Volume 9, #3___________________________________________________________________ March, 1990
"MGMT MEMO" was written by Richard Seltzer in Corporate Employee Communication for the Office of the President. It was written for Digital’s managers and supervisors to help them understand and communicate business information to their employees. You can reach Richard at firstname.lastname@example.org
Business Outlook In The U.S. by Dave Grainger, vice president, U.S. Sales & Service
Manufacturing Launches Series Of Meetings Open To All Employees - Provides Broad Picture Of The State Of The Business
Opportunities In Eastern Europe - Joint Venture In Hungary
U.S. Finance Realigns To Support Account Focus by Steve Behrens, manager, U.S. Finance
Worldwide Environmental, Health & Safety Policy Adopted
New Geography Focus For Environmental Health And Safety Team
Earth Day 1990
Monitoring Research On Health Effects Of Office Equipment by Larry Cabrinety, group manager, Video, Image and Printer Systems; and the Corporate VDT Task Force
Mid-Range Systems Focuses On Client/Server Computing by Bill Demmer, vice president, Mid-Range Systems Business
The Importance Of Cooperative Research by Jack McCredie, manager, External Research Program
Sales & Distribution Systems - New Product Marketing Group
Market-Leading Volume Credit Policy For Digital Accounts by Jay Atlas, Vice President for U.S. Indirect Channels Sales
‘Headcount Equivalency’ To Be Used For FY91 Budget Planning
Life Balance Strategy
‘Engineers Into Education’ Program
GIA Creates New Program Offices
Changes In The VIPS Organization
Don Hunt Assumes New EIS Manufacturing Position
Steve Bergeron To Serve On National Quality Board
Enhancements Made To U.S. Customer Services Organization
Perhaps the best characterization of doing business in the 1990s is planning for and managing change:
o Our business is changing from three distinct components - Systems, Enterprise Integration Services, and Customer Sendees - to one integrated set of offerings requiring streamlined decision making for our Sales Account Managers.
o Technology has advanced so rapidly that the demand is now for desktop systems with full application and network support.
o Much of our opportunity is in project business - which means that our required skill sets are weighted heavily in the area of systems consulting, project planning, and project management.
o Alliances involving solutions providers and distribution channels are more critical than ever.
The key to success in this environment is responsiveness. To become more responsive, we have made major changes in our operating style and in the organization: o We developed and implemented a new plan that makes the account the primary focus of our
business. This is how we plan, budget, and invest.
o We created an International Accounts Program Office to ensure global competitive positioning on opportunities which transcend U.S. boundaries.
o Through the first Career Opportunity Days, we moved 350 people from internal, indirect jobs to new careers in Sales and Sales Support. Through Career Opportunity Days II, we expect another 400 indirect people to accept new, direct field careers.
o We’ve reduced overhead positions at headquarters by nearly 600, and that effort is continuing.
o We implemented the Opportunity Investment Plan through which we developed integrated account and unit plans, identified significant incremental business, and introduced the concept of Return On Responsibility (ROR).
o At DECtech (Digital Consulting Conference for Manufacturers) recently held in Phoenix, Arizona, our sales people and customers consistently responded with enthusiasm to Digital's ability to provide total solutions to meet their particular needs. We will continue to focus on integrated solutions and the benefits of working together.
o Plans are underway for DECworld ’90, to which we will invite business and Information Systems executives to come together to see "Information Technology at Work." This event is scheduled in Boston, July 9-August 1, at the World Trade Center.
o We increased our U.S. training budget by some 60% to strengthen our investment in building competency. Summer Session and DU:IT are two examples of these training initiatives.
o The following additional 3-day training programs are being offered for Sales and Sales Support people:
Discrete Industry Manufacturing Enterprise (DIME), Irvine, CA, February 27-March 1; Process Industry, Atlanta, GA — April 23-26 for Customer Package Goods, Oil & Gas, and Metals & Glass, and April 30-May 3 for Chemical, Pharmaceutical, and Forest; Discrete Industry Solution Systems Training, May 7-10, Boston, MA, May 14-17, Los Angeles, CA, and May 21-24, Detroit, MI.
The following are a few examples of new key wins for the Company:
o Dow Chemical recently chose Digital Equipment as a key business partner for a global project that will involve building a standard hardware platform and an applications software system to serve as an intelligent front-end to their proprietary process control system. This project is critical to all of Dow's process manufacturing worldwide and is the first time they have chosen to involve an outside company in a project so central to their company.
To win this project our strategy centered on showing Dow that we could be an extension of their own organization and that Digital had the right resources to combine hardware design, applications development, and systems integration to assure success. A team was built consisting of Sales, Software, Computer Special Systems (CSS), and Customer Services resources, along with senior Digital management, to reinforce our position as a key provider of Enterprise Integration Services.
o Digital’s ALL-IN-1 proposal to Long Island Lighting Company (LILCO) has been accepted, ending a long and hard-fought battle with IBM and OfficeVision. This represents the first major project for Digital at LILCO and opens the door to many other application opportunities.
o A recent sale to the marketing department of Quaker Oats represents the first Digital win at Quaker outside of its manufacturing plants. This follows the pattern established at MARS, Tropicana, and other accounts in which critical problems in sales and marketing have opened the door for Digital to move in on IBM territory.
The sale was skewed towards services and mirrors a trend in this market of the customers desire for solutions vs "boxes and tools."
These wins represent new opportunities for Digital. We need to learn from these experiences so that we can replicate these solutions as new opportunities approach.
We are making progress. It is often arduous. And the new challenges spring up faster than we ever believed possible. But there is no company better positioned for success.
On Feb. 9, Manufacturing began a series of meetings intended to provide information about what is going on in the business as a whole so people can make informed decisions in their particular jobs.
"People need to hear about business conditions," explains Bill Hanson, vice president, Manufacturing Operations. "Give them information, and they'll do the right things."
"Times are changing and we need to know how well we are doing and where we should put emphasis so we can be more supportive of one another’s efforts and of the company’s overall business objectives," adds Linda StClair, group Personnel manager, Manufacturing. "If we are restricted to our own little pieces of the business, we miss the opportunity to work as part of a total integrated enterprise. We need the sense of totality."
