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Conference 7.286::digital

Title:The Digital way of working
Moderator:QUARK::LIONELON
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

1610.0. "New Management System" by TRCOA::ROBINSON (Michael Robinson @TRC) Fri Sep 27 1991 13:03

    For the benefit of those of us outside of the U.S. - what is the
    "New Management System"?
    
    Michael (DECanada)
    
T.RTitleUserPersonal
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1610.1SWAM2::MCCARTHY_LAI wish to remain anonymousFri Sep 27 1991 14:223
    We wish we knew.
    
    - Larry (DECamerica)
1610.2Sorry, I couldn't resistBTOVT::GREGORYJWelcome to the Grand Illusion...Fri Sep 27 1991 14:596
    re .0
    
    Lemme guess, 10 managers for every employee???
    
    
                 		Jim. 
1610.3NMS, get into the grooveAUSSIE::BAKERstanding on the toes of giantsFri Sep 27 1991 21:2227
    I asked the exact same question of my managers here, told them apparently
    it was going to change the world as we know it (but then I realised that 
    it couldnt,its a "system", and to change the world you need an 
    "architecture" 8^))
    
    Their answers: 1. said he didnt know
    		   2. has yet to reply
    
    I dug out a copy of management memo and gave them to 1, its
    back in the library. I still dont know, but everything points to
    it being something like the failed Russian 50 day plan that got
    squashed by the hardliners.
    
    All I can say is, whatever it is, it must be pretty important. When
    they design something thats absolute crap, you get lots of parchment
    paper and gold embossed lettering with slogans like "The future of
    management is within". People get up and throw acronyms and buzzwords
    at you. If NMS was rubbish I would have expected a few new terms
    like FOCAL-LINE-OMNIPRESENT-PROFIT-SYSTEM or
    	 NON_EXEMPTED_RADIAL_DELIVERED_STRUCTURE
    and people sort of get aligned to the concept (have you ever seen
    Invasion of the Body Snatchers?).
    
    There has been none of that. In fact, I havent seen much of anything,
    so it must be working 8^)
    
    John (DECoz)
1610.4390-line article from mgmt memo in next replyI18N::SZETOSimon Szeto, International Sys. Eng.Fri Sep 27 1991 21:3512
    <<< Note 1509.1 by I18N::SZETO "Simon Szeto, International Sys. Eng." >>>
                          -< see May, 1991 mgmt memo >-

    The May, 1991 issue of the Management Memo (VTX MM) has an article on
NMS.  I'm not familiar with the conference policies on reposting from VTX,
so I'll leave it to others to post the article, if appropriate.

--Simon

    
Also see topic 1581 for some discussion.  (Yes, I see that John
AUSSIE::BAKER has been there already.)
1610.5From mgmt memo, May, 1991I18N::SZETOSimon Szeto, International Sys. Eng.Fri Sep 27 1991 21:41390
    DIGITAL'S NEW MANAGEMENT SYSTEM
    by Alex Munn, manager, Management Reporting Architecture, 
    Corporate Finance Group
    
    Digital's "New Management System," based on business units, has 
    been taking shape since last August.  This system is designed to 
    add value to our customers and profit growth to Digital.         
    
    The Executive Committee has published the "Overarching 
    Principles" on which this system is based:
    o  Every cost adds value.
    o  We make profit on each value added.
    o  The business unit is responsible for the plan to make profit 
       on its value.
    
    These principles are consistent with those outlined in November 
    by Ken Olsen, president:  
    o  Everyone works for the business units.
    o  No one without responsibility tells anyone else what to do.
    o  Budgets are stable.  Only the Executive Committee can change 
       them once approved.
    o  Everyone has more responsibility than authority.
    o  Results of an investment are always measured against an 
       approved budget.
    
    Business unit managers are now making presentations to the 
    Business Unit Committee describing how they will manage their 
    units to add value, following those principles.  This committee 
    is chaired by Win Hindle and includes Ken Olsen and other members 
    of the Executive and Operations Committees.  Its focus is on 
    performance to plan, overhead, and sharing what has been learned.
    
