considered using Digital software
    service people.  And that's why we'll NEVER be "best-in-class" until
    the attitude changes drastically.
    
    Thankfully, we've had some real wins in the SI arena.  Unfortunately,
    these often seem to reflect the dedication of certain individuals
    rather than the state of our overall approach to SI.
    
    If we REALLY want the SI business, we had better begin THINKING and
    ACTING like we're in the SI business and NOT like we're a BODY SHOP.
    Real victory in the SI space requires that we start thinking more about
    quality of service instead of dwelling simply on quantity of hours
    billed.
    
    -- Russ

Mary,

First of all, let me apologize for offending you.  That was certainly not my
intention.  Sometimes the fervor of my intention slips into the rhetoric in my writing
and I appear to be on a personal attack when that was not at all my desire.  I'm sorry
if I offended you.  I was not trying to attack statements that you did or didn't make,
I only seek to differ, and to explain why.  By no means was I intending to question
your intelligence; I merely sought to question your information.  I think you are 
uninformed, much of that because you aren't actually out there in the field that you
sincerely believe you know so well.  I seek to dissuade that belief.

Second, I know the location in which you work quite well - I worked in the MRO cluster
for over 4 years.  You may not be in corporate engineering, and your group may even
carry the name of a field organization, but you are definitely not in the field and
you are, by the definition I think most field people would use, in corporate.

Third, I was also 'stationed' in a district office - for the state of Florida.  It's a 
big state.  I didn't deal with just one customer.  I dealt with several.  In several 
cities, in fact.  The farther they were from me (e.g. Miami) the harder it was to keep 
on top of what was really going on there.  If you're in another state, or another time  
zone then I'd say you don't even know how much you're missing, much less what's really
going on.

You're not likely to hear about hardware allowances by sales being used to bribe a
customer not to cancel our project, or worse, sue us for a big chunk of change.  Sales
people may be a lot of things, but stupid isn't usually on that list...telling you about
that could be a Career Limiting Decision (CLD)...  Now, if you worked in that office,
and I think marketing and marketing support people ought to be closer to the field and
therefore closer to reality, then you would have heard about it first hand.  Look at
how many of us current and former field people have.

Hardware is often a commodity, these days.  Margins are shrinking.  We can't afford to
use hardware as the booby prize for Titanic projects that slam into SI icebergs.  Nice
metaphor, huh?  You didn't follow my comments about hardware allowances because you
have never been there.  I guess you just had to be there. ;-)

Finally, I agree with you wholeheartedly - we CAN win SI business, and we CAN deliver
it.  We differ on our perceptions of the status quo.  I say, we CAN, but typically,
we DON'T.  Not only that, we don't track profitability.  Nothing in your articles said
a peep about actual margins on those big wins.  Why?  Because nobody knows.  Nobody.
Not really.  Because there are tons of hidden costs that never see the light of day.
How can we strive to become profitable when we don't know how to tell when we our strife
has succeeded?  We can't.  And so, these smarmy marketing sagas, waxing glowingly with
pride over our big new contracts, have no substance unless we know we actually made
a profit, and we don't know that, do we?  I think not.  If we give away a million 
bucks so our precious project won't be a failure, we can hardly count that million
as a cost of the project, can we?  Of course not: we wouldn't have any margin left.
We'll bury it elsewhere: competitive allowance.  Right.  But we're competing against
our own poor performance.

It's true that everyone makes mistakes.  I'm not trying to point fingers at who sunk
which project(s).  It just irks me when I read how marketing believes we are 'best in
class' or 'world class' when frankly, at least in services, we are typically second
class, and the market knows it.  All I'm really trying to say is that I think your
perspective is obcured by the unrealistic information that marketing is providing you.
Hell, I've read glowing reports about projects that I personally watched raise the 
white flag and surrender to the competition.  If it weren't for the project name, I
wouldn't have recognized it.  I get the impression that a lot of marketing thinks it's
their primary job to sell ourselves to ourselves, internally.  Corporate cheerleaders.
Sure, some of that is necessary, but let's get the real story, the whole story, and
get the communication channel working - in both directions.  And while we're at it,
let's track profits, not bookings or revenue.  Let's just once and for all stop
kidding ourselves.

tim

.93>  I get the impression that a lot of marketing thinks it's their primary 
.93>  job to sell ourselves to ourselves, internally.  Corporate cheerleaders.
.93>  Sure, some of that is necessary, but let's get the real story, the whole 
.93>  story, and get the communication channel working - in both directions.  
    
    Isn't that what started this topic, the request for pep talks and 
    cheerleaders?  so now we've established we've already got the request
    satisfied, masquerading as success stories, let's not confuse matters
    by adding a call for clear and undistorted communication up the totem
    pole.  Heck, where would that leave creative writers like Mary?  And
    where would it lead when top management discovered that their reality 
    was only virtual groupthink?  Heaven forbid, they might learn layoffs
    aren't the answer, or at least why things haven't improved as a result
    of the layoffs thus far...

    I just couldn't help get in on this one.
    
    I work in the field as a dedicated integration consultant with what was 
    once a National Account in the old old old organization. For most of my
    15 years with the company I was in Software Engineering and DIS. For
    the last two years I've been working with the field and I have to say
    "Tim, you nailed it!".
    
    I've found that we don't adequately train our Sales Rep's how to design
    solutions. This means that they really don't understand what they're
    getting into when they sell an SI project. To compound this, the SI
    Business people have the "warm body" attitude. They think that anybody
    can design and develop software/systems. Right, just like anybody who
    can swing a baseball bat can face Nolan Ryan. Give me a break.
    
    Digital management needs to recognize the importance of credibility
    when it comes to the Systems Integration business. 
    
    Put your best people in front of the customer, otherwise you 
    risk losing future business. Ensure that they are technically competent 
    in the area that they are being asked to perform and are skilled at 
    listening to customer problems. This goes for everyone, Salesman,
    consultants, programmers, educators, managers, everyone!
    