The first part of each of these meetings deals with business data. The rest will consist of "feature" presentations on timely topics relating to how Digital is realizing its manufacturing visions:
o developing the best people in the industry,
o products that never fail,
o shortest cycle time in the industry,
o lead in defining competitive manufacturing, and
o competitiveness independent of volume.
Meetings will be held the second and fourth Friday of each fiscal month (March 9, 23, April 13, 27, etc.) at 8-9 A.M. in the General Doriot Conference Room at the Mill in Maynard, Mass. All employees are welcome. Plans include broadcasting future meetings using the Digital Video Network (DVN) once the appropriate links are in place.
"The dramatic changes taking place in Eastern Europe have created new opportunities and challenges for Digital," notes Cliff Clarke, manager, International Trade and Policy. "On the one hand, the pent-up demand for computer equipment to support the integration of these economies into Western market economies has created a significant opportunity for sales of Digital’s computer products. On the other hand, major Digital customers and OEMs in Europe and elsewhere are moving into these markets themselves, and Digital needs to be able to support their needs on a global basis, as they market their products and services to Eastern European customers."
As a first response to these complex issues, Digital has announced the formation of a joint venture company to sell and sendee computer systems and solutions in Hungary. Joining Digital in the venture are KFKI (Central Research Institute for Physics of the Hungarian Academy of Sciences) and Szamalk (Computer Technology Applications Enterprise), two of Hungary’s leading engineering organizations.
The new company, Digital Equipment (Hungary) Ltd., will begin operations on April 2, 1990. It will market Digital’s MicroVAX family of computers in accordance with all applicable laws regarding the export of computer products to Hungary. Initial users will be those in non-sensitive commercial and infrastructure development areas. It will also provide a range of customer services including hardware maintenance, training, and software support.Digital holds a 51 % share of ownership and KFKI and Szamalk each hold 24.5%. Digital also has the option of acquiring 100% of the joint venture company and forming a wholly owned subsidiary in the future.
"History has shown that information technology can often be a lubricant of change," said Alberto Fresco, vice president and country group manager, Digital Europe. "As Hungary moves forward with its plans to restructure its economy, computers will play an important role, facilitating and complementing the open exchange of ideas and information. Digital is enthusiastic about the opportunity to participate in this process and to assist in the modernization of Hungary’s infrastructures and industries."
"Our major customers, both OEMs and end users, especially in Europe, are making aggressive plans for participating in the emerging markets of Eastern Europe," adds Cliff Clarke. "Digital is committed to supporting the needs of its customers on a global basis, even in Eastern Europe. We also intend to take advantage of new business opportunities in the modernization of Hungary’s various infrastructures. Hungary recognizes the need for world-class information technology as it builds modern banking, telecommunications, energy, manufacturing, and public administration infrastructures."
"Digital's sales efforts prior to the 1980 Afghanistan embargo created a strong interest in our products, which is still in evidence today," he notes. "We are working with customers to qualify these opportunities and move forward.
"Because of the size of the population and its traditions and institutions, Eastern Europe has the potential to become an enormous opportunity and an important market for Digital. For now, we need to assess the current reforms and their relevance to Digital, and develop plans for supporting our existing customers as they expand their business in those countries.
"A major challenge in meeting these opportunities rests with the U.S. Government’s export restrictions. Digital complies with regulations that specify which products and applications can be exported. Some of the restrictions still in place today were developed during an era of hostility and mistrust in East-West relations, and are not consistent with the current political and economic climate. Currently, U.S. export license approvals can be obtained for PDP-11 and MicroVAX II systems for most commercial and non-strategic industrial applications. We are working to extend the range of licensable systems, and we have been encouraged by recent statements and actions by the U.S. Government and COCOM (Coordinating Committee on Multilateral Export Controls) in support of a more open and liberalized set of regulations."
Cliff concludes, "As a global company, we want to continually test these boundaries and establish precedents that lead toward change and broader markets for us and our customers."
As part of the company’s continued efforts to simplify and streamline business operations, as well as enhancing productivity, the U.S. Field Finance organization has redefined its role, work and organizational structure.
Our goal is to optimize the value of Finance resources more efficiently and effectively. This will require clarifying the work, realigning the organization, and eliminating redundancies.
Since the Fall, over 200 volunteers from Finance and other organizations have assessed the work of Finance to determine current and future work requirements. The work of Finance now falls within these buckets: fiduciary, business partnership/leadership, customer interface and human resources; and is subdivided further into these major categories: customer analysis; business analysis; common financial planning; modeling and tools; controllership; credit; and human resources.
We will provide financial support to Account, Unit and District Managers for both systems and service business throughout the U.S. This work includes financial analysis, business and financial reporting, forecast and budget support and business controls.
To position our resources closer to customers and clients, we have created four U.S. Finance support centers, managed by Ted Hopson, Dave Stevens, Dale Emerson and Gora Dutta. These centers will be delivering the work when and where it is needed. In conjunction with the line and finance people within the geographies, these four managers will ensure that all of the financial services get delivered in the most logical way. For example, we may move some resources very close to the customer or Sales Unit Manager; while other work might logically be consolidated into one location or vertical staffing may be appropriate in some locations.
The work of Finance is very much the same in almost any organizational structure. We pay bills, issue invoices, close the books, do business analysis, do credit checks, collect cash, and do modeling, financial planning, investment analysis, etc. There are benefits in organizing ourselves around that work, rather than around the company’s organizational structure. Our ability to organize around the work helps us become transparent to those organizational changes while also enabling us to improve our quality and ability to deliver excellent service.
For example, accounting and controllership work will be combined to eliminate redundancies and improve effectiveness. This work includes fiscal reporting, revenue and billing, disbursements, internal controls and asset management. Andy D'Agostino will be functionally responsible for this work.
Credit and collection activities will continue to be the functional responsibility of Bob Martin, and Human Resource activities will continue to be the functional responsibility of Barcy Proctor.