    Mick Prokopis has been named vice president, responsible for the 
    integration of the business unit plans that form the company's 
    budget.  He will also provide a planning context for the 
    Executive Committee to effectively implement the New Management 
    System. 
    
    FY92 planning and budgeting is being done in the New Management 
    System format.  A timetable of events, submissions and 
    requirements has been issued to business unit managers.
    
    The "Corporate Captains Group" has been formed as a steering 
    group for the New Management System at the corporate level.  
    Chaired by Jim Osterhoff, vice president, Finance, this group 
    deals with issues relating to the implementation of the New 
    Management System that can't be resolved within individual 
    organizations.  This group serves as the final court of appeal 
    and also provides guidance in philosophy and direction.  Members 
    include:  Mick Prokopis, Lyn Benton for Finance, Dick Farrahar 
    for Personnel, Susan George for Training, Frank McCabe for 
    pricing, Dan Infante for Information Management and Technology 

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    (IM&T), and Jim Cudmore representing Jack Smith.  Other task 
    forces are following up on specific issues identified by the 
    Corporate Captains Group, such as systems requirements, 
    implementation by Finance, and pricing.
    
    Much work still needs to be done to deliver the New Management 
    System reports with the detail, speed and accuracy desired.  
    Automated implementation of management reporting at the 
    transactional level could be as much as 18 months away, but rapid 
    progress is being made and useful reports of "actuals" already 
    are being generated by manual conversion from the old system.  
    
    Of particular note, for Q2 reporting, U.S. Area Finance was able 
    to produce 230 account P&Ls in the new system format just four 
    weeks after the close of business, which was just three months 
    after the decision had been made to convert to the New System.  
    Those accounts represent about 50% of U.S. business.  And for Q3, 
    they produced 3400 account P&Ls, year-to-date.
    
    Meanwhile the terminology that we use in talking about business 
    units has been changing as our vision of their role has become 
    clearer.  
    
    The main role of a Product or Service Creation Unit is to develop 
    and produce competitive products that satisfy customer needs.  
    "Products" could be hardware, software and/or services.  These 
    "products" are sold to the Customer Account Units using a 
    business unit price, which is based on a competitive-level price 
    for a comparable product in the marketplace.  
    
    Product and Service Creation Units are responsible for:
    o  best-in-class product and service development, manufacturing 
       and service delivery;
    o  engineering, manufacturing and service competitiveness; and
    o  profitability on their direct added value.
    
    Marketing Business Units (MBUs) are involved in three areas of 
    activity, each of which contributes to the company's profit.  
    First, they may develop unique product or service offerings, 
    tailored for their market segments.  These offerings are then 
    "sold" to the Customer Account Units at a competitive business 
    unit price, benchmarked against what would be charged by an 
    outside vendor for comparable value added.  
    
    They also enhance base products and services in ways that 
    increase their value by recruiting and managing Complementary 
    Solution Organizations (CSOs) to provide a suite of applications 
    software targeted at their market segment.  
    
    Third, they increase the profits of the company by applying their 
    market expertise to reduce the selling costs of the Account 
    Units.  For example, they provide sales support to Account Units 

                       FOR DIGITAL INTERNAL USE ONLY


    through Digital Customer Centers (DCCs).  In the latter two 
    cases, Customer Account Units will be charged for these services 
    through a value price.
    
    They prepare a profit and loss statement (P&L) that reflects 
    their marketing activity and expense and clearly shows their 
    value added as business units.  
    
    The company also has established Integration Business Units.   
    They use their influence to plan and coordinate related 
    activities across the company.  All Marketing Business Units also 
    have an "integration" role.  In addition, there are some business 
    units which are just Integration Business Units.
    
    There are 17 "vertical" Integration Business Units (which are 
    also MBUs) that look at specific vertical markets, such as 
    insurance or banking.  They put together integrated P&Ls which 
    are summations of activity in particular groups of accounts.  The 
    total of these 17 integrated P&Ls equals the total of the 
    company.  In the past, this consolidating of all the numbers 
    across the company was done by Finance for Corporate, without 
    specific managers being held responsible for specific areas of 
    performance.  Now the vertical IBUs are each responsible for the 
    overall integration of business plans related to their piece of 
    the business across the corporation.
    
