Conference 7.286::digital

    We bought 4 companies, closed a ton of buildings, and I never recall
    us having 4 billion, I think we have gone from 2B to .5B in about
    two years...

>Would someone check this math for me:
>2 years ago we had about 126,000 employees.
OK, I guess.
>and about $4B in the 'bank'
More like 1b.
    
>Since then we've taken several $B in 'restructuring charges' which
>put us in (or further in) the red.
OK.
    
>Now we have about 112,000 employees.
OK.
>and less than $1B in the bank (after last quarter)
I heard 1.5B.
    
>So real quickly, we reduced headcount by about 14,000 employees at
>a 'cost' of about $3B which would say that each of them cost about
>$200,000, right?
No. Not even close. There are so many factors involved that I can't even
begin to count 'em. How about plant closings? How about the people hired
during that time? How about ... oh the heck with it.

I can't see anyone investing large amounts of capital on internal applications.
I worked on European internal applications development and support for about
6 years, and in that time I saw millions poured into the systems that were late,
had diabolical user interfaces, and didn't meet the business needs. Why would we
want more of the same?

Before you set flame/on, let me tell you, the people who worked on those systems
for the most part did a good job and a lot of them still are. The whole thing
became big and expensive because of ineffective management. Management that
allowed political interest to take precedence over meeting business needs.
Management that allowed perpetual projects to exist in order to maintain their
empire. Projects became driven by the supplier and not by the customer, who
more and more were told what they were getting (really!) and not asked what
they wanted. 

Let's invest in internal systems when we can do it cost effectively and when
it's driven by the business for the business and not before.

/Dave.

>>       <<< Note 2012.3 by VANGA::KERRELL "Dave Kerrell @REO 830-2279" >>>
>>                          -< Part of the problem >-

>>I can't see anyone investing large amounts of capital on internal applications.
>>I worked on European internal applications development and support for about
>>6 years, and in that time I saw millions poured into the systems that were late,
>>had diabolical user interfaces, and didn't meet the business needs. Why would we>
>>want more of the same?


This kind of comment, while likely true, absolutely floors me.  In my five
years here as a sales rep I have come to the conclusion that many of our
administrative systems, that have a direct impact on our ability to service our 
customers, are antiquated and, worse yet, are not properly integrated.  Were 
my customers' systems in such a mess I'd be all over them with EIS and SI 
proposals.  Yet, how can we presume to be an effective providor of solutions
when we can't even clean up our own house?

We should be putting our "excess" resources to work on these internal systems.

Bob

    If this comment "floors you" then put pressure on you business to
    get a grip of themselves and define,commission and manage the  sort
    or simple business practices that you as an end user would like to see
    to optimize your business.. The internal systems will follow.
    
    After 12 years, I often have difficulty in uindestanding that people
    still don't seem to comprehend that whipping the "IS" people for bad 
    systems is an abdication of problem ownership.. The business practices
    are bad , systems just highlight that...
    
    Stop complicating,measuring,producing non essential reports, etc from
    a business perspective an d the simpicity and associated cost savings
    in systems will follow..
    
    ITS systems are only a mirror of the business they seek to help !  
    
    
    Chris...
    

    re: .4   <Part of the problem>
    
    Would you really propose SI solutions if Digital were your customer?
    I'll agree that the systems need lots of work, and are poorly
    integrated. I maintain that they reflect the organization and dynamics
    of the company as a whole. When groups are allowed and urged to do
    their own thing, and this includes systems, you get systems such as we
    have. We may debate whether this approach is viable or not, but that's
    not the point here.
    
    Simply putting more people on the problem will not solve it, and would
    probably make it far worse. To create integrated systems there needs to
    be integration architectures and strategies which are agreed to and
    enforced by all involved. This is not a systems problem, as much as it
    is a political one. And that's where Digital struggles - any attempt to
    integrate larger system domains quickly runs into politics. 
    
    From my experience this phenomemon is true at all of the large
    companies I have been to, but in some cases we have seen senior
    management "enforce" the policies and actions needed to create
    integration....in fact in some cases they take a very proactive
    interest in seeing that this happens, and even get involved in the
    details of the work being done to insure that it's working. Requires a
    much different approach than we have had to date.
    
    Thorgan

    Re_-1
    
    Agreed consistent architectures are required.. But that will still not
    help an inconsistent set of business practices... It will simply enable
    them to get worse faster, albeit more elgantly...
    
    A better,faster racing car will not help you win races if you don't
    know how to drive.. It may , however kill you a lot faster.. Then who's
    fault is it the car designers ,the drivers or the team manager who
    commsioned the pairing ?

    re: -.1
    
    I agree. In fact both are needed, consistent business practices and
    consistent integration architectures/models on which to implement those
    practices. You can't address either simply by throwing people at the
    problem.
    
    Tim

    Agreed.
    
    So when do we start ?
    
    
    Chris Morris
    IM&T Europe

    The first thing that you need to have to 'propose' a solution to is:
    
    	A CUSTOMER
    
    By that I mean a SINGLE, INDIVIDUAL, EMPOWERED, CHAMPION in the
    organization who UNDERSTANDS, SEES THE NEED FOR, AND IS WILLING AND
    CAPABLE of MAKING THE CHANGES.
    
    OK, now - who in this company would that customer be? - IM&T, Sales,
    Finance, Operations, SI, IBU, etc.........
    
    A few years ago the question - from our customers/clients - was:
    
    	Who speaks for Digital (single point of contact)?
    