The work of developing integrated processes and systems for forecasting, budgeting, U.S. Business Modeling, common management reporting, plus integrated measurements and metrics, will be led by Bill VanAtten.
Financial support to the customer groupings of Volume, Government and End User includes revenue and margin forecasting, investment analysis, business models, value-added pricing and competitive analysis. Joan Gray will have this responsibility for Volume, Bill Gervais for Government and Rick Ryan for End-User.
The work of business analysis, which encompasses revenue, expense and asset analysis, as well as investment analysis and appropriate business models, will be done by Frank Paglia for Customer Services, Jay Zager for Sales/Systems, on an acting basis, Mike Bilbao for Enterprise Integration Services (EIS), and on an acting basis, Jeff Brasor for Administration Services.
We know that there is some duplication of effort in our Finance function today. When we complete our evaluation of the work, there will be some jobs that may not be necessary. Fortunately, there are opportunities/options within Digital in the sales support environment, in other administrative functions and in sales.
We have taken the initiative early to prepare ourselves for expected changes in the business. We have made great strides, and our new organizational model is helping us to position ourselves and Digital to meet the ever-changing challenges of our business.
(To promote two-way communication within the Finance organization, Steve Behrens recently hosted the first of a series of quarterly live Digital Video Network (DVN) broadcasts for Field Finance employees. The next broadcast is scheduled for May 2.)
In support of Digital’s commitment to doing the "right thing" in the realms of health, the environment and safety, MGMT MEMO will regularly report on these matters. For example, the following four articles deal with the company’s new worldwide environmental, health and safety (EH&S) policy, the new geographic focus for the EH&S team. Earth Day 1990. and research on health effects of office equipment.
Digital recently adopted a policy which defines its environmental, health and safety (EH&S) commitment. The scope of the policy is worldwide. It applies to all Digital operations and interests, including subsidiaries. Its purpose is to provide management direction, strengthen EH&S programs and position Digital as a model.
"Although embodied in our core values, our corporate EH&S commitment needs to be formalized," noted Ken Olsen, president, in a cover memo to the policy. "Today, as the world faces growing environmental problems, we have a unique opportunity to provide stronger leadership in achieving national and world progress in this area. Business managers are responsible for adhering to these policies. In addition, each Digital employee has responsibility for helping to maintain a safe and healthful work environment. Finally, as a corporation, we will seek solutions to global environmental problems through our products and information technology."
The policy simply states that "Digital will conduct its business in a manner that conserves the environment and protects the safety and health of its employees, customers and the community." It spells out the seven core principles on which this is based, and outlines programs and actions that Digital undertakes to support them.
The principles are:
o Provide our employees with a safe and healthful workplace.
o Protect the environment and the community.
o Conserve natural resources.
o Design, produce and distribute products in a safe and environmentally-protective manner.
o Communicate known hazards, along with necessary safety precautions, to our employees, customers and the community.
o Evaluate potential hazards associated with our products and operations.
o And consider full compliance with the law as being the minimum acceptable standard.
"Being world-class today requires companies such as Digital to be proactive and exemplary in all aspects of EHS," explains Dave Barrett, Corporate Manager of EHS. "We can't meet our business goals unless we protect employees, produce the safest products possible and eliminate most pollution. In addition, customers and world governments are looking to us for leadership as they grapple with similar issues."
Digital’s environmental policy is based on a few key tenets:
o to provide state-of-the-art safety and health programs to our employees;
o to meet and, where appropriate, to exceed government regulations related to the environment (in locations where there are no regulations. Digital sets its own stringent standards);
o wherever possible, to use non-polluting and energy-efficient processes in designing and manufacturing products;
o to use our technological expertise to aid governments and other industries in finding solutions to environmental problems; and
o to conserve natural resources and protect the environment and the communities in which we do business.
"Our strategy for addressing EHS issues is to reinforce business ownership," says Dave. "Business managers must fully understand their EHS responsibilities and aggressively manage them, including incorporating EHS considerations into business plans. We don’t need an army of inspectors. We need a high awareness level, clear lines of business accountability and a support system. Policy-related training is presently being planned for key business managers.
"Our EHS strategy is also attempting to involve employees," Dave continues. "For example, consider the European Services and Supplies Center in Nijmegen and Oudenrijn, Holland. In the fall of 1988 the Center kicked off a business-wide employee environmental campaign to reduce the use of polluting materials. The program, which has been commended by Holland's Minister of the Environment, resulted in a series of employee efforts that impact the environment in which they work. Specifically, efforts are under way to implement using only recycled paper, using batteries without mercury and better reuse of packaging material.
"Digital’s worldwide Waste Management Program offers exciting opportunities for employee involvement both to protect the environment and to reduce waste."
Corporate goals and policies are set by Digital's Environmental, Health and Safety Board (EHSB), which includes representatives of the company’s major business units and senior EH&S staff. ESHB played a key role in developing the new worldwide policy. The Corporate EH&S organization provides strategic and global focus, and geographic EH&S teams provide operational support. (See the related story which follows this one).
(Each employee will receive, at work, a copy of the full worldwide EH&S Policy.)
New geography-based organizations for Environmental. Health and Safety (EH&S) are being formed for the U.S., Europe and GIA. These new groups will provide EH&S operational support to all businesses in their areas. The Corporate EH&S organization will become strategic and global in focus.
Joe Permatteo has been named manager, U.S. Environmental. Health and Safety, reporting to Lou Gaviglia. vice president of U.S. Area Manufacturing. Joe joined Digital in 1980 as part of the Corporate Property Development Group and most recently was group manager of EH&S for the Storage and Information Management Group.
Jerry Gaudet has been named Environmental. Health and Safety program manager for GIA Manufacturing & Engineering, reporting to Jim Melvin, Technology Manager, GIA M&E. Jerry has returned from a two-year assignment in Bangalore, India, where he successfully established a Digital manufacturing entity. Previous to joining Digital, he had numerous overseas manufacturing management assignments.