    Make sure the Sales force remains involved through delivery (ie: Sales job 
    isn't finished until the customer is satisfied). 
    
    Most importantly, choose an individual to be the SI project manager who is 
    technically competent and is committed to the project, cradle to grave.
    This is the person whom the customer places their trust and confidence.
    It is this persons abilities that Digital is really selling to the
    customer. The customer must believe that this individual can design,
    manage and deliver the solution that they need.
    
    
    SAY WHAT YOU DO and DO WHAT YOU SAY. This is how you win in the SI game.
    
    Dick

    Re .95

    Dick,
    	Short, Sweet, and to the point.  Well said.

    Jim Morton

	I've worked in Field Service, telephone support, presales support,
	consultancy, and now UK subsidiary Marketing.

	The questions and criticisms made in previous replies about Digital
	Marketing are very much in line with questions I have been asking
	myself and others.

	Some of the questions are

	"What is Marketing's role? (Mission, Visioon, Strategy, etc...)"

	"Is Marketing supposed to collect customer requirements and set
	product directions, or not?"

	"Why does Marketing try to sell itself and Engineering's wares to
	the field?"

	"Why do Marketing people seem so remote from customer realities?"

	"If Marketing aren't in touch with customers or Engineering, what
	use are they?"

	Well, those are good questions. Here are some thoughts:

	- Marketing at Digital is NOT a function like Engineering, Sales,
	or even Digital Services. That is, no matter what the org chart says,
	Marketing consists of many disparate groups around the world. Some
	are corporate, some are Area (GIA or Europe), some are Country
	(subsidiaries like UK, Germany, Australia, etc). These all have
	different goals, measurements, responsibilities, and resources.
	There is, by and large, NO chain of command whatever.

	- Btw, recently a sales guy rang me up to say his customer had been
	to a seminar at Ayr in Scotland, and was very impressed. The customer
	now wanted Digital to deliver some of the services that had been
	described. So I asked "who gave the seminar?" "Marketing". "That's
	funny, I work in Marketing. What Marketing group was this?"
	"Manufacturing Marketing". OK, I give up. I had never heard of the
	existence of this group, nor do I have any idea what they do or why.

	- Corporate Marketing includes quite large teams and resources
	which in fact report in directly to Engineering. This includes all
	corporate product managers (the people who control the planning,
	pricing, availability, and distribution of corporate products),
	and what used to be called "base product marketing". If these people
	sound like a mouthpiece for Engineering, this is because they are.

	- European and country (e.g. UK) marketing reports mainly (in practice
	entirely) to European and Country management. This means there is
	no link whatsoever with corporate Engineering or Marketing except
	common interests and goodwill. In principle, Europe and individual
	countries could completely ignore the corporate marketing line
	and select (or make) their own local products to sell.

	- There is enormous momentum and inertia in the product delivery
	process. A typical software product currently takes 5 years from
	inception to break even, and might involve the work of some ten
	people (many products have far more). At a conservative $100K/year/
	person, that represents an investment of $5 million, and that's a
	low estimate. When that product is announced and hits the shelves
	of (E)SSB, naturally corporate wants to see it sell. But Sales, and
	Sales Support, and the customers, already have thousands of products
	to choose from. The simple obvious solution is "shout a little louder".
	So out go more press releases, Sales Updates, seminars, etc., and
	sure enough, Marketing does try to *sell* the new product to Sales.

	- On the requirements side of the products cycle, I find things
	even more confused. There is an equilibrium in which it is mutually
	understood that Engineering has to get stacks of requirements from
	somewhere to design adequate products, but Marketing is neither
	trained, staffed, funded or resourced to collect those detailed
	requirements. So a situation arises where the product manager
	takes requirements wherever they can be got - from CABs, EIP, site
	visits, from the VMS/ULTRIX/IM/CASE Partners, from Sales Support,
	direct from sales people or through corporate Sales, or failing
	those channels just by applying common sense and guesswork to
	what they learn from exhibitions, conferences, and the literature.
	One thing I have learned - at crunch time, the people who take
	the big decisions are the Engineering managers. This is probably
	the best way to do things with the (dis)organisation we have today,
	but the lack of an integrated global marketing department certainly
	is felt.

	/Tom

Things are changing as far as solution sales go...

I work in the Software Engineering Practice...  I was involved in the 
sales and delivery of the JIAWG SEED program referenced elsewhere in this 
conference...

Part of the fallout from that, and a few other programs is that we are now
getting a dedicated sales force to develop and sell that kind of business
on a more "personal" basis.  In other words, they will know the market cold,
they will be focused nation-wide, they will know and share goals with the
delivery team.  In other words, if delivery does not make it's goals, then
sales does not make it's goals (and vis versa).  Supposed to insure that we are
all rowing in the same direction...

It's called "Solution Selling Teams"...  I think it's a great idea...

For more info, drop me a note (HERCUL::MOSER)...

    I think it's a great idea too, I hope it works.  But to work, it must
    be well known to the account teams across the country who work with
    customers day-by-day in the same market.  And the whole nasty issue of
    bookings credit must be done right - no splits hassles involved.  And
    the results must be properly measured and tracked for profitability.  
    
    You know, it wouldn't surprise me if some of our larger customers have
    hired us for our SI projects simply because they know that a.) we
    underbid so they're getting a bargain in the first place, and b.) we'll
    probably drop the ball, resulting in a fire sale on future hardware
    deals.  We have lots of very sophisticated customers who are very
    realistically capable of this.  We lose money on them all the time.
    And I don't blame them for a second.  I'd do the same thing, in their
    shoes.
    
    Finally, as the previous reply indicates, make sure the various
    splinter factions of marketing groups start talking to each other,
    start implementing a cohesive strategy to move market information
    bidirectionally between our product groups and our field customer
    people.
    
