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| Title: | The Digital way of working |
|
| Moderator: | QUARK::LIONEL ON |
|
| Created: | Fri Feb 14 1986 |
| Last Modified: | Fri Jun 06 1997 |
| Last Successful Update: | Fri Jun 06 1997 |
| Number of topics: | 5321 |
| Total number of notes: | 139771 |
4651.0. "SBU/ABU and MCS changes announced" by NECSC::LEVY (Half-Step Mississippi Uptown Toodleoo) Tue Jun 11 1996 09:11
Everybody should have gotten this, so I don't see any harm in posting.
dave
From: NAME: Robert B Palmer @MSO
FUNC: Chairman, President and CEO <PRESIDENT@A1@SALES@AKO>
To: See Below
To: All Digital Employees
From: Bob Palmer, Digital Chairman
Date: June 10, 1996
Subject: Organizational changes improve service offerings, expand
account coverage, strengthen partner relationships
Today, Digital is announcing several organization changes aimed
at improving the way in which we deliver products and services to
our customers around the world. The changes, which will be
effective July 1, are designed to improve our services offerings,
expand account coverage and strengthen our relationships with
channel partners. While people in the organizations most
directly affected are getting more complete details from their
management teams, I wanted to share the highlights with everyone.
Over the years, service has become an increasingly vital part of
our business. In fact, today it represents more than 40 percent
of Digital's worldwide revenues. However, we believe our best
opportunities lie ahead. Customers are seeking service providers
who can help them primarily in three important areas:
integration of systems- and network-based solutions; product
service and interoperability support across a multivendor
environment; and management of much, if not all, of their IT
operations.
These opportunities match our core service strengths, and to take
full advantage, we will serve our customers through three
separate business units, which collectively will comprise a new
Digital Services Division, led by John Rando. A key component of
this new structure is that it combines our Systems Integration
and Network Services businesses into a single unit.
Customers also have come to appreciate the fact that the more
efficient we are in our sales coverage, the more competitive we
can be in offering Digital solutions to their problems. Over the
last two years, we have shifted dramatically away from a
traditional but unaffordable model of covering most product
business with a direct sales force, and we have aggressively
pursued business through partners. Equally important, we have
strengthened our relationships with those customers to whom we do
provide direct coverage, due in large part to the valuable
talents of our account management teams. This has contributed
significantly to our achieving six profitable quarters in a row.
Implementing that selling model has taught us much about the
importance of consistency in dealing with customers, regardless
of the distribution channel. Based on our experience, we are
further refining, improving, and geographically customizing our
approach to serving customers. That is, we will capitalize on
the varying degrees of maturity in our channel relationships and
individual country markets.
Specifically, under the SBU, we will integrate the ABU and SBU
sales forces in the Americas as well as both units' headquarters
functions. In Europe, we will strengthen cross-business unit
responsibilities under the President of Digital Europe and
broaden decision-making at the country manager level. In
Asia-Pacific, we continue moving forward with our current model.
These moves reflect a continuing series of actions we are taking
to realize the full potential of the corporate strategy we first
outlined last year. For example, we recently combined our
storage and systems offerings to improve our efficiency, and we
realigned our Personal Computer Business Unit to better position
us for leadership in the rapidly growing Windows NT market.
All of these actions are part of on-going efforts to compete
aggressively at every level of our business and to enhance our
service to customers.
While changes are absolutely necessary to help us achieve
competitive performance, what each of us must do is work together
to ensure Digital's continuing success. The company's true
strength is not derived from organizational models. Instead, it
lies in individual Digital employees who are fully engaged and
acting with a sense of urgency to satisfy our customers.
To: All Digital Employees
From: Enrico Pesatori, Vice President and General Manager,
Computer Systems Division
Date: June 10, 1996
Subject: Realignment announced in ABU, SBU;
changes take effect July 1
When we created the Accounts Business Unit and the Systems
Business Unit two years ago, our goals were to strengthen our
relationships with large, global customers and to rebuild our
channel partnerships. We have made significant progress since
that time. We focused our sales coverage, brought our costs to
more competitive levels, improved our marketing programs, grew
the business and made a significant contribution to Digital's
financial and strategic turnaround.