Jeff Sutton is Environmental, Health and Safety manager for Europe, reporting to Dick Esten and Hans Dirkmann. Jeff has extensive experience in EH&S and has worked for both the United Kingdom Health and Safety Executive and the United Kingdom Waste Disposal Agency. Immediately prior to joining Digital in August 1989, Jeff was co-founder and Technical Director of American Medical International Occupational Health Ltd., where he headed a team of occupational health and safety consultants.
Dave Barrett, corporate manager of Environmental, Health and Safety, will provide functional guidance for the geography managers.
Senior business managers are responsible for managing EH&S risks and insuring compliance with corporate policies and applicable laws. The geography EH&S groups will provide overall program management for EH&S and Waste Minimization Programs and provide technical support to the business units. They will lead the company’s effort in these areas and will develop cross-functional teams including design engineering, quality, finance, personnel, distribution, materials and purchasing.
The new U.S. organization is located at 5 Carlisle Road (WJO2-1/C11) in Westford. Massachusetts 01886-0669. A list of staff members, phone numbers and nodes is available in the Corporate VTX Library under keyword "EHS".
Earth Day 1990, a worldwide, non-centralized celebration, will be held on April 22, 1990, the 20th anniversary of the first Earth Day. Earth Day is intended to mark the beginning of a long-term commitment to building a safe and sustainable planet. Governments, environmental groups, broadcast and print media, community groups and corporations will be planning activities that will encourage individual participation and commitment to improving and protecting the environment.
Digital will use the occasion of Earth Day to reaffirm its commitment to excellence in the areas of environment, health and safety. In conjunction with Earth Day, "Earth Vision" posters detailing the seven tenets of environmental, health and safety excellence will be sent to each site. In addition, each employee will receive, at work, a copy of the full worldwide EH&S Policy.
Many sites are sponsoring appropriate Earth Day activities. Managers are asked to encourage and support their employees' participation in these activities.
Digital is committed to developing and manufacturing products that provide the best level of safety to our employees and customers. To this end, Digital carefully and continually monitors worldwide research to assess possible risks, and conducts in-house research to understand users, new technologies and product designs. We are committed to communicating known risks along with the necessary safety precautions to our employees and customers.
Over the past several years, questions have been raised as to whether there are harmful effects associated with the use of video display terminals (VDTs). We formed a task force to monitor this research six years ago. To date, the preponderance of research does not indicate medical harm to users. There are discomforts, however, which proper work-area design will relieve or eliminate. We will inform our employees and customers in the event further research indicates health risks related to VDTs, and also will take appropriate steps to ensure safety.
Several epidemiological studies have been conducted to determine if there might be a relationship between VDT use and reproductive health. Researchers have tried to see if there is an increased incidence of birth defects or miscarriages (spontaneous abortion) among women who work with VDTs compared to women who do not. No causal relationship has been found between VDT use and adverse pregnancy outcome, but some questions that have been raised are now being examined in further studies.
A 1988 report known as the "Kaiser Permanente Study" found an increased incidence of miscarriage among women in clerical/administrative support positions who worked more than 20 hours per week with VDTs. However, other women who reported working more than 20 hours per week with VDTs in other jobs (managerial/professional. blue collar/service. and technical/sales) did not experience more miscarriages. In interpreting these disparate results, the researchers speculated that the miscarriages may be related to other factors associated with clerical jobs, for example, job-related stress.
While these studies have not shown a causal relationship between VDT use and miscarriage, they have suggested the need for studies involving large numbers of women working fulltime with VDTs. The National Institute of Occupational Safety and Health (NIOSH), a U.S. government research agency, is currently concluding such a study. Results are expected to be available in March.
Last summer, the National Institute of Health (NIH) funded a "prospective" epidemiological study. In other words, researchers will directly monitor a group of women over a fixed period of time, rather than using questionnaires to ask women about their experiences over the last few years. This design will control for the possibility of a bias in people’s recall of VDT usage following a traumatic experience. Preliminary results of this study, conducted by the Mt. Sinai School of Medicine of the City University of New York, are expected in about two years.
A few animal studies have raised questions regarding possible health effects from electromagnetic emissions; in particular, very low frequency emissions, (ranging from 60 Hz to about 20 kHz and above), which are common to fluorescent lights, televisions and household appliances as well as computer equipment.
In September 1989 and November 1989, the University of Toronto presented preliminary results of a well-controlled, large-scale rodent study that was sponsored, in part, by IBM. Rodents were continuously exposed to VDT-like 20 kHz pulsed magnetic fields at several exposure levels: four times VDT emission levels, 17 times, 200 times and a sham condition. The results reported to date demonstrate no relationship between reproductive outcome and exposure to pulsed magnetic fields in this experimental study. Formal publication of these results is expected this spring.
Digital routinely designs and tests all of its products in accordance with recognized procedures to ensure that they meet all applicable national and international standards, regulations, and guidelines in the area of electromagnetic emissions. These emissions cover the x-ray, ultraviolet, infrared, microwave and radio frequency bands. However, there are very low frequencies (such as those mentioned above) for which no scientific standards have yet been established. Research is just beginning to develop the knowledge base which would allow scientists to interpret the biologic significance of very low frequency emissions and determine what an appropriate standard would be. Should such limits be established through national or international standards bodies, Digital will, of course, comply with whatever limits they determine are appropriate.
Although VDTs do not appear to pose a health risk, users can take steps to minimize any workplace discomfort and concerns about health effects by adopting several common-sense work habits. In particular, Digital recommends that VDTs be used in environments that have good lighting; comfortable work stations with correct neck, arm and wrist position; and a minimum of distractions (including, for example, excessive noise and cigarette smoke). Digital also recommends that VDT users relax their eyes by periodically looking at distant objects and by taking occasional breaks from VDT use. Individuals who customarily wear reading glasses may find slightly weaker lenses more comfortable for prolonged VDT operation. Pregnant women, in particular, should be sure that their work areas are set up to minimize undue physiological stress that can be caused by working in a somewhat constrained and uncomfortable position for long periods of time.
Our Human Factors Group continually tests and evaluates systems and components from the user point of view, and has done so since 1980. They also visit customer sites to better understand user needs, requirements and productivity issues. This information helps us to identify future needs and to influence the company’s design and development efforts.