    Mary, I hope this discourse tells you something.  Print it all out and
    show it to your marketing manager (unless they actually use Notes -
    then just show them).  Our Achilles' heel is showing, and it's killing
    us.  It's always been there.  It's nothing new.  But like an addict
    with a bad habit, we remain as we always have, in denial of our
    most obvious weakness.
    
    The only change in the market, and in the world as a whole, has been a
    shift toward an environment that places a heavy burden on marketing
    functions, and we, quite frankly, just can't handle it.  We're sinking,
    and I believe we'll either fix this weakness, once and for all, 
    or go under.
    
    Happy Trails,
    
    tim
    

    Mary,

    First of all, let me apologize for offending you.  That was
    certainly not my intention.  Sometimes the fervor of my intention
    slips into the rhetoric in my writing and I appear to be on a
    personal attack when that was not at all my desire.  I'm sorry if
    I offended you.  I was not trying to attack statements that you
    did or didn't make, I only seek to differ, and to explain why.  By
    no means was I intending to question your intelligence; I merely
    sought to question your information.  I think you are  uninformed,
    much of that because you aren't actually out there in the field
    that you sincerely believe you know so well.  I seek to dissuade
    that belief.

    Second, I know the location in which you work quite well - I
    worked in the MRO cluster for over 4 years.  You may not be in
    corporate engineering, and your group may even carry the name of a
    field organization, but you are definitely not in the field and
    you are, by the definition I think most field people would use, in
    corporate.

    Third, I was also 'stationed' in a district office - for the state
    of Florida.  It's a  big state.  I didn't deal with just one
    customer.  I dealt with several.  In several  cities, in fact. 
    The farther they were from me (e.g. Miami) the harder it was to
    keep  on top of what was really going on there.  If you're in
    another state, or another time   zone then I'd say you don't even
    know how much you're missing, much less what's really going on.

    You're not likely to hear about hardware allowances by sales being
    used to bribe a customer not to cancel our project, or worse, sue
    us for a big chunk of change.  Sales people may be a lot of
    things, but stupid isn't usually on that list...telling you about
    that could be a Career Limiting Decision (CLD)...  Now, if you
    worked in that office, and I think marketing and marketing support
    people ought to be closer to the field and therefore closer to
    reality, then you would have heard about it first hand.  Look at
    how many of us current and former field people have.

    Hardware is often a commodity, these days.  Margins are shrinking. 
    We can't afford to use hardware as the booby prize for Titanic
    projects that slam into SI icebergs.  Nice metaphor, huh?  You
    didn't follow my comments about hardware allowances because you
    have never been there.  I guess you just had to be there. ;-)

    Finally, I agree with you wholeheartedly - we CAN win SI business,
    and we CAN deliver it.  We differ on our perceptions of the status
    quo.  I say, we CAN, but typically, we DON'T.  Not only that, we
    don't track profitability.  Nothing in your articles said a peep
    about actual margins on those big wins.  Why?  Because nobody
    knows.  Nobody. Not really.  Because there are tons of hidden
    costs that never see the light of day. How can we strive to become
    profitable when we don't know how to tell when we our strife has
    succeeded?  We can't.  And so, these smarmy marketing sagas,
    waxing glowingly with pride over our big new contracts, have no
    substance unless we know we actually made a profit, and we don't
    know that, do we?  I think not.  If we give away a million  bucks
    so our precious project won't be a failure, we can hardly count
    that million as a cost of the project, can we?  Of course not: we
    wouldn't have any margin left. We'll bury it elsewhere:
    competitive allowance.  Right.  But we're competing against our
    own poor performance.

    It's true that everyone makes mistakes.  I'm not trying to point
    fingers at who sunk which project(s).  It just irks me when I read
    how marketing believes we are 'best in class' or 'world class'
    when frankly, at least in services, we are typically second class,
    and the market knows it.  All I'm really trying to say is that I
    think your perspective is obcured by the unrealistic information
    that marketing is providing you. Hell, I've read glowing reports
    about projects that I personally watched raise the  white flag and
    surrender to the competition.  If it weren't for the project name,
    I wouldn't have recognized it.  I get the impression that a lot of
    marketing thinks it's their primary job to sell ourselves to
    ourselves, internally.  Corporate cheerleaders. Sure, some of that
    is necessary, but let's get the real story, the whole story, and
    get the communication channel working - in both directions.  And
    while we're at it, let's track profits, not bookings or revenue. 
    Let's just once and for all stop kidding ourselves.

    tim
    

The attached is two years old, but I think most of it still applies.  I wrote 
this about the time the Digital SI Rollout was taking place.  I agree with 
previous replies concerning allowances, not involving EIS until the quote is 
due, etc.  I can't claim to be a globally experienced field person, but I have 
dealt with customers (mostly federal and state government agencies and prime 
contractors) across the country in the past several years.

I believe one of the problems with quoting "so and so analyst" when stating 
that Digital is #n in SI is the way the rankings are performed.  When they 
look at the SI players like Anderson, EDS, etc., they are looking at pure SI.  
They aren't counting products for the most part, pure SI service.  When they 
look at Digital, I believe they count a number of things, including, SI 
service (such as we know it), products (VIDA, Pathworks, etc.), and hardware 
services (third party maintenance, installation of products that allow 
multi-vendor integration, etc.), plus hardware products (bridges, etc.).  

I believe we have a historical problem with services.  We used to give s/w 
services away in order to sell the hardware.  Then we learned we could sell 
those services, so we sold A system manager or A programmer for 6-12 months.  
Now we have to learn to deliver projects and we don't have that background.

		SI in the Production Systems Market
		-----------------------------------

We are aggressively pursuing new marketshare for our production systems.  This 
most likely will not involve displacement of another vendor.  Typically, we
will not convert the customer to a "DEC shop", but will be expected to co-exist
& integrate our solutions with the current environment.  This indicates the
need for selling and delivering Systems Integration.  Not as an afterthought,
but as the hub of our proposed solutions.