We are now in a position to take advantage of organizational
strengths that did not exist two years ago. To that end, we are
announcing today key realignments in our sales and support
organizations that will strengthen our relationships with
customers and partners and provide greater clarity and
efficiencies within our organization.
The decisions we have made are based on four priorities. First,
to expand customer coverage and partner relationships. Second,
to address key operational issues such as metrics and structure.
Third, to take advantage of synergies between the SBU and ABU.
And fourth, to increase our focus on services.
Therefore, we will do the following starting July 1:
o We will significantly expand our direct customer
coverage. The present ABU sales force, led by our
talented account management team, together with a new
sales team built on the success of the SBU pull sales
force, will provide direct coverage to approximately
twice as many accounts as we cover directly today.
These two sales forces together will represent
Digital's enterprise sales force. They will generate
demand for the company's key products and services and
work closely with partners to meet the needs or our
customers.
o To promote greater effectiveness and efficiency, we
will merge the worldwide support functions of the ABU
into the SBU, including sales and technical support,
marketing, expertise centers, finance, human resources
and communications. This will transform the ABU from
a business unit to a sales function measured on
revenue and expense rather than P&L. The SBU, under
the continued strong leadership of Harry Copperman,
will be the unified business unit structure for the
company's core products.
o Recognizing the differing market demands and channels
maturity of the countries in which we do business, we
will manage the Americas, Europe and Asia Pacific
somewhat differently:
In the Americas, both the present ABU and the SBU
field organizations will report to Debbie Miller,
vice president of the SBU Americas, who reports to
Harry Copperman.
In Europe, the present ABU selling organization will
report to the country managers, who in turn report
to the President of Europe, Vincenzo Damiani, who
reports to me. The SBU will provide all the
infrastructure for the ABU sales force.
The Asia Pacific operation, reporting to Bobby
Choonavala, is unchanged.
o To achieve synergies in our critical Systems
Integration business, Systems Integration and Network
Services will merge to form a new SI Business Unit.
It will be run by Kannankote Srikanth and will become
part of the new Digital Services Division managed by
John Rando. During the Q1 transition, Sri will report
both to John and to me. Additional information is
included in John's letter.
Managers will provide more detailed information to Digital
employees affected by these changes. During the remainder of Q4,
nothing is changing. Each of our responsibilities and
deliverables remains in place.
The Personal Computer Business Unit has already announced several
organizational changes that will improve profitability and help
drive the business to industry leadership in Windows NT. The
primary impact on the PCBU of today's announcements is that its
key products will now be offered through Digital's enterprise
sales forces, as well as through the PCBU's partners.
As Bob Palmer said in his letter to all employees, these moves
are part of on-going efforts by the company to compete
aggressively at every level of our business and to enhance
service to customers. Our new structure puts the Computer
Systems Division in an even stronger position to grow and to
support the overall corporate strategy.
While we have a lot of room yet to improve, we are acting from a
position of strength. We have introduced exciting new products
that have been well received by our customers. We continue to
expand our strategic relationships with key partners, including
alliances with Microsoft, Oracle, MCI and Computer Associates.
And we are winning significant business with a growing list of
impressive customers.
While our organizational structure is evolving, our fundamental
objectives remain the same: to provide the products, the
solutions and the services and support that will make our
customers and partners more successful.
The progress we have made is the result of your hard work and
determination. With your continued commitment, we will
accelerate our growth, improve profitability and enjoy a
successful FY97.
To: All Digital Employees
From: John Rando, Vice President and General Manager,
Digital Services Division
Date: June 10, 1996
Subject: Digital Services Division formed
Today, Bob Palmer announced the formation of the Digital Services
Division. This announcement recognizes a significant milestone in
the evolution of Digital's service strategy. As many of you know,
MCS and Systems Integration have been working over the last
several months to create a new services strategy. Today I am
pleased to share the highlights of this work with you. Our new
strategic direction builds on the success of our core services and
aligns even more closely with the company's corporate strategy.
The Digital services strategy is changing because Digital, as a
whole, is entering a new phase in its transformation. We have
developed a powerful strategy for growth, identifying key areas in
which we have a position, or the potential, for industry
leadership. The third phase in Digital's transformation is
leadership profitability and market share growth in strategic
markets. Information technology services will contribute
significantly in this phase.
