Conference 7.286::digital

The Livewire article says:
...
   A transcript of the DVN broadcast will be distributed to worldwide Finance
 via All-In-One subsequent to the DVN release.
...

						Trace

    I too saw the Livewire article that said a transcript of the DVN
    broadcast will be distributed to worldwide Finance via All-in-one.
    However, how would a person that is not part of the finance community
    get a transcript?

    Please be aware that there will be two broadcasts in the USA, the
    second one on Monday 21st, and two broadcasts in Europe, one this
    morning, Friday 18th & one on Tuesday morning 22nd Sept.
    
    Video tapes of this broadcast will be available in the USA in NTSC 
    through your VTX ordering procedure and in Europe in PAL available
    by writing to Susan van Gemert @JGO requesting EY-M339E & providing her
    with your external mail address & a cost centre.
    
    Everything is freely available (at a nominal charge to cover videotape
    cost & shipping). 
    
    	The same goes for the the Aug 11th DVN broadcast with 25 minutes
    of Bob Palmer well worth viewing/listening to. The European version is 
    Ey-K502E which you can order from Susan as mentioned above.
    
    Open-ness is the name of the game. If in doubt, send me a mail.
    which can be ordered from Susan as mentioned above.

Two points that I remember (I'm not a finance person):

   1.  It takes Digital 8 weeks to get "the numbers" report -
       his goal is to get the time down to 1 week.  If we
       are to be a responsive, data driven company, 8 weeks
       is unacceptable.

       A comment from a friend of mine:  Burger King and Taco Bell
       executives have their (national) numbers (sales the day
       before, etc.) each *morning* when they get to their desks.

       Isn't it surprising that we can't do this?


   2.  Bill said that Digital forgot for many years that it was
       spending the *shareholders* money.  He emphasized always
       remembering this and working to make the shareholders
       happy again.  (happy shareholders implies happy customers)

    Ohforcryinoutloud.
    
    Someone who reads this conference MUST have the transcript.  Can't
    it just be posted?
    

    
    At least some additional points from memory from someone who saw the
    DVN, please.  
    In .4 two items were mentioned; one of which seemed curious coming
    from a VP.  
     

.4>    A comment from a friend of mine:  Burger King and Taco Bell
.4>    executives have their (national) numbers (sales the day
.4>    before, etc.) each *morning* when they get to their desks.
.4>
.4>    Isn't it surprising that we can't do this?

Not to defend the status quo, but it is much harder for us to figure out how
our sales are going...

                                        Burger King               DEC
                                     (or any food place)  (or any computer co.)

What is the 'product'?                  Easy defined      Huge menu, many 
                                        Small menu.       flavors.

What constitutes it being 'sold'?       Easy defined      Ask 5, get 5
                                                          different valid
                                                          answers

Exactly how much money did you          Easy defined      Answer the previous
get for a particular sale?              Count your        question then try
                                        drawer            this one.

Delivery and sale occur at same time?   Always.           Hardly ever.     


Lee

    
    The transcript hasn't arrived yet. I'll be glad to post it here when 
    I receive it.
    
    Linda

    re: .4 - Funny how hard these numbers are to come up with given that
    our Worldwide Information Networking group points out to our potential
    customers that we "can close the books" on a daily basis. Is this not
    so? If so, does have any meaning?

    re .7
    
    Every single component from our stock is still ordered against a
    product code, isn't it. To my understanding, computers don't care very 
    much whether they have 10 or 1000 brands to calculate. I believe the amount
    of units sold from us versus the amount of units sold from Burger King
    compensates this e.g. in computer time usage. And in Burger King's side, 
    they probably have a lot more points of sale to cover.
    
    My opinion is, that in many, many cases it has been a lack of will
    to do the task not the difficulty of the task, which has generated the
    present problems.
    
    Being too satisfied with oneself does not generate a will to improve 
    things and DEC certainly was VERY satisfied with oneself in middle
    eighties.
    
    --Ritva
     

    
    I was shocked to find that our finance groups use incompatible systems
    that require manual re-entry of data to transfer from one system to
    another.  They are working on something called "SYSTEM-ONE" or
    "ONE-SYSTEM" that will be a single system with no need to hand enter
    data 'n' times.
    