SI has been common in the federal market for many years.  The commercial world 
is starting to discover the advantages of using SI partners:

o reduce/share risk
o eliminate investment in staff, technology, expertise
o compress time tables

Digital must continue to increase its share of the commercial SI market by 
demonstrating that it has the capabilities to respond to the customer's needs.

Below are summaries of several Gartner reports I recently received:

Conneighton, C.,The Businesses Digital Has Chosen, Gartner Group
================================================================

Digital Strengths
-----------------

o Networking products
o Sales and Service
o SI

Digital Weaknesses
------------------

o Middleware - emerging, but not focused, not seen as a major desktop player
o SI - demand predicted to exceed supply until 1993; field not prepared

I found it interesting that the article was discussing "The Businesses Digital 
Has Chosen" and it focused mostly on products, such as networks, middleware, 
and desktop.  It went on to state these were all quickly becoming commodities. 
Although it said nice things about Digital's SI capability, that seemed to be 
a minor focus.

Digrius, B., Andersen Consulting SI Strategy, Gartner Group
===========================================================

Andersen Strengths
------------------

o SI engagements most likely are the result of established, high-level
  consulting relationships resulting from their accounting business
o Work with IBM, as often as against IBM
o Target industry segments
o Penetration into European and Japanese markets
o Aggressive and powerful ADVERTISING campaign
o Breadth of technology - true multi-vendor SI capabilities
o Industry business expertise

Andersen Weakness
-----------------

o Branch office structure rather than vertical-market business
o Image - pricey, regimented/conservative
o Lack of federal sector credibility
o Software vendor bias - Foundation is a proprietary product, even though
  they promise hooks into AD/Cycle (Cohesion?)

Look at what the competition is doing.  The most common reaction in the field 
to Andersen is, "Don't bring them in because we'll lose account control and 
they will end up managing us."  How are they doing this?

Digrius, B., How Fast Will the Commercial SI Market Grow, Gartner Group
=======================================================================

SI Market Analysis
------------------

o Stimulants
- user's need to remain competitive, more efficient after consolidation
- low-level (chip/device) technology advancement makes new solutions
  possible, but they require unique talents to make them work
- complexity of technology and multi-vendor environments
- lack of user's internal resources
- aggressive vendors (very common during PC explosion)
- risk
- popular solution
- recession (lack of resources and staffing not justified)
- heavy investment may be required to achieve goal

o Factors affecting SI growth
- (+) result of major changes in industry due to competition and expanding
  markets
- (+) risk is such that senior management wants to share the risk with a
  strong, well-financed vendor as a partner
- (-) MIS fears loss of control and transfer of solution to competition
- (-) recession induced caution - modularity of projects, i.e., complete phase
  one and assess cost/benefit before we commit to phase two

o Competition
- IBM, Andersen, & EDS strong due to experience, reputation, financial
  position, focus
- large, less-focused vendors (aerospace firms and _some_hardware_firms_)
  will lose market share
- mid-sized vendors ($100M - $1B) will be acquired, merge or fail
- niche vendors still viable as subcontractors
- highest success rates will result from availability/acquisition/development
  of needed people resources, heavy investment, and focused, aggressive
  market targetting

o Changes in the SI market
- average contract size will increase from $3-5M to $10-15M due to increased
  complexity of applications
- appeal will spread to industries with little or no participation now
- increased vendor specialization (Oracle Complex Systems, Oracle's imaging SI 
  sudsidiary)
- due to complexity and importance of projects and SI decisions, vendors
  will develop more formal methodologies to evaluate/justify SI and ensure
  success (can we?)

Having read this, I wondered what our strategy should be and how would we get 
there?

Strategy - Top-down, multi-point selling, CEO-CFO-CIO/MIS-end user.
Call at the top to gain business knowledge, establish partnering
relationships, maintain presence. Sell financial advantages to CFO.  Sell 
technical advantages to CIO/MIS and end users (may have to neutralize CIO/MIS 
if they are an opponent).  Use management consultants?  Sales Execs and
CAM/FAM/SAM's?  AGM's? 

SI Training - should include hands-on labs on SI, particularly focused on
"foreign" product integration, third party products.  I'm sorry, but I don't
see integrating our advertised products and our CMP products as SI.  I believe 
anyone would expect a vendor to be able to integrate their own products 
without being considered systems integration.

I think we need a strong hardware integration capability, a strong
communications capability (no, not just TCP/IP, X.xxx, but something as simple
as understanding how to talk to a unique device (microfilm reader, barcode
reader, custom electronics) over RS-232 using QIO's), etc. 

Management Consulting - establish credibility (ADVERTISE?) of our industry
business expertise (recruiting, business school focus (GEEP)?) 

How do we provide quality work and still make a (>7% industry average in 1990)
profit? ???

(soapbox speech alert!)

Steve Griffin's view of SI as it relates to Digital and the real world
----------------------------------------------------------------------
SI in Digital is a little different than my experience with SI (of course, no 
one referred to it as SI back then, thus my experience is probably not valid).
My experience with SI comes from spending 10 years in the realtime scientific
(NASA) environment.  I was accustomed to activities such as: 

	o interface custom spaceflight electronics and sensors to a PDP 11/34
	  in a lab environment using CAMAC (Computer Automated Measurement and
	  Control) equipment;

	o write code to control custom telemetry and command interface 
	  channels built by Ford Aerospace running on a PDP 11/44;

	o hanging a Unibus expansion cabinet containing customer developed 
	  boards off of a MicroVAX II using the Able Computer Microverter
	  (Unibus to/from Q-bus); 

	o write code to send commands to and accept data from custom
	  electronics through a high-speed Digital interface.

In the Digital world, we seem to view SI as installing Pathworks on a PC and 
testing it with a VAX, installing a third party package, and ocassionally 
(actually rarely as far as I can tell), installing a "foreign" device on a VAX
system or cluster. 