Principles of the new services strategy
We will focus on our customers' need for value-added services that
we are credibly qualified to deliver. We will concentrate our
focus on large and medium enterprises, expand our use of channels,
strengthen our relationships with strategic alliance partners,
concentrate on integration for network-intensive business
solutions and continue to build on our multivendor capabilities
and success.
We have established a new paradigm for client/server outsourcing
and will use this strategy to achieve leadership and profitability
in Operations Management Services.
Our emphasis in service will be knowledge and information
intensive. We will continue to develop the management and
technical abilities of our services professionals and seek people
with the best skills in the industry, supporting them with
industry-leading service processes and tools.
The marketplace is shifting to client/server technology, embracing
the Internet/intranet, implementing Windows NT across the
enterprise, and turning to 64-bit UNIX for high-performance
computing. These areas are the focus of Digital's strategy for
growth and leadership. Our new services strategy and organization
is designed to support the company's strategy and growth
objectives and will emphasize business synergies with other
Digital businesses and our alliance partners.
We will continue to emphasize our market leadership in lifecycle
services by expanding the concept to pursue new service
opportunities.
We will build synergies across all the service business units to
drive comprehensive, complex solutions for our customers.
We will work with a select number of channel partners who are
certified under a stringent set of high service standards to meet
the needs of the broader market for Digital services.
We will sharply reduce matrix management in our Division to
achieve speed and accountability in all that we do.
The new services division
All Digital's services business will be aligned under the Digital
Services Division effective July 1, 1996. There will be three
business units within the Division:
o Systems Integration Services, managed by Kannankote Srikanth
o Operations Management Services, managed by Tim Leisman
o Multivendor Customer Services, whose manager will be
announced within two weeks.
Below are some of the highlights defining these units. Additional
information will be communicated by the Business Unit Managers.
Systems Integration will:
o Unite the current Systems Integration and Network Services
businesses, recognizing that our customers' virtual enterprise
is expanding, requiring integrated connectivity both inside
and outside the organization.
o Begin to migrate from our current portfolio to focused
business practices in six areas for profitable growth:
Mail and collaboration
Electronic commerce
Information management
Enterprise applications
Manufacturing execution systems
Telecom industry solutions
o Assure proficiency in four technology solutions:
Enterprise networks
Internet/intranet
Platform technologies (Windows NT and network
operating systems)
Application development and integration
o Expand our account coverage to all Digital direct accounts
Operations Management Services will:
o Deliver profitable, custom outsourcing services to our
customers, combining the high-end customer services from
Productivity Services with Outsourcing Management Services
o Focus on the fast-growing client/server outsourcing market
managing its business around four segments:
Distributed data center management
Enterprise application management
Desktop management
Internet/intranet management
o Provide 100% custom business with a disciplined approach to
proposal review and approval
Multivendor Customer Services will:
o Focus on the highest level of availability and
interoperability support for complex, multivendor environments
in the large accounts of Digital and with our channel partners
in the broader market
o Maintain the installed base of availability business
o Focus on technical and operational excellence in UNIX,
Windows NT and Internet for mission-critical environments
o Assure world-class capability and revenue growth in service
management, interoperability and software support
o Emphasize the sale of services at the time of product sale
o Sell through Digital's account-based selling organization
and channel partners.
Next steps
In summary, we are focusing on those business activities that are
essential to the execution of our customer value proposition as
defined by our corporate strategy; that represent major areas of
opportunity in the services market; are supported by our core
competencies; and provide an opportunity for market leadership.
Over the next several weeks, Services employees will have an
opportunity to meet with their managers and learn how the strategy
will impact the work of their group. We will also provide more
information through Change Forums, additional announcements, and
other detailed communications.
I strongly believe that the changes we are initiating will benefit
our customers, partners, employees, and stockholders, and support
Digital's continued progress toward industry leadership.
Thank you.
| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 4651.1 | Ho Hum | SPECXN::WITHERS | Bob Withers | Tue Jun 11 1996 12:52 | 6 |
| The more things change...
...I was really hoping for a more earth-moving kind of announcement. This
really looks like an exercise in bird cage shaking. I'm disappointed.