    Jon

    
    Do we (Digital) have a consistant/common chart of accounts yet? Not
    just USA but also Europe and GIA?
    
    
    
    		fred deady
    		wbc::deady

  >  2115.11 DIODE::CROWELL 
  >  I was shocked to find that our finance groups use incompatible systems
  >  that require manual re-entry of data to transfer from one system to
  >  another.

	This is also true in many other functions within DEC,
	due to 'turf wars' of the past.   It is not uncommon to 
	find acres of offices where people read one screen so they
	can rearrange the data and enter it into another.

	Currently necessary, but not sufficient.   mwr

    
>    Every single component from our stock is still ordered against a
>    product code, isn't it. To my understanding, computers don't care very 
>    much whether they have 10 or 1000 brands to calculate. 

	So, do they just order my brain, or my arm?

	I have different codes depending what type of consultancy I give, and
	the duration.
	The amount that I quote for my services, and the amount the 
	salespeople allowance means the invoice is never the same twice.

	The pice of value added services depend on the specific value the 
	customer will get from those services.
	
	Heather

    re .14 and others
    
    Digital has it now--there's a tool called Jabberwocky (conference
    IE::JABBERWOCKY) whose purpose in life is putting a single interface
    on top of disparate systems.  It can hide the differences, can do
    the equivalent of copying from one screen to another, and so on.
    
    It's worth a look in those cases where you have several old systems
    which work well but are incompatible and where lots of information is
    being read off one system only to be re-entered into another.
    
    		-John Bishop

    You can't solve this one just with technology.
    
    You must have heard about the orders which are placed in the last weeks
    of the fiscal quarter or year which allow (whoever) to meet their
    targets. Then 3 days into the next fiscal they are "unexpectedly"
    cancelled. Burger King don't have that problem.
    
    You must have heard that we are in the "systems integration" business.
    On a typical systems integration project, I bet we don't know whether
    we *really* made money when the project is finished, let alone at any
    individual quarter end or year end. Burger King don't have that
    problem.
    
    Burger King's customers generally pay at the time of delivery of their
    goods (if not sooner). Ours don't. Sometimes if we really foul up they
    may not pay us at all and the lawyers will do their best to see that
    DEC pay the "customer" (maybe Burger King have problems with
    lawyers?).
    
    There's more to this than Jabberwocky. It might well help reconcile
    what's on the books, but how realistic is what's on the books.
    
    regards
    john

    I believed that we were talking about revenue. Even systems integration
    revenue must be fed into the system. It must be done under some code
    even now, a code which allows different pricing.
    The fact, that in Digital because of a matrix organisation the same
    revenue is calculated under multiple headings is then another matter
    and does not clarify thing very much.
    
    Profit is totally different problem. I personally know areas, where the real
    cost is impossible to load to an actual cost generating account, but
    rather an average per head cost is used. As a result, how could we
    know what is the profit.
    
    --Ritva
    have accurate facts of what is profitable and what not.

    In the days when I was in the now-defunct ESG, I was a marketing
    manager, and it was impossible (this was 1985 to 1989) to find out from
    Digital's booking system (CERTs, etc) what business was booked to whom
    and why. For example, one would hope that if a computer was sold for
    schematic capture of electronic circuits, it would be registered as
    having sold into that market, right? Also, of course, the type of
    computer, the industry of the customer, the department, and a number of
    other important things.
    
    Wrong, and it's still wrong. There was too much turf in keeping things
    hazy. All marketing managers invented their own numbers and hired
    outside market consultants to produce reports that backed up their
    opinions, then acquired more resources (read bigger empires) by dint of
    force of personality and who they knew, rather than the facts. CERTs
    were only used to back up claims on mainly an anecdotal basis, and
    still are. Any big win is trumpeted to the hilt, because it's hard to
    find solid evidence of large markets!
    