Other engineering groups within Digital are current with all the engineering and scientific aspects involved in the specification and design of VDTs. Newly developing technologies are constantly being studied and evaluated for applicability to Digital products.
Managers should remain flexible, sensitive and open to change. They should keep in mind that workplace discomfort appears to be generated by a number of factors. Studies have indicated that people who are required to perform highly-repetitive tasks involving little independent judgment may experience adverse physical reactions. To guard against this concern, users should be given varied tasks, including some that require the exercise of independent judgment; and should be accorded reasonable breaks.
A brochure entitled "Introduction to Video Display Terminals for Managers and Operators" provides guidelines on how to organize the work environment to minimize job-related stress. For copies of this brochure, contact Charles Abemethy, DTN 223-5641, @MLO.
Digital employees with questions regarding their work environment should contact their local Environmental Health and Safety (EHS) department or Health Services for assistance.
The role of mid-range computers is changing dramatically as we move into the 1990s. For years minicomputers have been and will continue to be the primary vehicle for delivering distributed/decentralized, timesharing applications.
Today, evolutions in technology and revolutions in the industry are stratifying the delivery of applications into two primary computing areas - "the desktop" and "beyond the desktop." Corporate Information Systems are being designed for peer networks. In other words, we’re looking at "no more tiers." The trend is toward viewing the network as the system.
In this environment, the role of mid-range computers will evolve toward managing and implementing the networks that tie together corporate resources. Clearly, minicomputers will assume a dual server role — server to the desktop and server to the data center. Some projections indicate that by 1994, 60% of all mid-range MIPS will be consumed as server functions. We envision that virtually all minicomputers will become servers (although not all servers will be minis).
The Mid-Range Systems Business (MSB) Group plans to be at the forefront of this evolution. Because of our excellence in distributed networks and desktop integration. Digital is very well positioned to be a market leader in networked servers. Our vision for the 1990s is to become the world’s leading vendor of "Networked Servers" and system resources for distributed, multivendor system networks. Our strategy is to launch a cross-corporate marketing campaign to demonstrate Digital’s existing leadership capabilities in the marketplace. From an Engineering standpoint, we will provide both the platforms and the focus for other engineering efforts to increase Digital’s superior position.
Refocusing our business toward this goal, within Digital’s overall NAS strategy, will drive MSB’s future growth. We have already established a new marketing group within MSB—Networked Servers Marketing, with Lynn Berg as manager, reporting to Ken Swanton [title]. In her new role, Lynn is responsible for an extensive marketing campaign that positions Digital at the leading edge of networked servers and systems technology. She is the marketing focal point for developing and marketing a family of Networked Servers-in- cluding hardware, software and NAS support for special environments, and a set of network services for systems and support integration. To accomplish this goal, Lynn will work with MSB engineering to garner expertise from Product Marketing Groups, other engineering groups, and services, to build the world's best networked servers.
MSB's new focus on client/server computing, combined with our traditional strengths in distributed timesharing systems, demonstrates our continuing commitment to provide Digital’s customers with the best computing solutions for their changing needs.
(On February 2, President Bush traveled to North Carolina State University to learn about university research projects and how corporations are cooperating in such activities to improve industrial competitiveness. During the visit, Jack McCredie was invited to participate in a panel discussion that also included representatives from DuPont, Harris, IBM, and the Semiconductor Research Corporation. Each participant had just three minutes to describe his or her organization, discuss issues of research and competitiveness, and make recommendations. The following article is based on Jack’s remarks.)
University, industry, and government cooperative research plays a key role in keeping the U.S. in a winning position in the global economy.
Digital is the second largest manufacturer of computing systems in the world. To sustain technological leadership, we must have access to scientific advances in all areas important to future products, no matter where they happen or who makes the invention. To sustain leadership in highly competitive world trade, we need access to newly emerging markets such as those in Eastern Europe.
Innovation carries no passport, respects no boundaries, and follows no timetable. An effective research and development program has to be universal. It has to build on new ideas regardless of where they originate. Openness is key to Digital’s research and development program. Our goal is to gather the broadest possible range of inputs from within the corporation, from the academic community, from industrial research consortia, and from customers and suppliers.
Last year we invested $1.5 billion (about 12% of revenues) in product development and research projects. Because of the highly competitive nature of the computer business, most of these funds go directly to product development. That is why partnerships with research universities such as North Carolina State are so important to us.
To provide Digital with the longer-term applied research that we need to be competitive in the future, we have three Digital research labs in the United States and one in Europe. We participate in industrial research consortia such as MCC and Sematech in Texas. And to give us broad access to research in many directions, we depend heavily on research partnerships with universities.
Our External Research Program has more than 300 active projects at more than 120 universities. The National Science Foundation is also a major sponsor of many programs we support, such as the Advanced Electronic Materials Processing Center here at North Carolina State. Other examples of strategic projects in North Carolina that are important to us include the Semiconductor Research Corporation, the Microelectronics Center of North Carolina, and several individual projects at universities such as Duke and the University of North Carolina.
There are four important ways in which the federal government can help these partnerships and the competitiveness of United States firms in high technology:
o Support programs that benefit university research — for example, the recently submitted Federal budget continues toward the goal of doubling the budget of the National Science Foundation by 1993,
o Make the provisions of the Research and Development Tax Credit permanent, o Help U.S. firms open new high-technology markets throughout the world,
o Develop programs that will provide a good basic education to all citizens.
The cooperative university research model is elegant, extensible, economic, and effective. Major winning applications and products for the mid 1990s are running as prototypes in university laboratories today. New breakthroughs for the beginning of the 21st century are just being invented on university campuses today.
The process is a win-win situation for all participants. Better education, better research, and better products are the direct results of university, industry, and government research collaborations.
A product marketing group has been formed to focus on providing software applications for sales and distribution systems and for the retail industry — a growing market currently estimated at $40 billion. The group is managed by Eli Lipcon, vice president. Sales and Distribution Systems, who reports to Peter Smith, vice president, Product Marketing.