BobW
|
| 4651.2 | | NQOS01::nqsrv209.nqo.dec.com::SteveS | Goin' for Growth! | Tue Jun 11 1996 13:27 | 15 |
| Re .1
I don't know about you, but this seems to a significant shift in out
structure, particularly in the way we will engage our end-users and business
partners. I think there is MUCH more to come (i.e., the implications of these
changes are not clear yet) but can say that the changes from here in the field
(ABU Account Manager, for another 3 weeks or so, than "Enterprise Sales???)
will have a profound impact.
My own interpretation is that this COULD lead to less divisiveness 'tween
ABU/SBU/PCBU in our large customers, and the ability to engage in the way our
customers desire (and will pay for). But then, even through the least few
years I always thought the glass was half-full :-) Time will tell...
SteveS
|
| 4651.3 | Putting SI and Network Services together is a good move. | CSC32::B_GOODWIN | MCI Mission Critical Support Team | Tue Jun 11 1996 13:29 | 5 |
| Well, things have been rather screwed up since they moved Networks Services away
from SI two years ago. I see it as a positive move to put them back together,
although I don't think they ever should have move them apart in the first place.
They started compeating against each other. Hopfully, they will now start
working closely together again and be more effient.
|
| 4651.4 | | SALEM::ADEY | Mouse Copy 'n Paste...the real re-use technology | Tue Jun 11 1996 13:47 | 10 |
| Also, merging the ABU with the SBU is significant, and a good thing.
However, there was one part of Pesatori's memo that puzzles me:
o We will significantly expand our direct customer coverage.
Won't we tick off our channels partners?
Ken....
|
| 4651.5 | Sell directly; deliver indirectly | SUBSYS::JAMES | | Tue Jun 11 1996 15:15 | 26 |
| Note: 4651.4
>> However, there was one part of Pesatori's memo that puzzles me:
>> o We will significantly expand our direct customer coverage.
>> Won't we tick off our channels partners?
============================================================
Might annoy our channel partners. Might make them happy.
If a direct salesperson convinces the customer to buy and a
channels partner delivers the order, the partner will be very
happy. Digital gets the order and delivers inexpensively, so we're
happy too.
The selling channel and delivery channel can be different.
Example:
P&G might send you a coupon to induce you to buy pototo chips. You
buy them at a supermarket that is stocked by a grocery wholesaler.
P&G sold directly but delivered indirectly. P&G sells this way because
it is efficient and effective, not because they "love" channels.
It works for them. Hopefully, we can make it work for us.
|
| 4651.6 | Direct Customer Coverage vs. Direct Sales | MROA::OWEN | | Tue Jun 11 1996 15:59 | 23 |
| Re: .4
Pesatori's memo is subject to misinterpretation. Direct customer
coverage is different from direct customer sales (as noted in .5). The
SBU will maintain it's "no-book direct" strategy. The exception will be
"large" ABU accounts. The other sales force that is referenced in the
memo will almost exclusively sell through partners. For large
opportunities they may play a more active role in selling, but fulfill
through a channel.
The other comments that could be misinterpreted in Pesatori's memo are:
"The primary impact on the PCBU of today's announcements is that its
key products will now be offered through Digital's enterprise sales
forces, as well as through the PCBU's partners". As far as I am aware,
the PCBU will still have a "no-book direct" policy. The change is
that the enterprise sales force will be incented and rewarded to "sell"
key (ie: most likely servers) Intel products. And with the ABU no longer
being a P&L center, their revenue/expense metrics will be more supportive
of this behavior.
Regards,
Tim
|
| 4651.7 | half the problem! | NCMAIL::SCHOLZ | | Tue Jun 11 1996 17:11 | 18 |
| Can someone please explain what is meant by:
"They will generate demand for the company's key products and services"
I think merging the ABU/SBU/PCBU is only half the problem. ABU's bag
is only half full. We can't sell Alpha/Celebris XL, PC's, or Multia
directly to ABU customers. We can not offer a discount to ABU
customers for storage or networks. We can not get credit for any E&RT
business in the ABU.
This strategy does not play well with ABU customers. Gee Mr/Mrs
customer, I can seel you Alpha, but if you want PC's, storage,
networks, etc. or E&RT products, you have to speak with someone else.
Customers do not like this senerio.