    To solve our problems, maybe it's time for:
    
    	Who listens for Digital?
    
    -Barry-
    

    Before I get accused of sidetracking this note, here are a few thoughts
    to bring the two separate conversations back in-line..
    
    In Dan Infantes Cost Captains report (Corporate VTX) he estimates that
    the total IS/IM&T costs worldwide this fiscal will be $800 million..
    
    This represenst the figures that the businesses have asked IM&T to
    spend to satisfy their needs. I don't know, but having been through
    several of these budget cycles, I suspect that the original business
    request was far higher than this..
    
    Now if you accept on trust, my assertion, that less tha 10% of all systems
    we have in place today are actually *needed* to run the day to day
    opertational business, then you can see that we could easily save at
    some future time over $700 million a year.. The reason for the other
    spend is the complex way in which we choose to do business.
    
    If you now take all the other support functions such as HRO,Admin, 
    Facilities,Audit,Finance etc and assume that a considerable
    amount of their spend is to do with the effect of supporting 
    innefficient business practices, you start to see some really large
    numbers appearing...
    
    Now there is an unfortunate side to this... To achieve these savings
    real, warm, human beings have to go. Its a very sad but real fact.
    
    But if you look at it this way. If these overheads can be removed, we
    then have less people associated costs whilst being in a position to 
    operate much more effectively.
    
    I see other comments in this notesfile that say you can't reduce the
    Company by 50% and survive. Thats true, if we try and simply downscale
    the organization. However if we simply remove the 50% that were not,
    through no fault of their own, adding value, then its entirely
    possible with only beneficial results for the Company.
    
    The morals of this however are another thing.   
    
    Chris
    
    
    
    

    Now that Infante's name has been dragged into this, let's remember that
    some number of years (6-8,?) ago, he attempted to mandate that all
    manufacturing facilities should use one of 3 mrp systems.  
    
    The purpose was, naturally, to make it easier to integrate them into a
    single company system.  I was very outspoken in objecting to this
    because of the investment we had made in a different (and perhaps
    better technically) system.  
    
    From my current vantage point, I can see that we would have been better
    off if Dan had had the muscle to dictate to us.
    
    well, we live and learn,
    
    Dick

    
    Ok, the math was crummy - insufficient facts (which to my knowledge
    haven't been published).  But you got the point - there is MUCH more we
    can do to 'restructure' than to just cut people.  I don't have the view
    that we have restructured anything yet (other than people).  Oh sure,
    we've had the usual quarterly reorgs but I wouldn't call those any sort
    of re-STRUCTURE.
    
    	And I don't blame IM&T people -they're caught in the same system.
    
    .3> The whole thing became big and expensive because of ineffective 
      > management. Management that allowed political interest to take 
      > precedence over meeting business needs.  Management that allowed 
      > perpetual projects to exist in order to maintain their empire. 
      > Projects became driven by the supplier and not by the customer, who
      > more and more were told what they were getting (really!) and not 
      > asked what they wanted.                         
                   
    	I'm beginning to wonder if we haven't got the same attitude towards
    customers (and the same problems).  It seems as though cutting
    headcount without correcting this problem will result in no change in
    results.  As a matter of record, have the previous restructuring shown
    any results?  Does anyone have any analysis or review that says what
    the impact has been?
    
    Jerry         

   Back during the mid 80's we had a saying in the field:
   
   	If Digital could ever figure out how to use its own products,
   	we'd be very dangerous.

Here's another one for you. A few years ago Dan Infante tried to get 
manufacturing to consolidate it's data center operations in a geographical
fashion as opposed to the "stovepipe" of one in each plant. The only folks
who did were Palmer's realm.

    re: Steve,
    
       I've been saying that for years!!  Especially in the manufacturing
    environment I'm from.  I tried and failed to get an MRB system on-line
    as opposed to the carbon copy one we have now.  I think Dick from
    Puerto Rico gave me some input on that years ago....
       And Documentation!!!!!  Jeeez, in a Manufacturing facility there are
    tons of it and it is rediculous for us to have hundreds of hardcopies on 
    the floor when process' are changing constantly!  Like you said, if we
    ever figure out how to use a computer we'll be dangerous!
    
                                                             Scott

    re: last few
    
    Has anybody figured out how to use computers yet?
    This is the 3rd computer networking company I have worked in 
    (O.K. - so we do other things as well !!) but the first that
    that made significant use of computer networks internally.
    Maybe we aren't so bad after all!?
    
    	Anthony

Re: -1

The infrastructure IS there, but it appears as though development of
internal software systems stopped around 1985. ;')

    When I started in Digital Aguadilla, sixteen years ago, I was the ONLY
    manager who had ever used a computer for anything!  (That includes the
    MIS manager, who only managed but never used computers.)  Even the
    engineers who had studied programming were not using computers for
    anything.  When I bootlegged some time on the APT (Automated Process
    Test) machine to do some data analysis, some engineers got up their
    courage and started building "workstations" out of cosmetically damaged
    components.
    
    At that time, programmers were not allowed to use computers for
    generating program documentation but were required to submit it
    longhand for typing.  Digital would not sell a "word-processor" to its
    own manufacturing plants in Puerto Rico because "Field Service can't
    support it".
    
    In my opinion, this track record is what makes our strategy for
    becoming a systems integrator suspect.  I would never buy shoes from a
    shoemaker whose kids went barefoot.
    
    fwiw,
    
    Dick