The applications will be from Digital and third-party software suppliers in the Cooperative Marketing Program. In addition, the group will market and sell Digital’s VAX and RISC computers; networking solutions; peripherals; and planning, design, implementation and management services to sales and distribution functions in companies across all industries.
According to Eli, "The use of information technology in sales and distribution departments and the retail industry has been focused largely on basic office applications such as word processing and electronic mail, and applications such as order processing, sales transaction management, purchasing, and invoicing. But worldwide competitive pressures are rapidly changing this picture. Companies are now looking for other ways to help their sales and distribution organizations become more strategic partners in their dealings with customers. They are positioning sales offices, warehouses, and stores across wide geographies in order to serve their customers better.
"Digital’s solutions for sales and distribution functions and the retail industry are built on strengths in distributed computing across global networks of systems from various vendors."
Digital now provides volume credit to all accounts with Digital Business Agreements regardless of the channel providing the hardware. This new approach, known as "dual aggregation," has two objectives:
o to ensure that our end-user customers can make the best possible purchasing decisions when looking at a total hardware and software solution, regardless of the channel selected; and
o to recognize the role our Complementary Solutions Organizations (CSOs) play in providing total solutions to our customers.
In this way we can better support the business goals of both our resellers and customers.
This channels strategy allows maximum account coverage and penetration with minimal channel conflict. It also ensures that end-user customers see Digital and its CSOs as having the most competitive and comprehensive solutions portfolio in the industry.
Our approach is aggressive and comprehensive. While some vendors don't offer credit for such sales activity, those that do, award credit for only a portion of their product set.
In addition, we recently revised our S.T.A.R. (Sales Through Accredited Resellers) Credit Policy, which also creates new sales opportunities for authorized Digital resellers. This policy change awards full credit to end-user sales reps for systems sold by OEMs (Original Equipment Manufacturers) into their accounts. Both these changes help neutralize sales issues that could affect the customer’s purchasing decision.
For FY91, beginning with the budgeting process, Digital worldwide will change its management measurement for employee population — the way it counts people — to "headcount equivalency." An individual will be counted for the number of hours scheduled to work, expressed as a percentage of the standard work period. For example, a Digital employee who is scheduled to work 20 hours of a standard 40-hour work week will be counted as .50. Current reporting systems will be enhanced to report numbers of employees in total (gross) and by "equivalency."
The program, which gives managers greater flexibility in meeting their needs for people, has been approved by the Finance Committee and the Personnel Management Committee. For more information, contactCris Day, SSM1 Finance, DTN276-8294; Ragi Mehta, SRCOF Finance, DTN 244-6160; or Mhairi Paget, MEM Finance, DTN 223-5663.
"Workers are changing, so that means work models must change as well." explains Laurie Marolies, manager, Corporate Employee Relations Programs. "When employees aren't worried about their life outside of work, they can perform at their best, and the company can as well. So social trends are forcing businesses to make work more flexible."
To help meet this business challenge, Digital has developed a "Life Balance Strategy" to meet the company’s worldwide business objectives and employees' personal needs through more flexible planning and use of human resources. Life Balance is the foundation for the Dependent Care Strategy (covering child care, elder care, and care for ill dependents) and the Alternative Work Strategy (encompassing work schedules, work locations, and work models).
"With an increasingly competitive labor market, we have to attract and retain top people. This includes people who choose to work less than the standard number of hours a week," notes Laurie. "Many men are becoming increasingly involved in parenting and taking care of elderly parents. Also, the number of single-parent households, women in the work force and women over 30 giving birth to their first child are on the rise.
"We have to be able to accommodate capable professionals who choose to work less than a standard work week. The old work model of ’everyone works in the office from 8:15 till 5 and has a 45-minute lunch break’ that is common in some parts of the world is not meeting the needs of individuals nor of businesses. The Alternative Work Strategy has been devised to increase our ability to offer flexible work options around the world."
Flexible staffing means more than retaining valuable employees who wish to work part-time. As people retire, for example, they may choose to phase out gradually from a full 40-hour work week. Also, if a manager has a reduced workload and needs to reduce headcount and spending, some of the remaining work could potentially be divided into part-time jobs. This could provide opportunities for more employees, some with shorter schedules, rather than fewer employees who all have full-time schedules. In many cases, new and existing tools and procedures make it possible for managers to provide employees with the flexibility they need and at the same time meet pressing business needs. What’s needed is a change in perspective to see the full range of opportunities and options. For instance, a new approach to counting the employee population known as ‘headcount equivalency,' gives managers more flexibility in their staffing, because, for headcount purposes, one employee no longer necessarily equals one ‘head.’ For example, in the U.S. an employee who works 40 hours of a standard 40-hour work week counts as 1.0; while one who works 30 hours of that same standard week counts as .75. This tool has already been successfully phased in in the Central Area and Customer Services Logistics in Andover, Mass. It will be required company-wide beginning July 1. This change in population reporting increases a manager’s options. In other words, work hours can be organized in a way that best gets the job done and meets a group’s needs. "Headcount equivalency also more accurately reflects what our human resources are and what we spend on them," adds Laurie.
According to Richard Rogers, project leader for the Central Area pilot, headcount equivalency helped address a number of common business problems. "For example, in one of our organizations, customers were looking for support people, but only on a part-time basis. With the old system, we would either have had to turn down the work or hire a full-time employee who was not needed. Through headcount equivalency, we are able to hire the right resources for the job that has to be done."
The need for affordable, available, quality day care is also worldwide, notes Erica Fox, Child Care Program manager. "There are multiple solutions to employees’ child care problems. The solution that may be right for one location may not be right at all for another. The key is to ensure that local responses are driven by both business needs and employee child care needs.
"Digital Guidelines for Child Care Initiatives" is the basis from which the company can expand its response to child care problems. Organizations across the company can collaborate with the Child Care Program Office to determine which response makes sense, given their specific business needs, the employees’ child care needs and the local community picture regarding child care.
"Local organizations might fund five emergency ‘places’ at a local day care center that parents could use when their own care provider is sick or their center is closed. Or they may decide to support a child care center start-up." Erica adds. "The point is. groups can choose to fund the option that solves their particular child care problem."