I see one as building, sometimes even fabricating, a car from parts, the other 
as "drop the engine in and bolt it to the transmission".  As the report above 
indicates, one of the stimulants of the SI market is the low-level advances in 
technology, "I read the other day that there was a new chip (device) available 
that will do just what I want, but I have no idea how I would make that work 
with my VAX/PC/IBM mainframe.  Is there anyone that can help me?"

This is the sort of opportunity that I was involved in, and the interesting
thing is, until someone packages these things (given there is that much
demand), SI will be required.  As an example, after my first experience with
CAMAC, it was not only a snap to do that work, but I began promoting it
as a great, custom solution to customer needs, "...and by the way, I am
experienced at implementing that solution."  I had the knowledge, I knew how 
to use the software library, plus the routines I had written, and I knew where 
it was an appropriate solution.

The interesting thing to note here is, CAMAC provides an excellent, reliable,
very flexible solution for many customer requirements.  Initially, CAMAC was a
European standard which was later adopted by IEEE.  The problem was, very few
people were aware of CAMAC and the potential it held for a relatively low
cost, flexible and painless solution based on standards.  We seized that 
opportunity and took advantage of it.

Get well to be competitive
--------------------------
If we identify solutions, invest in them once, and sell that experience
repeatedly, we can't lose.  This is the type of investment that the typical SI 
customer does not want to make.  It does not require an investment of capital. 
Primarily, this is an investment of talent to build experience which then 
becomes a marketable service.

I think Andersen understands this.  One of the biggest "pluses" they have is
their breadth of technical expertise.  They are truly multi-vendor literate,
and they have the experience. 

SI Rollout at Digital
---------------------
My view of the EIS (sorry, Digital Services), SI rollout has been to make sure 
we have the management structure in place.  Teach PAARS, Qwiknet, etc.  Then, 
if we stumble across an SI opportunity, we'll have the managers all ready to 
manage.

Develop our talents
-------------------
We must start to view SI as (OVAD)SI which stands for (Other Vendors And 
Digital) SI.  This is not teaching program managers PAARS or Qwiknet.  This is 
not tools, techniques or methodologies.  It is investing in knowledge, talent, 
and experience of the only resource that counts in SI - PEOPLE.  Whether that 
be through training, mentoring or hiring, we must focus on the technical 
talent needed to be successful.

FOCUS technical ability and sales efforts
-----------------------------------------
We must pick areas of concentration and FOCUS our talents and our sales 
activities around those strengths.  Digital must drop the "everything to 
everyone" mentality.  We can not continue as a company that is "a mile wide
and an inch deep" when everyone else is an inch wide and a mile deep.  We must 
develop that depth of knowledge.

Yes, this does mean we will have to learn to walk away from opportunities. 
Here is a radical idea...let's sub the work that involves supporting Digital 
products, and we take the SI.  Or form a subsidiary to do the SI.

We must not only focus on our strengths, we must focus our efforts on the
opportunities we are best positioned to win.  In the government space, this
means we choose a prime contractor to support on a particular bid, we don't
try to support four primes on the same bid because we don't want to hurt their
feelings.  We do a better job, and we greatly reduce the cost of sales on
these efforts.  If we end up offending primes and they won't work with us 
anymore, perhaps it is because they were not strong enough and we should not 
have been working with them to begin with.  Perhaps we should pick a prime 
partner and bid solely through them.  This does not mean giving all the SI 
business to a prime.  I don't want a funnel to a contractor whenever there is 
SI involved.

    Priot to comming to DEC, I worked as a consultant at a large telecomm
    company who was a dec customer.  It was common knowledge and practice
    that we would just wait for dec to screw up, and they always would. 
    Then we would scream our heads off until dec GAVE us enough free
    hardware to shut us up(i.e. make us happy again in dec's eyes).
    
    We saved tons of money.

    I work in Digital Services in Upstate NY and I can't tell you the
    number of times that my group has had to help the sales department
    out of a bind because they had the customer order the wrong equipment.
    We were either asked to MAKE it work or tell us what we need to make
    it work and then LOAN it to us until ours comes in.  Once it comes
    in, it is then GIVEN to the customer.  This has many, many times.
    
    I've seen complete systems given to a customer because of major
    screw-ups by SALES.
    

I have started to write replies in this topic several times, and
I've only now realised why the discussion disturbs me so much.
I read the stories that Mary and others post about our glowing 
success stories, and compare that with 6 years of SI project work
in Silicon Valley, and more recently in the Seattle area.
The point that I would like to make is that we CAN be a VERY good
if not truely world class SI producer.  I say we can, not that we are.
We have some incredibly talented individuals working in this area.
We, unfortunately, haven't learned how to let them do their job and to
support them.

As long as we pat ourselves on the back for being number n in SI, and
look at only the rosy side of the SI projects which we have completed, 
and not at all at the ones which fell apart, we will not ever figure out 
what we are doing wrong, and we will not ever fix it.

The first step to fixing anything is admitting that you've got a problem.
We've got a problem, folks.
Until we learn to admit it, we're doomed to perpetuate it.

It seems that in my experience, it's a Career Limiting Move for program
management to publish their mistakes and failures.  In these times,
it is a Corporation Limiting Move not to.

Kevin

    I've worked in manufacturing for about 21 years and have been with DEC
    about five.  Unfortunately, I see the same mind set in manufacturing as
    you've been saying for sales, customer service etc.  This is the first
    place that I've seen that spends more money on trying to look good than
    trying to be fundamentally good.  Scrap in the case of manufacturing,
    lost sales opportunities, botched sales, marketing misdirection etc.
    all are excellent opportunities to figure out what you're doing wrong. 
    You've already incurred the expense associated with the error but we
    don't seem to be willing to tear apart the problem so that it isn't a
    problem again.  Again from a manufacturing point of view, most problems
    I've seen frequently can be solved and the process made easier and more
    cost effective *IF* the root cause is identified.  All too frequently
    we don't have the incentive to find that root cause because any answer
    by this afternoon is more highly regarded than having the right answer
    next week.  I've seen people's jobs be threatened if they didn't have
    an "answer" by such-n-such a time.
    