Regards,
Steve
|
| 4651.8 | E & RT? | ACISS2::ECK | | Tue Jun 11 1996 18:09 | 1 |
| What is E & RT
|
| 4651.9 | Desktop? | DWOMV2::CAMPBELL | MCSE in Delaware | Tue Jun 11 1996 21:25 | 3 |
|
Does anyone else notice a conspicous lack of mention of MDS
aka Desktop?
|
| 4651.10 | don't agree | ANNECY::HOTCHKISS | | Wed Jun 12 1996 02:53 | 18 |
| re -1
>If a direct salesperson convinces the customer to buy and a
> channels partner delivers the order, the partner will be very
> happy.Digital gets the order and delivers inexpensively, so
> we're happy too.
If the channels partner delivers,he gets at least 20% margin.Digital
does NOT deliver inexpensively since in this scenario we have a direct
sales cost.The above model would lead to instant disaster.The idea of
channels is,amongst others,to reduce fixed sales costs.
The biggest problem with direct sales is not channels,it's convincing
the clients we managed to piss off two years ago that the new direct
strategy will a)improve overall service and b)last more than one
year..
I hope it works since most clients I speak to want and always wanted
direct sale as long as it could keep it's promises.Good move
|
| 4651.11 | | CHEFS::PATEMAN | Alfa Corse | Wed Jun 12 1996 04:14 | 16 |
| Stuart,
There is nothing wrong with demand creation via a Digital owned sales
force and fulfillment via a channel. In the UK this was the model used
for the Health market with considerable success. When the direct
account team was cut out, the business fell away - our channels are
neither good at, or especially committed to, demand creation.
Subject to implementation, the new model should be very positive for
the business. We leave our account managers to account manage and
create demand for products, while leaving the channels to shift the
boxes and pick up the cost of logisitics, admin etc etc. The crunch
will be how many accounts a territory rep is given to cover. The
optimum would be 10-20 in my view.
Paul
|
| 4651.12 | | NETRIX::"[email protected]" | | Wed Jun 12 1996 04:19 | 4 |
| Re: .8
Embedded and Real Time
[Posted by WWW Notes gateway]
|
| 4651.13 | Wake up call | UTROP1::KOOIJMAN | LIFE IS HELL THEN YOU DIE | Wed Jun 12 1996 04:58 | 13 |
| Hi all,
Wake up please. It is yet another way to prepare for more manpower
reduction and productivity increases.
So wait to see the real news about how many people our VP's thinks we need
to fill the new model. When do we start to invest in the new services?
Yes, it looks good as a structure but the result depends on the details
and how we communicate (externally and internally) and implement it.
Aad Kooijman.
|
| 4651.14 | | VANGA::KERRELL | salva res est | Wed Jun 12 1996 05:19 | 29 |
| re.10:
> re -1
> >If a direct salesperson convinces the customer to buy and a
> > channels partner delivers the order, the partner will be very
> > happy.Digital gets the order and delivers inexpensively, so
> > we're happy too.
>
> If the channels partner delivers,he gets at least 20% margin.Digital
> does NOT deliver inexpensively since in this scenario we have a direct
> sales cost.The above model would lead to instant disaster.The idea of
> channels is,amongst others,to reduce fixed sales costs.
I agree with .9 for certain markets and customers. For example, in the UK
we were n�1 in Healthcare but no single Healthcare Trust was big enough to be
an ABU customer. We had a Healthcare direct sales team in the ABU which was
disbanded last year. On paper this looked like a good idea, all the orders
were coming through partners for Healthcare. In reality it was a disaster,
we blew our n�1 position in the market because the sales team were creating
demand and the partners were fulfilling it. The point is, that for some
markets Digital needs to have a direct presence to compete but the fulfilment
piece can be done by resellers. As the direct sales force also represented
our entire marketing effort, and only did a fraction of the total work
required, I'd question whether it challenged our cost model.
Final point, I'd say that our lack of understanding of these dynamics is one
of the key factors slowing us down.
Dave.
|
| 4651.15 | mea culpa | ANNECY::HOTCHKISS | | Wed Jun 12 1996 06:56 | 14 |
| re 11 and 14
I agree with you both entirely.Understanding the dynamics per market
segment is key and selling to your VARS and with your VARS is also
key.I was merely challenging an assertion that *seemed* to imply that we
could sell direct and supply indirect-which is a recipe for disaster
unless it results is a reduction in sales and admin costs to offset the
loss in margin.