In the U.S., the company has already taken steps to support employees’ child care needs, including the Child Care Resource and Referral Program and the Dependent Care Reimbursement Account. In addition, Digital has supported the start-up of a near-site child care facility in Reading, England, and participates in a child care tuition subsidy program in the Netherlands. (The company doesn't provide such tuition subsidies outside of the Netherlands at present. Any decision to do so would be made on a country-by-country basis.)
"Regardless of where they live or the life choices they make, employees are seeking to balance their life at work with their life outside of work," concludes Laurie. "The Life Balance Strategy, the Alternative Work Strategy, and the Digital Guidelines for Child Care Initiatives are major steps toward fulfilling our needs. We’re working on additional initiatives as well. It makes good business sense for the 1990s and beyond."
Digital is offering a small number of employees in the U.S. the opportunity to change careers and go into teaching. The MEM pilot program, "Engineers into Education." will provide some employees who are re-evaluating their career directions with an additional option. At the same time, it will help some communities deal with the growing shortage of qualified mathematics, chemistry, physics and computer science teachers.
The program is primarily intended for those individuals, who in mid-career feel motivated to give their time and effort to the community through teaching; and who, with financial and other support to help them through a period of change, could manage with the lower levels of income common to the teaching profession.
Support available from Digital (the "Education Bridge Package") includes counseling, the opportunity to maintain certain benefits coverage for a fixed period of time, a lump-sum financial package based on the number of years worked for Digital and help with tuition for teacher preparation and certification courses.
In April, the first phase of the program, "Explore Education," will help eligible employees decide if a career as a math or science teacher is appropriate for them. This phase will be conducted by a local education consortium of public schools over a ten-week period. The first two weeks will be held in a local school district. Employees can participate in this part of the program without obligation.
During the ten weeks of Explore Education, those who decide they actually wish to leave Digital for a career in teaching may do so by electing the second phase of the program, the Education Bridge Package.
March 9, 1990 was the deadline for applying for the pilot program. Applicants must meet the following eligibility criteria: o apply and submit all necessary materials;
o have at least a bachelor’s degree in engineering, mathematics, physics, chemistry or computer science from an accredited college or university;
o work in MEM (Manufacturing, Engineering and Marketing);
o work in Massachusetts or New Hampshire; and
o have a 1, 2 or 3 rating in their last performance review.
Following completion of the pilot, the program will be extended to other organizations and geographies within the company.
Whenever there are more eligible applicants than opportunities, applicants will be selected in the following order:
o first, those who have been designated as "available" under a formal transition program; o then, those with the most company seniority, defined by total length of service with Digital.
Additional information is available on videotex (to access, type VTX EEP at the system prompt), or contact Burt Goodrich, DTN 223-3603, VAXMAIL RDVAX::EDUCATION.
In recognition of the growing importance of GIA sales opportunities, five Program Managers have been named.
Located in Acton, Mass., as part of the Major Accounts organization, they will serve the Far East Region (FER), the South Pacific Region (SPR), Japan, India, Canada, and Latin America/Caribbean (LA/CR). Heading the program offices are Steve To (FER), Axel Dougan (SPR), Norio Murakami (Japan), Nari Bawa (India), and Ray Lindsay (Canada and Latin America/Caribbean).
The program office managers are senior-level sales professionals who serve as advocates for their regions. Their job is to make sure we close business. "These program office managers understand, from their own experience, what the sales processes and problems are in their regions — and how best to optimize sales activities," explains John.
Each program office manager functions as the host account manager for regional customers visiting Digital and performs a leadership role in regional Large Account sales activities. As inside salespeople, the managers serve as consultants and advocates for their regions, identifying strategic requirements, acting as a conduit for business information between the regiona! and area staffs, and acting as liaisons to various interna! groups, such as International Account Marketing Program, Large Projects and GIA Channels. Simply by having adjacent offices, these managers can easily discuss issues spanning several countries, languages and time zones and relay approaches and contact names back to the field.
To further prepare and strengthen the Video Image and Printer Systems (VIPS) Group's position in the marketplace in the 1990s, Larry Cabrinety, group manager, has announced the following organizational changes:
George Wright has assumed the newly-created position of program manager, OEM Program Office. In this role, George will develop the OEM business for printers and video products. He has overall responsibility for all facets of that business, including development of a customer base, product management, engineering support, marketing support, manufacturing, and post sales support.
Rich Lewan has joined VIPS as the new program manager of the Video Program Office. Rich has 15 years’ experience with Digital in a diversity of roles, Including marketing management, product management and sales management. Most recently. Rich was manager of Product Marketing Development and Support in the Engineering Systems Group (ESG). He has also held management positions in Digital’s Microprocessor Product Group. Corporate Engineering TOEM (Technical Original Equipment Manufacturing) Group and ESG’s Workstation Marketing.
David Sweeney has assumed the newly-created position of program manager, Hardcopy I/O Program Office. He will manage all facets of the Hardcopy I/O business, including Hardcopy I/O Engineering, Software and Aftermarket Product Management. Desktop Printer/Scanner Product Management, and PrintServer/Production Printer Product Management. This business is expected to double in the next three years.
Joseph Cannizzaro has joined VIPS in the newly-created role of program manager. Strategic Ventures/Alliances Program Office. Joe will expand VIPS’s NOR (Net Operating Revenue) and PBT (Profit Before Tax) businesses by identifying and creating Strategic Ventures and Alliances. He will manage expansion into South America and Eastern Europe, and will develop North American alliances to strengthen manufacturing and engineering capabilities in critical technologies. He has been with Digital more than 15 years, most recently as group manager of Technology and Process in Low End Systems Engineering. Prior roles include group Engineering manager for the Printed Wiring Board (PWB) Business, Project and Manufacturing manager for the design, build and startup of the Greenville PWB facility, and Engineering manager for PWB.
Peter Conklin has assumed the newly-created position of VIPS technical director. He will be responsible for VIPS technical integration and for support of products and technical direction of other Digital systems and software groups. In addition, he will be the liaison for VIPS ISV (Independent Software Vendors) application support in marketing- and engineering-sponsored programs.