    On top of that, even when you do have THE answer, there are any number
    of "support" people whom you never heard of or what their jobs were;
    that make implementation virtually impossible.  I recall once working
    with an engineer with a problem of fungus growing in rinse tanks.  I
    suggested a periodic dose of benzoic acid in low concentrations to
    inhibit the growth.  (benzoic acid is used as a preservative in a lot
    of sodas, foods etc.)  But the process to set up a new part number was
    so complicated, regulated that it was simpler to write a elaborate
    cleaning procedure rather than prevent the problem from occuring. 
    Every one and their brother, sister, cousin, uncle, etc. had to approve
    the chemical and had the opportunity to shoot it down, as a matter of
    fact they were just doing their "job."  If you make doing the right
    thing impossible, don't expect it to be done.  We're good at that.
    
    DAR

    ...then there was the time (many years ago) when a marketeer, in a
    meeting, shouted "I don't care if we ship blank disks!  We're
    going to ship ON TIME!"  We shipped "on time."  The product was
    full of bugs.  We spent X gazillion dollars fixing bugs and placating
    angry customers.
    
    "There's never enough time to do it right, but always enough time
    to do it over."
    
    Are we still doing things that way?
    

    
    What the hell, I'll take a flier.  This deep seated, seemingly
    endemic malaise that is overcoming us may well destroy this
    company.  Ever hear of self-fulfilling prophecies?  That's
    where we're heading.
    
    Yes, we need to admit there are problems and set about fixing 
    them.  That doesn't mean we're never successful.  This company
    has been *amazingly* successful in many, many endeavors
    for many, many years.  Yes we've made big mistakes, yes we will
    continue to do so. But this utter and constant gloom and doom
    ain't good.
    
    Being relentlessly negative *does not* help.  Mary tried to
    post some success stories and was roundly flamed for it.  I support
    her efforts to introduce *some* level of optimism.  I refuse
    to believe that Digital reached $13+B in sales by giving away hardware.
    For every story of us covering up screwups by giving stuff away,
    it stands to reason there are a hundred stories where we *successfully*
    sold stuff (be it hadware, software, or services).
    
    Ever wonder why all you read in the newspapers is negative
    news?  Because it sells papers.  Humans have a perverse streak
    that just *loves* bad news.  We keep letting this batter our
    confidence and we'll have an even worse time recovering.
    
    Glenn    

re .105

>    Every one and their brother, sister, cousin, uncle, etc. had to approve
>    the chemical and had the opportunity to shoot it down, as a matter of
>    fact they were just doing their "job."  If you make doing the right

Isn't that what we call matrix management?

Why make life difficult; with a little effort, you can make it impossible...

/harley

Re: .103

We in Sales certainly make some mistakes. And I'm sure Digital Services has 
its share of skeletons in their closet. The incredible mish-mash of hardware, 
software and services that Digital sells makes it difficult to be experts in 
everything. Mis-configuring solutions is NOT the norm here in Upstate NY. The
account group I'm part of is at something like 105% of budget for FY92 and
made a profit. And in this day and age, with a demanding customer that's in 
bed with Sun, we're damn proud of that. 'Nuff said. 

Regards,

Jim
Xerox Account Group

Here here Mr. Hamilton.  I agree about negativity being rampant.   For instance,
I worked on a highly successful multi-million dollar S.I. project in the 
Seattle area.  There was another SI project in that same area that had
problems.   When I'd come east, and tell people where I was working, all
they could talk about was the project that wasn't a success.  Just the other
day in a meeting, a person who represents aerospace (and these were aerospace
projects) told me he had never heard of the project I worked on.

We seem to do a very good job at publicizing our failures, but not successes...

JD

Here's another one.  Flame away.  
    Glenn
    
    
Article: 572
From: [email protected] (UPI)
Newsgroups: clari.tw.telecom,clari.tw.computers,biz.clarinet.sample
Subject: Digital in $1 billion Australian telecom project
Message-ID: <[email protected]>
Date: Thu, 9 Jul 92 10:17:40 PDT
 
	MAYNARD, Mass. (UPI) -- Digital Equipment Corp. said Thursday it has
been selected to provide all information technology and service for
Australia's second largest telecommunications carrier -- Optus
Communcations.
	Digital estimated the contract with Otus to be worth about $1 billion
over the next 10 years.
	Under terms of the agreement, Digital will serve as the prime
contractor to Optus to develop an Operational Support System for the
world's first fully digital telecommunications network.
	Optus, which secured the right to operate Australia's second
telecommunications network in November 1991, is a consortium of Bell
South, Cable and Wireless, and several Australian firms.
	Plans call for digital cellular facilities to cover 80 percent of
Australia's population, with fiber transmission facilities built to
cover most major population centers by 1997. The system will provide
virtually all of Australia with access to Optus' services.
	Digital will be responsible for systems integration, management,
training, and operation of the entire information technology needs of
Optus, and, in effect, become the information technology arm of Optus. 
	Optus Chief Executive Officer Bob Mansfield described the agreement
as one of the largest contracts in the world for development of a fully
integrated Operational Support System.
	``This agreement will see the establishment by Digital of a global
OSS Support and Development Center in Australia,'' Mansfield said.
	Digital will then commit its international marketing resources to
develop an export market for the OSS system software developed at the
Australian center.
	Digital will be the principal marketer of the new systems through its
global operations, and is examining joint venture opportunities with
Optus. 
	``This agreement with Optus is the largest single systems integration
and services contract we have signed anywhere in the world, and we are
excited by the challenges and opportunities it will provide in the
global telecommunications arena,'' said Digital Vice President Russ
Gullotti.
	Digital Equipment Corp,, headquartered in Maynard, is the leading
worldwide supplier of networked computer systems, software and services.