I think we are well on the way to a model where all we do is
relationship management or agency work between our clients and our
sources-sources being hardware factories or third party VARS or
software resellers.The impacts on job satisfaction and employment
are fairly clear.This is not all bad however-it has long been predicted
that the future company is a matrix like this-we are just closer,by
accident.
|
| 4651.16 | What about MCS-Sales | UTROP1::MIRCK_R | Ronald Mirck @UTO | Wed Jun 12 1996 07:04 | 15 |
| Question?
In all three memo's nothing is mentioned about MCS-Sales.
Will they be a part of the Enterprise Sales Organisation or will they
be an own Sales organisation. It will give conflicts in our MCS
relations with Compaq, CISCO and other companies that choose MCS as
there preferred service provider due to our vendor neutral standpoint.
So, what about MCS-Sales?
regards,
Ronald Mirck
MCS-Sales Representative
Netherlands
|
| 4651.17 | MCS is alive..not sure about well.... | MSDOA::SCRIVEN | | Wed Jun 12 1996 10:08 | 30 |
| re: -.1
As I read it (and I'm in MCS-Sales here in the US), that MCS continues
to be a separate "organization" within the new Digital Services
Division and pretty much is exempt from the discussion around
ABU/SBU/PCBU stuff. I will add my own $.02 worth and say that I
believe there is some GREAT interation going on within these
organization to insure that we have representation from both sides in
all the "strategic" accounts (Lord only knows what or how that
classification is determined) within the ABU; and hopefully, only ONE
MCS Sales person within that account; i.e., no more of this BASE Sales,
MCS Sales, Network Sales, ABU, SI, OMS sales, etc., all tackeling one
account.
I look forward to the "new" "model" (both in quotes cozz I don't
believe what we'll see will be either new or a model, it will be old
and will be different from territory to territory).
Toodles.....JPs
P.S. As far as desktop (MDS); again, my $.02 worth is that we will
continue to support the desktop break/fix ONLY in accounts where it is
a SMALL portion of a BIGGER PICTURE. After all, we all know that you
can't have client/server computing without desktop break/fix as a part
of the solution. My concern is those little guys out there that will
be forced to go to a TPM (competitor) which in turn makes them bigger,
which in turn allows them to go after bigger and bigger portions of our
installed based........
|
| 4651.18 | re .5 (Channels distribution of Product) | JALOPY::CUTLER | | Wed Jun 12 1996 15:49 | 27 |
| re. Channels delivering product out of their stock, I agree, In certain large
accounts, customers "don't want to deal with a channels partner". They like the
"warm and fuzzy's" of having a "consistent" direct connection/relationship with
people from Digital. Many times when a customer orders product and we "Digital"
could not deliver "on-time", I often wondered if the "channels partner" down the
road has it in stock. Why couldn't we complete the sale, the channel partner
deliver the product (I understand that there are other details that would have
to be worked out...). For the off-base stuff, maybe all of that product is
always delivered through channels, Digital Takes the order (remember some large
customers want to deal with Digital and only a Digital Rep --- not channels).
The bottom line is "SALES OF DIGITAL PRODUCT"!!!!!!!!!!!!!!!!!!!!!! It ends up
with a CUSTOMER!!!!!!!!! and Digital gets its money one way or the other, but
it's still DIGITAL'S MONEY!!!!!!!!!!!!!!
When you win the hearts and minds of BIG CORPORATE CUSTOMERS, we're talking
milions of dollars, not 100 million, not 200 million, but more. We must learn to
work with the customer the way he wants to do business, but we must also be savy
enough to work smart and leverage our channels and direct reps so that everyone
is in a win-win situation. On some of these big accounts folks we're starting
from the bottom up and its going to be a tough climb, but if we "work smart", we
can do it! I still believe that we have some of the best products and talent in
this industry, let's use it to our advantage!
Rick C.
|
| 4651.19 | | NPSS::BENZ | I'm an idiot, and I vote | Wed Jun 19 1996 14:21 | 13 |
| re .18 - using inventory from distributors for ABU customers when we
don't have the item in inventory...
I know little about sales and distribution, being buried in
engineering. But it occurs to me that if I were a distributor, I'd
only see the downside of that - Digital using me to stock inventory,
and not being to deliver to my customer because Digital just sold
my last X.
As you said, there are details that would have to be worked out - maybe
the right $$ would compensate the distributors.
\chuck
|