Don Hunt has been appointed EIS (Enterprise Integration Services) Manufacturing manager, reporting to both Russ Gullotti, vice president of EIS, and Bill Hanson, vice president, Manufacturing Operations. In this role, Don will be a member of both the Enterprise Integration Services Management Committee and the Manufacturing Forum. His responsibilities will include the functional management of CSS (Computer Special Systems) and SWS (Software Services) Manufacturing.
As the EIS Manufacturing manager, Don will be responsible for the development and integration of the Manufacturing strategies in support of the EIS business strategies. In addition, Don will continue in his Corporate Manufacturing role as functional manager of the Customer Integration group and the Manufacturing Transition Management group. Bill Hanson will assume responsibility for the Demand/Supply group.
Don’s 20 years in Manufacturing at Digital have included the following positions: New Products Manager; Manufacturing Business Manager/Product Lines; Corporate Purchasing Manager; and Group Manufacturing Manager of General Manufacturing. PWB (Printed Wiring Board), Northeast Area Manufacturing and Strategic Planning.
Steve Bergeron, manager of Digital’s Semiconductor University, has been chosen to serve as a member of the Board of Examiners for the Malcolm Baldrige National Quality Award.
The Malcolm Baldrige National Quality Award is part of a national quality improvement campaign by industry and government to recognize excellence and promote greater awareness of quality. The Board of Examiners evaluates applications submitted by U.S. companies for the prestigious award. Its activities include making site visits and evaluating submitted material to determine which companies excel in modem quality management.
Steve joined Digital in 1984 to implement statistically based problem solving techniques in Semiconductor Operations Manufacturing. In January 1989, he took on the task of starting up and managing Semiconductor University, a corporately funded program that provides a two-year state-of-the-art work/study program for individual contributors seeking career change opportunities in the Semiconductor and Interconnect Technology (SCIT) organization
Rich Nortz, Customer Services vice president, recently announced the following enhancements to the U.S. Customer Services organization:
Customer Services is transitioning the Southwest Area and Western Area into the Western States Region, and the Central Area and East Central Area into the North Central States Region. These Regions now report to Bob Brooks and Mike Jackson, respectively.
Frank Branca has been named Northeast Region manager; and Tony Farkas has been named New York Region manager.
Larry Pape has been named manager of the newly-formed Service Delivery Operations group. This organization will consist of the Service Delivery group, which includes the Customer Support Centers, the Logistics group, and the Service Delivery Training interface. Dick Sellers manages the Service Delivery group and Charlie Tharp remains as Service Delivery Training manager.
Don Leighton has been named manager of the newly-created Digital Product Services group, made up of Hardware Product Services (HPS) and Software Product Sendees (SPS). Don also manages the Account Support organization and the marketing support for HPS, SPS and Industry Marketing.
John Fischer has been named manager of the New Business Services group, consisting of Digital Customized Support Sendees (DCSS), Network Site Services (NWSS), and Value Added Network Services (VANS). John is also responsible for managing the marketing support for this group.
George Newton has been named manager of the New Vendor Product Services group, consisting of the Vendor Equipment Sendees (VES), Vendor Application Services (VAS), Digital Assisted Services (DAS), and Desktop Sendees groups.
Lynn Berg has accepted the position of manager for the newly created Networked Servers Marketing group, reporting to Ken Swanton, Marketing manager for the Mid-Range Systems Business Group. In this role, she is responsible for an extensive marketing campaign that positions Digital at the forefront of networked servers and systems technology. Lynn began her career with Digital in 1977 in Sales, and has held a number of positions in Sales management and Marketing management. Recently Lynn chaired the Marketing Advisory Board in the Product Marketing Strategic Programs Group.
Cy Gaydos has been named U.S. Customer Services Account Support manager, reporting to Don Leighton, vice president, Digital Product Services. In his new position, Cy will be responsible for the marketing, account support and corporate account activities for U.S. Customer Services. Since joining Digital in 1971, Cy has held numerous positions in Sales, including Sales representative. Sales Unit manager, Subsidiary Sales manager. National Account manager, National Account Group manager. Corporate Account Cluster manager and Industry Sales manager.
Dennis O'Connor has been appointed director of the Corporate Artificial Intelligence Technology Center, reporting to Dan Infante, vice president, Corporate Information, Management & Technology. In this role, Dennis will be responsible for the development, integration and transfer of AI technology and applications worldwide. He will continue to manage the STEPS (Systems and Tools to Enhance the Productivity of Selling) Program. During his 28 years with Digital, Dennis has been Engineering Systems Design manager. Worldwide Systems Technology manager, Intelligent Systems Technology manager and most recently Corporate Manufacturing Technology manager.
Bob Roller has assumed management responsibility for the MCG (Media Communications Croup) Design and Development function. He reports to Don Elias, MCG Group Manager, and replaces Susan Moloney, who now manages ESD&P/MCGin the UK. With Digital for 15 years, Bob’s most recent post was Group Communications Manager for Professional Services, where he led cross-services communications activities.
Willow Shire has been appointed Group Marketing manager for the Laboratory Data Products (LDP) Marketing Group, reporting to Peter Smith, vice president, Product and Industry Marketing. Willow joined Digital in 1976 as part of the start-up team for the Semiconductor organization. She worked with both Manufacturing and Engineering before joining the Marketing organization in 1983. Most recently, Willow worked on the start-up of the Corporate Operations Committee. During this assignment, she worked closely with the senior operating managers to build a cross-organizational committee focused on leading the company.
Dave Weil has been named Business Planning Manager reporting to John Caulfield, Corporate Manager, Waste Management. Dave will be responsible for establishing business plans for waste minimization, for developing strategic business programs, and for systems that will drive waste disposal strategies. Working with project managers throughout the world, he will assist in establishing ways to reduce waste at its source, to improve reuse and recycling of material, and to establish more effective disposition of scrap. Dave joined Digital in 1980 as a Group Material manager in Manufacturing. In 1984, joining Customer Services Logistics, he was manager of the Low End Logistics Business Unit, and manager of Strategic Planning.
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