    In addition, there are "cross-industry" Integration Business 
    Units, which focus on classes of applications, such as Office and 
    Personal Computers, which are used in a number of different 
    markets.  And there are also other Integration Business Units 
    that focus on classes of products, such as Workstations.
    
    In other words, each of these business units has an individual 
    entrepreneurial marketing role, and at the same time has an 
    integrating role, making sure that the various parts of the 
    company work together as a cohesive whole to satisfy customers 
    and optimize business.
    
    Customer Account Units use their expertise and Digital's tools 
    and solutions to solve customers' business problems.  As business 
    partners to their customers and as employees of Digital, Customer 
    Account Units have a dual role:  (a) to create the best possible 
    future for their customer, and do this (b) within the boundary of 
    returning a profit to Digital.
    
    Account teams focus on the customer, managing all Digital revenue 
    transactions, investments and business practices with and for the 
    customer.  In this context, they:
    o  are the focal point of responsibility and authority for 
       committing Digital to the customer in a timely manner;
    o  provide consistent treatment (pricing, terms and conditions, 
       support) for their customers across geographies and functions; 

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       and
    o  are the infrastructure that provides continuity with their 
       customers over time, through all business transactions.
    
    The attached list of business units does not include the Customer 
    Accounts Units, which are too numerous to mention by name.  But 
    Accounts are business units in every sense of the word and must 
    be run as businesses, consistent with the New Management System 
    principles.  
    
    In many cases today, the same organization acts as both a 
    Marketing Business Unit and an Integration Business Unit.  They 
    are listed both ways to emphasize that these are separate roles.
    
    Keep in mind that this list is a "living document."  To remain 
    flexible to changing business conditions, business units will be 
    added, deleted and changed as necessary.
    
    PRODUCT CREATION UNITS                     BUSINESS MANAGER
    Systems
    
    Entry Systems Business (ESB)               Jesse Lipcon
    Mid-Range Systems Business (MSB)           Don Harbert
    VAX Workstations Business (WST)            Don Gaubatz
    RISC Business (RSC)                        Don Gaubatz
    PDP-11 (PDP)                               Art Williams
    Personal Computers & Integration (PCI)     John Rose
    Intel/SCO (INT)                            David Poole
    VAX 9000                                   Sultan Zia
    Fault Tolerant Systems (FTS)               Fernando Colon Osorio
    
    Components
    Memories (MEM)                             Tom Frederick
    Disks & Subsystems Group (DSG)             Charlie Christ(Acting)
    Tapes & Optical Products (TOPS)            Peter van Roekens
    Video (VIPS)                               Larry Cabrinety
    Hardcopy (VIPS)                            Larry Cabrinety
    Corporate Backbone Network (CBN)           Jac Simensen
    Local Area Access (LAA)                    Fran Grigsby
    Local Area Network (LAN)                   Mike Rinaldi
    Open Network Systems (ONS)                 Dick Crosby
    Open Systems Software Group (OSG)          Kurt Friedrich
    VMS                                        Rick Spitz
    Continuing Products Business Group (CBG)   Russ Gullotti
    Clusters (CLS)                             Fernando Colon Osorio
    Image/Voice/Human Interface                Bill Heffner
    Semiconductor Operations (SCO)             Ed Caldwell Process 
    Technology Group (PTG)                     Charlotte Frederick
    Low End Networks & Communications (LENAC)  Ralph Dormitzer
    NAS Languages & Tools (NLT)                Bill Keating
    NAS Presentation/Communications Services   Jeff Rudy
    NAS Information Services (NIS)             Chuck Rozwet

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    NAS Distributed Computing (NDC)            Dick Mahoney
    NAS Transaction Services (NTS)             Dennis Roberson
    NAS User Frameworks (NUF)                  Jeff Rudy
    NAS Security Services (NSS)                Steve Lipner
    NAS Concurrent Engineering (NCE)           Mike Taylor
    