    A perfect example was the masterful job Henry Ancona did in training a
    large portion of his resources to do nothing but spend a great deal of
    time with field sales and operations, to ensure that the maximum
    possible CERTs were credited to All-in-One. If you read that marketing
    group's reports correctly, nearly every VAX sold for years was sold
    principally because of All-in-One. What was the added value to Digital
    of those people, who spent all their time checking CERTs and phoning
    sales managers and schmoozing with District Managers and buying them
    big meals out and giving sales people gifts for booking their CERTs
    into All-in-One? None, and it was negative.
    
    Please don't be amazed that this went on. It's a fact, and I can drag
    out any number of people who can confirm it.
    
    Patently ludicrous, but Henry's genius was in playing the system better
    than anyone else. The corporation's confidence in those numbers
    ultimately meant that All-in-One received disproportionate resources
    and management attention, while those in the advanced market segment
    of engineering, for example, languished. The end result, of course, is
    that we held on to "big, timeshared" computing for too long and didn't
    hear the desperate screams for workstations and UNIX until too late.
    
    Bill Steul never tried to fix this fundamental problem when he was
    manager of ESG, by the way, to the dismay of many of his subordinates,
    including me. I suppose he had his own reasons, but I can only assume
    that he was happy with the murk and cloudiness of the numbers at the
    time, hoping that they would work to his advantage and not wanting to
    rock the boat.
    
    Peter Smith is a significant culprit here, also. It was his
    responsibility to see that this was fixed, but up to now it has only
    ever been lip-service. Here are some things that need to be put right:
    
    	Field sales must be REQUIRED to carefully register the applications
    	market, industry, type, etc. for each sale, rather than some
    	accountant in the sales office.
    
    	It must be simple, and even useful to the sales people who must
    	comply.
    
    	A national, if not world-wide database must be assembled, with 	
    	simple ways of querying for any angle, be it market, product type,
    	specific customer or industry, etc.
    	
    	That there be a purge for truth and honesty and that the system be
    	instilled as a practice, not just as a policy.
    
    Here's a little story that should embarrass every one of us. Pilkington
    Glass (the largest in the world at one time, inventors and still
    holders of the major patents for plate glass, float glass and fibre optics)
    have been using IBM computers since the early 1960s, and have always
    been able to tell you, instantly, every item of glass sold, by each
    licensed manufacturer, globally, through distributor all the way down
    to the glazier who fitted it, by type, market, etc.....
    
    Sad, eh?
    
    Ray

    I agree with Ray in .19.  Being a COMPUTER COMPANY, we should have ONE
    system that is able to do what we want it to do, easily, instantly and
    efficiently.
    
    I've worked for another Fortune 100 that is able to do this.  They have
    one system that:
         
         1. Sales uses to prepares their quotes
         2. Order Management uses to log and track the sale through
            shipment
         3. Credit/Collections uses to invoice and track receivables
         4. All other supportive functions, engineering, field service,
            finance, manufacturing, etc uses to do their portion of the job.
    
    The level of access you have depends on your particular function and
    need.  Reports are easy and instantly, everyone's data is on THAT SAME
    SYSTEM.
    
    This similar type of system can and must be developed for Digital.  For
    instance, there is no need for Sales to do a quote in AQS, have OMS
    re-enter the sale in FOCUS, CSRA re-enter the system in SMART, and the
    Revenue Unit re-enter it in CRS to invoice.  I know whenever an order
    is certed, my OMS rep has to make at least a half dozen physical copies
    of the order report and send it to various people who need to know this
    information.  In some cases, it is needed only to justify their existence. 
    In others, it is because our myriad of systems do not talk to each other.
    
    I remember when I first came to Digital that I asked someone in my
    dept. "why do we do things this way?"  The answer was that is was the way
    we always did it and we have yet to find a better way of doing it.
    
    I think we haven't WANTED to find a better way because the powers to be
    within DEC have empires built to justify their existence.  If BP would
    first eliminate these empire builders, their empires would fall and we
    would begin to look for better ways of doing things.  Then, and only
    then, can we really begin eliminating where the FAT is on our expense
    side of the ledger and those that are only hanging on for their own sake 
    because they don't know anything else to do would be gone and the real
    performers in all organizations would be free to just do their jobs and
    get Digital righted.  
    
    It would then be easy to differentiate between the doers and the hangers on
    after the empires are stripped away.
    