Seems we have struck a nerve. ;-)

First of all, Jim (.109) congratulations on your group's
making 105% in FY92 with Xerox.  It's really good to
hear that.

And I also agree that too much negativity is unhealthy for
an already sinking morale.  My comments, though, have not
been intended as mere venting of frustrations.   I have a
genuine interest in identifying and correcting what I have
always percieved to be a problem, and which now under these
market and economic conditions seems to be most pronounced.

We don't communicate well internally.  We do tend to bleed
all over the media when we mess up, though, which only 
complicates matters.  Our primary internal organ for 
communications, marketing, appears to be oblivious to the
crisis and insists on portraying us to ourselves as being
a market leader and a rising star.  Our field people, if 
they buy this line, take that in to our customers and, more
likely then not, they are collectively laughed out of the
building.  We need a little more realism.  Don't just can
the success stories - keep them coming, but lend some
credibility to the cause by at least attempting to address
the problems that are common knowledge to most people who
work with them every day.  Drop the snowjob...

What program can be put in place to improve internal
communication?  How can we overcome the internal politics
and finger-pointing that 'failure' of a project engenders,
for the sake of learning from our mistakes and improving
product quality?

How can we successfully monitor product quality, including
service products, in the low-margin, high-competition market
in which we find themselves?  I'm sure there are answers 
out there to these questions.  After 13 years around here,
I know we have the talent to find them.  Who's working on this?
Anyone?

tim

    you're right tim.  sometimes out in the trenches all you are aware of
    is the bombs dropping on your head and the bodies being carried away
    and you can't tell if we're winning the battle let alone the war. 
    Communication down the ranks and back up again is something that is
    very important and is lacking both ways in many organizations within
    and without the company.  Individuals feeling the heat of a battle may
    give up because they think we have lost the war when in fact it is the
    very time to push ahead and break through the enemy.  And conversely if
    communications from the line is broken or nonexistent then the
    planners have no way of telling if somethings broke and needs to be
    changed.

Re: .111

That is a great example.  I worked with Telecomm customers in the southeast
for several years.  There is absolutely no doubt that we have the talent and
the technology to deliver that contract, with world class results.  I heard
about the possibility of this Australian Telecomm project several months ago.

We can do it right, or we can do it wrong.  It isn't a matter of technical
expertise or product alignment.  It's a matter of attitude.  It's a matter
of putting quality above politics, internal or external.  It's a matter of
real communications in a duplicitous environment.

It's going to be a challenge for the team that attacks this project, and
I wish them the best of luck.  I know we have top notch people in this field,
and I hope we can inspire them to remain focussed on quality, customer
satisfaction, and doing the right thing.  It ain't easy.

I don't consider that a flame.

tim

    Press releases describing wins are marketing events, please keep this
    sort of discussion in MARKETING.  See notes 1906 and 1907 there.
    
    Maybe people want to read this stuff twice, I don't think so.
    
    Pat Sweeney

    <<< Note 1963.111 by BOOKS::HAMILTON "All models are false; some areuseful - D
                           -< Somebody thinks we're capable >-
    
    look like Wall street saw this, our stock is 37 5/8 ! (as of 12:13 pm.)
    
    /nasser
                                                               
    

    re: .101
    
    Don't have time to read your whole note, however I can correct one
    misconception.  Analysts are aware that Digital's (and, as I recall,
    some other manufacturers/integrators -- IBM maybe?) SI numbers include
    hardware, software, etc. along with services.  They adjust the numbers
    accordingly before doing their comparisons.
    
    Tim,
    
    No offense taken.  FWIW, I have found that the sales people I've spoken
    to have been *very* willing to tell me, in the course of an interview
    but off-the-record, many of the potentially career-limiting things 
    they have done. And I've heard some lulus.  For some reason, when I do 
    interviews I seem to have the same effect of a good shrink (or maybe 
    just a good laxative).   It's just that this is the first time I've 
    heard of allowancing hardware to make up for poor service.  And, 
    although I've occasionally run into cases where services didn't deliver 
    what sales promised, on close investigation I always found that sales 
    didn't get services involved early on, or that the sales/sales support 
    team threw the proposal over the wall to the delivery people.  I was 
    just hoping to avoid the fingerpointing.  An awful lot of the successes 
    I've seen had the same people involved "cradle-to-grave."    And, without 
    fail, in every success I've seen, both sales and services stressed that 
    *teamwork* between the individuals was paramount.
    
    Mary

    Patrick,
    
    This note was asking for some PEP talks -- is it really a problem to
    provide good news here?  If so, I'll stop posting wins here and
    redirect people.
    
    Thanks, Mary
    
    Tim, one other thing I forgot to mention.  I don't need to print your
    notes and hand them to the marketing folks back here.  And least some
    of them are already reading them (as I discovered when I got some
    thank yous :-)!

    RE: .112
    
    In support of Tim's comment, I'm reminded of the following proverb:
    
    (Please view 'He' as a genderless pronoun.)
    
    He who knows and knows that he knows,
      is wise; follow him.
    
    He who knows and knows not that he knows,
      is asleep; awaken him.
    
    He who knows not and knows he knows not,
      is ignorant; teach him.
    
    He who knows not and knows not that he knows not,
      is a fool; shun him.
    
    The message?  Well, with respect to .112, we need to share both our
    successes and failures.  We can learn from both.  When we 'spin' failure
    to make it look like success......we're somewhere between 'ignorant'
    and 'fool'. You decide whom we're closer to.                    
    
    Jim

    Patrick not everyone reads MARKETING.  I, for one, enjoy reading some
    of the success stories.  I believe it would go a long way to improve
    morale around here.
    
    Mark.

    Re .0 (Jim):
    
    To the list, though, we might add:
    
    He who knows not and knows that he knows,
      is an outside consultant; shun him.
    