    SERVICE CREATION UNITS                     BUSINESS MANAGER
    Customer Service
    
    Hardware Product Services (HPS)            Adrian Flatgard
    Software Product Services (SPS)            Tom Carothers
    Digital Assisted Services (DAS)            Dave Starratt
    Networks & Site Services (NWSS)            Jim Neumann
    Digital Customized Support Services (DCSS) Ralph Harmon
    Desktop Services (DTS)                     Paul Kelly
    Facilities Management Services (FMS)       Tom Mitchell
    Recovery Services (RCS)                    Jim Roman
    Non-Digital Systems Services (NDS)         Jon Morrison
    Security Management (SM)                   Steve Lipner
    
    Professional Services
    
    Customer Training                          Pat Cataldo
    Projects                                   David Creed
    Computer Special Systems (CSS)             Sharon Keillor
    Consulting                                 Pat Zilvitis 
    
    MARKETING BUSINESS UNITS                   BUSINESS MANAGER
    
    Vertical Marketing Business Units
    
    Banking & Investment                       Norm Goldberg
    Insurance                                  Sandy Thomas
    Media                                      Bob Farquhar
    Utilities                                  Patti Foye
    Wholesale/Retail                           Abbott Weiss
    Travel/Transportation                      Max Dobres (acting)
    Professional Services                      Dave Pepin (acting)
    Engineering (ESG)                          Dave Copeland (acting)
    CIM Marketing & Product Development (CMPD) Glenn Armbruster
    Sales & Distribution Systems (SDS)         Eli Lipcon
    Research & Development Systems (R&D)       Robert Horne
    Healthcare                                 Willow Shire
    State & Local Government                   Bob Trocchi
    Education/Science                          Jack McCredie
    US Federal Government                      Harvey Weiss
    Small to Medium Enterprise (SME)           Gary Eichhorn
    Telecom                                    Ernst Wellhoener
    Component Business Group (CBG)             Jim Willis
    
    
    Cross-Industry Marketing Business Units

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    Information Systems Business (ISB)         Bob Glorioso
    Low End Networks & Communications (LENAC)  Ralph Dormitzer
    Personal Computers & Integration (PCI)     John Rose
    Workstations (WKS)                         Don Gaubatz 
    Environmental (ENV)                        Randy Levine
    Finance & Accounting                       Michael Carabetta
    Office                                     Gene Hodges
    Electronic Publishing                      Howard Woolf
    Application Development Software Group     Marion Dancy
    I/S Operations Management                  Pat Mullen (acting)
    Multivendor Integration (MIA)              Dennis Roberson
    CALS/Concurrent Engineering (CALS/CE)      Mike Taylor
    Corporate Information Systems (CIS)        Dennis Roberson
    Departmental Information Systems (DIS)     Jeff Rudy
    Software Development Departments (SDD)     Bill Keating
    Technical OEM Business (TOEM)              Dick Heaton
    Massively Parallel Systems Group (MPSG)    Charles Wilson
    
    
    INTEGRATION BUSINESS UNITS (IBUs)          BUSINESS MANAGER
    
    Vertical Marketing IBUs
    
    Banking & Investment                       Norm Goldberg
    Insurance                                  Sandy Thomas
    Media                                      Bob Farquhar
    Utilities                                  Patti Foye
    Wholesale/Retail                           Abbott Weiss
    Travel/Transportation                      Max Dobres (acting)
    Professional Services                      Dave Pepin (acting)
    Engineering (ESG)                          Dave Copeland (acting)
    CIM Marketing & Product Development (CMPD) Glenn Armbruster
    Sales & Distribution Systems (SDS)         Eli Lipcon
    Research & Development Systems (R&D)       Robert Horne
    Healthcare                                 Willow Shire
    State & Local Government                   Bob Trocchi
    Education/Science                          Jack McCredie
    US Federal Government                      Harvey Weiss
    Small to Medium Enterprise (SME)           Gary Eichhorn
    Telecom                                    Ernst Wellhoener
    