    Regards

    I agree on the symptoms.  We could have effective administrative
    systems if we wanted them.  We haven't wanted them because they would
    cut into the negotiating power of the princes, dukes, and barons.  It
    has been legendary that anyone could say "No" and nobody could say
    "Yes" for Digital.  Maybe it will be different under BP.  If it isn't,
    I expect that there won't be a Digital to worry about in the year 2000.
    
    Dick

RE:20

	I agree that our administrative systems need work, lots of work.  But we
have been making progress in the last few years.  First of all it is possible to
load a quote from AQS to FOCUS, the hardware order admin system, FOCUS keeps 
custody of orders, transmits them to fulfillment via the order Routing Switch,
invoices them.  Feeds from FOCUS go to other applications including a data ware-
house that people could use instead of using paper.  On the services side with
the implmentation of SMART V4.9 and SIS, (Single Invoicing System), this month, 
80% of the service contracts on SMART are eligible to be sutomaticly transmited 
to SIS withno manual entry needed.    There are also two programs starting that
will link the product and services admin systems together.  

	With the reorganization of US Logisitcs and Services many of the old 
fiefdoms have gone away.  Now it is possible to integrate our admin systems
because they are all in the same organization.   

    
    	Having spent the earlier part of my career in IS, i'm well
    aquainted with the nonsense that exists in our information systems. I
    often described going to the office each day as getting in a 3 point
    stand, and charging head first into a brick wall with no helmut! It
    really was that stupid an existence!
    
    	I am impressed with the Supply Chain process that is underway. It
    certainly has BP's support, and it very clearly provides a rather
    sharp stick with which one can pop bureacratic balloons! There will be
    pain and disruption along the way, but information systems are not
    going improve until the process improves with it! The fact remains
    that they are developed to mirror the process and many a battle between
    IS and their customers and in some cases millions of bucks have been
    lost in the name of protecting empire!  Supply Chain seems to have
    enough inertia/clout to expose the various "departments of silly walks"
    and roll right over them.
    
    bob

    
    	The replies seem to be wandering away from the original question
    	on what was said on the DVN.
    
    	From what I remember, Bill welcomed the Finance Community, :-)
    	said we ( Digital) are doing a lousy job for the Shareholders,
    	mumbled about overstaffing, and said that there used to be
    
    	6,500 in Finance
    
    	Now got 4,700
    
    	and will get to 3,000
    
    	So you got some blood letting to come.
    
    	(Perhaps the figures are a bit out, but not much)
    
    	N.

    as a good manager i worked for once said, "doesn't matter how many
    times you count the revenue it doesn't produce any more."

(Forwards deleted)

         Attached is the key notes from Bill Steul's DVN 
         transcript. Please distribute to the Finance organization(s)
         that you are representing on the FCTF ASAP. Thank you in 
         advance for your support.
         
         Best Regards
         
         Gigo and Julie

From:	NAME: GIGO LEE-TAYLOR @AKO          
	FUNC: GIA FINANCE TRAINING            
	TEL: DTN 244-7598                     <LEE-TAYLOR.GIGO AT AKOV12A1 at AKOMTS at AKO>
Date:	16-Sep-1992
Posted-date: 22-Sep-1992
Precedence: 1
Subject: Script-Bill Steul's DVN                                                1



*************************************************************************

         KEY NOTES FROM BILL STEUL'S DVN BROADCAST TRANSCRIPT

                  
              TITLE: BILL STEUL'S ADDRESS TO WORLD WIDE FINANCE
  
*************************************************************************



Bill Steul- Vice President of Finance and CFO of Digital Equipment 
Corporation.  


Digital and where we're going 

 - I feel especially privileged to be the leader of the Finance function.  
I've spent twelve years in Finance at Digital and had a career in Finance 
before DEC.  Over the last eight years, I was in Marketing and 
Engineering Operations. I will use that experience to lead the Finance 
function and all of you toward Digital's future of greatness.  

- We've been a very successful, growing, and prospering company.  We were 
a model for other companies to follow for many years in our history.  
However, in the last five years,  the market changed dramatically.  Now 
we're faced with the task of looking at the whole company and making it 
efficient, making it competitive, and building a base for the future. We 
need to get Digital back to a profitable position. We can do this, this 
is a do-able job.  We still have the most conservative and strongest 
balance sheet in our industry.