    He who knows and knows that he knows knot,
      is a scoutmaster; give him some rope.
    
    He who knows not and knows that he knows that he knows not,
      is modest; show him Woody Allen films.
    
    He who knows knot and knows that he knows knot,
      is a sailor on a Tall Ship; give him an "Ahoy, matey."
    
    He that knows not and doesn't give a damn,
      is a politician; watch out for him.
    
    Steve Kallis, Jr. 

Pat,

I agree, marketing success stories are more appropriate 
in MARKETING, although I seldom get a chance to go over 
there much these days.  I think, though, that we're 
talking about more than just marketing, and I don't think
it's inappropriate to have had a few examples of this
stuff around.  I don't mean to encourage the deposit of
more of this stuff - it really only provides examples of
the type of thing we publish all the time.  I'm more
concerned about getting an internal reality check going.
We need pep talks, but from credible sources.  I don't 
think marketing is credible, and a lot of people seem
to agree with that.

Mary, as you have received thanks from marketing for 
carrying the flag, so have I received thanks from field
people, in addition to those who have backed me up here
in DIGITAL.NOTE.  I don't intend to inspire marketing to
simply pull their wagons into a circle.  I think there's 
a problem here.  I'm not the only one who thinks so.
I'd like to see what marketing intends to do about it,
besides duck and cover.

Our fundamental communications channel between the field
and corporate is broken.  It is my understanding that
this is marketing's job.  If not, let me know.  Otherwise
I'd like to hear what's being done about it.

tim

    
    According to the DJ voice information network, the
    stock is at 38 (up 2 1/8).  Good news?
    

    Tim and others -- headquarters does collect info on screwups and
    includes it in sales and services training programs, integrates 
    it into processes, and gets it out to the field wherever possible.  
    Don't expect to see published cases of failures, for a number of 
    good reasons.
    
    A major obstacle that Services has faced for years, in terms of
    training Sales about our services is that until recently we only
    got something like 2 hours of time in the standard (1 week?  2 weeks?)
    training programs. I think it wasn't until last year that the time 
    devoted to services was actually doubled -- all the way up to 4 hours.  
    This, despite the fact that services accounts for nearly 50% of Digital's 
    revenue!
    
    In order to share information via media other than training, it's not a
    good idea to talk up our mistakes, simply because so many internal
    documents are leaked.  What you will see is what factors led to success
    -- be assured that programs with serious problems did not follow the
    guidelines.
    
    A few lessons I've learned problem programs:
    
    1.  Involve Services early -- as soon as you think there could be an
    opportunity --  to help ensure that the opportunity is
    properly scoped (in other words, account teams that don't involve
    services may improperly scope an effort and underbid or
    oversell/promise what we can deliver and when) and to ensure you can
    get the necessary resources (in other words, leave services out up
    front and you will end up scrambling to assemble a team when it's time
    to deliver).
    
    2.  Assemble a small, core team early on and keep that core team
    through delivery, if at all possible.
    
    3.  Be prepared to walk away from a bad deal -- we don't want
    all SI business; we want the business that we can make a profit at and
    some deals simply lack win/win potential.
    
    4.  Involve legal *early* in the proposal stage -- an improperly 
    structured deal can lead to dissatisfaction and/or losses (in other
    words, some programs ran into problems because the deal was not
    structured to handle changes in scope).
    
    5.  Include scope management as part of the contract (in other words,
    customer changes can impact deliverability and profitability.  if the
    team starts giving it away during delivery, profitability is lost). 
    
    6.  Make sure you have a clearly defined statement of work (in other
    words, some programs ran into problems because our understanding of
    what was wanted and our customer's understanding of what we were
    agreeing to do did not match).
    
    Mary

Mary,

I think your basic rules are fine.  There's nothing new
there - heard it all a million times, and I agree those
are good rules, and have a lot of common sense to them.

But there's not a word in there about delivering quality.
And there's not a word in there about profitability.
And there's not a word in there about customer satisfaction.

And those are the three things that come to mind immediately,
when I think of an SI project, and the three things we 
don't seem to focus on when we deliver one.

We need to place more emphasis on the quality of our
deliverables, to the satisfaction of our customers, and
to communicate our successes AND our failures so we can
provide a constitent service product.  We don't do that
right now.

tim

	He who knows and knows that he knows is arrogant and wrong 9 times
	out of ten.

	He who knows not and knows that he knows not, is wise.  Follow your
	own way to that understanding.

Tom

re: .126

> the stock is at 38 (up 2 1/8).  Good news?

Best I've heard in a couple of years.

-Jack

    re: 126
    
    > the stock is at 38 (up 2 1/8).  Good news?
    
    Forget the price of the stock.  The company will not survive because of
    Wall Street.  We will survive inspite of Wall Street.  If the stock
    goes up that just means that the money people see a plus on the bottom
    line.  It doesn't mean that we are doing a good job for our customers.
    
    The price of stock is NOT long term.

    Stock price 38?  Maybe because of the Olivetti deal that stock quote is
    in lira not dollars.  :-)

    "We will survive in spite of Wall Street"

    GIMME A BREAK...

    "We will survive in spite of billions of dollars in losses" is more
    like it.

    Wall Street and the stock price are one yardstick of measurement of the
    performance of the management of a company.  Wall Street looks at
    Digital and says "these losses show no sign of turning around"
    and that's reflected in the pessimism about the company.
    
    There are other benchmarks of company performance. Suggest one where
    Digital is outstanding.

    Wall Street didn't form an opinion about Digital in a vacuum.

RE: Mary,

You are right in that we do need to get the delivery people involved in the 
sales cycle (Craddle to Grave)  At least as a way to say, Yes this thing will
fly, or No it won't..  To many times have I gone into an account where one
thing was promised, but the proper goods were not sold!

Lets get back to the topic at hand.  How about those PEP talks.  

If we only heard SOME encouraging news from the top..

- Mike