    Cross-Industry Marketing IBUs
    
    Information Systems Business (ISB)         Bob Glorioso
    Environmental (ENV)                        Randy Levine
    Finance & Accounting                       Michael Carabetta
    Office                                     Gene Hodges
    Electronic Publishing                      Howard Woolf
    Application Development Software Group     Marion Dancy
    I/S Operations Management                  Pat Mullen (acting)
    Multivendor Integration (MIA)              Dennis Roberson
    Corporate Information Systems (CIS)        Dennis Roberson

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    Departmental Information Systems (DIS)     Jeff Rudy
    Software Development Departments (SDD)     Bill Keating
    Technical OEM Business (TOEM)              Dick Heaton
    Massively Parallel Systems Group (MPSG)    Charles Wilson 
    
    Product IBUs
    
    Low End Networks & Communications (LENAC)  Ralph Dormitzer
    Personal Computers & Integration (PCI)     John Rose
    
    Workstations (WKS)                         Don Gaubatz
    Component Business Group (CBG)             Jim Willis
    CALS/Concurrent Engineering (CALS/CE)      Mike Taylor 








































                       FOR DIGITAL INTERNAL USE ONLY
1610.6Profit or bustI18N::SZETOSimon Szeto, International Sys. Eng.Fri Sep 27 1991 21:504
For engineering, at least, this means: make profitable products, or die.

David Stone, VP of The New Software Group, has set a goal for TNSG to
contribute towards Digital's bottom line $1/share of profit.
1610.7One perspectiveSUBWAY::DILLARDSun Sep 29 1991 19:5515
    .5 has the official definition that was also relayed to the US Field in
    a video training tape (with intro by KO).
    
    Froma field perspective the focus is on 'profitable growth' and the
    entity being tracked is the account.
    
    IMHO this is a good system although the implementation is hitting all
    the bumps you might expect.  The system requires that the account
    managers function as effective business managers balancing investments,
    expenses, prices and staff to generate a profitable business (account)
    within some defined period of time.  Having seen numerous sales where
    the net gain to Digital was negative I'm glad to see a system where
    that type of scenario is only successful as part of a larger plan.
    
    Peter Dillard
1610.8NMS at IBM ?SWAM2::MCCARTHY_LAMartians are stealing my underwearWed Nov 20 1991 13:2931
<><><><><><><><>  T h e   V O G O N   N e w s   S e r v i c e  <><><><><><><><>

 Edition : 2455            Wednesday 20-Nov-1991            Circulation :  8206 

VNS COMPUTER NEWS:                            [Tracy Talcott, VNS Computer Desk]
==================                            [Nashua, NH, USA                 ]

 IBM - Mulls making its business lines more independent
	{The Wall Street Journal, 19-Nov-91, p. A8}
   This so they can make decisions faster and reduce overhead, industry
 officials said. They cautioned that IBM hasn't decided exactly what to do,
 because its five-person management committee is meeting this week to consider
 the subject. Any decisions may not be announced until next month. The
 executives also cautioned that any reorganizing at IBM may just be along the
 lines of the numerous, generally small steps IBM has been taking for almost
 four years now. In Armonk, N.Y., an IBM spokesman declined to comment. The
 executives said the general idea behind the changes being considered is to
 treat IBM as more of a holding company for its numerous computer businesses
 rather than having headquarters try to direct the activities of IBM's more
 than 350,000 employees. The industry executives said IBM also may try to take
 some of the pricing decisions out of the hands of its field sales force and
 return them to different business units. Any such move would be designed to
 reduce the rampant discounting that has hurt several of IBM's businesses, most
 notably its flagship mainframe line. IBM also may try to give the sales
 force more autonomy over what it decides to try to sell, the industry
 executives said. That way, the different business units wouldn't send out
 armies of staff people to try to educate all the salesmen on all their
 products; the sales force would decide what it wanted and place its orders
 with the various IBM businesses.

<><><><><><><><>   VNS Edition : 2455   Wednesday 20-Nov-1991   <><><><><><><><>