- We have a lot going for us. We have a lot of good people in Digital. We 
have significant resources.  We're able to solve our problems and to go 
forward into the future with a sense of purpose and a sense of direction. 


- Bob Palmer has made it very clear that he wants to maintain the values 
that Digital has as a company, but he wants to use the Finance function 
to help him run the company and to establish Digital as a leader again in 
our industry. Bob wants to run the company by the numbers. He wants us to 
be data driven.  He wants us to have the kind of analytical capability to 
understand problems and opportunities at any point in time, so we can - 
go forward with a very competitive and analytical approach.  

- Jack Smith has also said that he wants particularly, the Controllers in 
our organization, to help him implement the downsizing and restructuring 
plans that are built into our operating plan for the next two year. We 
will help to identify redundant procedures and processes to re-engineer 
and change to return the company to profitable growth.  
 


Finance Eight (8) Priorities

In July, I put together a list of Finance Priorities and reviewed it with 
Bob and the Executive Committee. Bob and the Executive Committee agreed 
that these were indeed the priorities for the Finance function. 


  1. To help the CEO, the COO, and the business managers of the Company 
finalize and implement Digital's eight quarter Operating Plan for FY93 
and FY94. 

  2. To develop an accurate FY93 cash forecast and financing plan that 
will support our operating plan and conserve cash. 
  
  3. To organize a cross-company effort to develop three- to five-year 
strategic plan for Digital that ties together all of the business units 
and geographies world wide into a common direction. So, an emphasis on 
Long Range Planning while we're putting together and implementing the 
Operating Plan for the next two fiscal years.  

  4. To assess the condition of Digital's world wide Finance function and 
determine what is needed to make it the best in our industry. 

  5. To insure that the company has adequate internal controls to manage 
assets and expenses, outside contracts and commitments in all business 
units, functions and countries. 

  6. To improve management reporting so that the business unit managers 
have the information they need to execute company approved plans for 
which they are responsible.  

  7. To analyze and recommend changes to pricing policy which materially 
impact the company's profitability. 

  8. To quickly respond to the CEO, the COO, the Management Committees, 
and the Business Unit Managers, by providing expert business and 
financial analysis of investment proposals, business operations, business 
models, and organizational alternatives.  In other words, be very 
responsive to the management team at Digital, not only supporting them in 
what they're trying to do, but also warning them when things are going 
wrong, when things are going off course.  

- Now I believe that these eight priorities will form the basis for all 
of our plans and actions in the Finance function over the next eighteen 
months, and I'm looking forward to working with all of you in making 
those priorities a reality. 

-  We also have a systems effort going on to dramatically streamline the 
information collection and processing effort that supports us as a 
Finance function.  We have that in place, it's going forward, and it's 
made a good deal of progress already and all of us should see the results 
of that very shortly.  

Finance Organization 

We have a relatively flat organization, with a fairly large number of 
people reporting in to me.  We actually eliminated a level of management 
from the last organization we had under Jim Osterhoff.  The goal here is 
to balance our organization so that we do an exceptionally good job of 
the traditional Finance functions, treasury, control, audit, and provide 
a high level of support to Digital's business units, to our functions, to 
our geographies. Whether we're dealing with the product dimension, the 
service dimension, the industry dimension, or the geography dimension, we 
are in a position to integrate the various activities of the company 
through the way we have structured the Finance organization.
It's a non-political organization.  We don't expect to have any problems 
in dealing with each other, we expect to be able to wear a Corporate hat 
. We expect to not only support each individual business unit, but in all 
cases keep the company's best interest in the forefront of everything 
we're doing as we go forward. 


                              FINANCE


CORPORATE

     Controller:                      Vin Mullarkey
     Treasurer:                       Elene Jacobs
     Internal Audit:                  Tom McEachin

BUSINESS UNITS/FUNCTIONS

     SME/Departmental Computing:      Jim Flanagan
     Global Information Systems:      Carol Reid 
     Industry Business Units/
     Marketing:                       Karen Kupferberg
     Software Business/Eng:           Bob Cohen
     Service Business Units:          Rich Butler
     Manufacturing/SCO:               Marian O'Leary

GEOGRAPHIES

     United States:                   Tony Wallace
     Europe:                          Werner Oppliger
     GIA:                             Dave Spratt

SUPPORT

     Human Resources:                 Geoff Sackman
     Finance                          Steve Behrens
                
 

- The Controller will be the driver when it comes to all issues of 
budgeting, planning, management reporting, performance analysis, fiscal 
accounting, and internal controls.  

- The Treasurer will lead the company in cash management, balance sheet 
management, tax, insurance, and related matters. 

- The audit function will be our process for assessing where we are as a 
company in terms of our business practices, our internal controls, our 
ability to plan and manage our operations to those plans as we go through 
our fiscal years. 

- The Business Units, the functional Finance support people, will be 
responsible for helping to determine corporate policy and procedures and 
making sure that we have good financial processes and good management 
practices in all of our operating units. And of course, I stand ready, as 
a member of the Executive Committee, to support all of the efforts of all 
of the people in finance. 



Finance Organization Downsizing

- I know a lot of you are concerned about further downsizing of the 
Finance function. We've already done a very good job there; we've reduced 
the world wide Finance function force from over sixty seven hundred 
people in 1988 to about forty-six hundred people today.  There has been a 
goal of three thousand communicated previously and some people think that 
eventually the number of financial people in the company could even be 
lower than three thousand.  I think I'd like to take a very careful and 
informed look at where we stand with our work management efficiency and 
downsizing program, before we commit to anything below the three thousand 
level. 


Finance Roles and Responsibilities

-  We need to keep up our efforts in the internal control area in the 
basic Compliance/Accounting/Reporting area, so that we will be credible 
and have the integrity as an organization to also be business partners 
and to help our line management run the company.  Without good controls, 
without good fiscal reporting and compliance in all of our geographies 
and all of our legal entities, we will not have the ability to work with 
Digital management solving the Company's operational problems. It's very 
important to all of us to protect and keep our fiscal accounting and 
reporting going, and to maintain the high integrity they've been in the 
past.

- In the management reporting area, we have a lot of improvements to 
make, if we're going to run by the numbers, track performance, improve 
predictability, and make sure we're on plan.  We've established a goal to 
get to a one-week reporting cycle at the end of each quarter for all of 
our management reporting.  When we've reached that one week goal which we 
hope to achieve in the next two quarters, we will then go to a monthly 
based management reporting system. It is the effort in the systems work 
that will pay off, as we are able to get to this kind of a goal. Like our 
company, we have to be very flexible and fast on our feet in terms of 
being responsive to our customers, our line organization, and I'm 
confident we can get there.  


Closing

- If there's one message I'd like you to think about in terms of our 
orientation to all the things we're trying to do, it's to keep our 
Shareholders in the forefront and ask what we're doing for them. 


- We must remember that as we invest in new products, new technology and 
new markets, it is our Shareholders' money that we're investing. We, 
particularly in the Finance function, are the stewards for our 
Shareholders' investment. We have to look at all of our decisions in the 
company from the point of view of whether or not we are benefiting our 
Shareholders and providing a return for them for the capital that they 
are investing into Digital.  Now, when we look at every investment 
proposal, every business plan, every operating plan, we will be asking 
the question:  Will this plan increase Digital's profitability, return on 
assets, return on equity, and will the Stockholders benefit from this 
investment.  That is an over-arching concern that we should all have 
wherever we are in the Finance function, wherever we are in the company.  
When we can satisfy our Shareholders it will mean that we have satisfied 
our customers, we have satisfied our employees and our suppliers.

-  It's been good to talk to you, I realize this is a one-way dialogue.  
I hope you will comment on what you've heard. I hope that we will have a 
chance to meet face-to-face, to have a dialogue, and to answer your 
questions and concerns in the next two or three months as we go forward.  
Thank you very much and good day.

    
    Well, the "light" (or focus) is no longer on the customer; however, 
    those in the field have known that for quite some time now.
    
    note:  Observe that stockholders is in capitals; customers are _NOT!