It’s been a bit more than a month since Invensys CEO Ulf Henriksson announced to staff ― it’s never been formally announced publicly, let alone explained ― the departure of Paulett Eberhart and his own assumption of her role as acting president and CEO of Invensys Process Systems (IPS). As Harold Wilson might have said, four weeks is a long time in the process automation industry, and in that time, Henriksson seems to have decided that the problem is not just one of personnel — or indeed, and perhaps more to the point, of personalities — but of organization. Consequently, and despite the fact that IPS is only now emerging from the effects first, of Eberhart’s transfer of the IPS HQ to Texas and second, of the largely successful attempts to integrate the constituent businesses — Foxboro, Triconex, SimSci-Esscor and Avantis — into a single coherent whole, it appears that he now intends a further reorganization.
Under the banner of what is called “The IA Transformation Project” — IA in this case for Industrial Automation and, therefore, one assumes, not be confused with the DCS of the same name — what appears to be planned is the integration of IPS, Eurotherm and Wonderware into a single entity. In Henriksson speak, “The IA project will define the synergistic value and options for integrating capabilities within our three Industrial Automation (IA) businesses (IPS, Eurotherm and Wonderware) and build an action plan to unlock the potential that synergies can offer to both Invensys and our customers.”
Heading up the project is Jeff Greene, who relinquishes his role as president of Eurotherm to become senior vice president — IA Integration, while Eurotherm CFO Chris Bates is left to hold the fort on an interim basis. This, we understand, was announced to the respective workforces in the last week of January although there was no public announcement, the IPS press and public relations machine having seemingly taken a vow of silence on this, and indeed pretty much every other, issue. Happily the rest of us have been able to rely on the Jim Pinto information service to which Invensys employees seem to be happy to contribute.
Hardly had Greene had time to shake the dust of Worthing from his sandals than, in the first week of February, Henriksson issued another message to the troops which seemed largely to pre-empt the outcome of the project and establish, through a series of “interim” appointments what looks like an entirely new structure for the combined businesses. In the most significant of these, Wonderware president Sudipta Bhattacharya becomes interim chief operating officer, with responsibility for managing the day-to-day operations of what are now being referred to as the IA business groups.
Bhattacharya has only been with Wonderware just over eighteen months, having joined from SAP in August 2007 when his title was originally Invensys chief software solutions officer. By November 2007, however, he had been appointed president of Wonderware following the sudden departure of Mike Bradley. Perhaps sensitive to the criticism that Eberhart had had no experience or knowledge of the process automation business, Henriksson went to some lengths to stress that Bhattacharya was much more than just a software guru and had genuine domain expertise ― bachelor's and dual master's degrees in chemical engineering with specializations in chemical plant design, fabrication and membrane sciences — and eight years working as a chemical engineer gaining experience of managing production shifts, plant design, simulation tools and even DCSs.
Also suggesting that a new entity is in the process of being established is a series of interim appointees, each of whom is to have responsibility across the three IA business groups. Prominent among them are Phil Clark, who becomes senior vice president of sales and marketing, and Pankaj Mody, since November 2007 head of software development and CTO of both Wonderware and IPS, who becomes vice president of development and technology. Other key figures, such as Rashesh Mody, who takes over responsibility for Wonderware, and Steve Blair, IPS president for North America, will now report to Bhattacharya, as will Stuart Batchelor who was earlier appointed interim leader of IPS’ EURA region. That now includes Europe, Russia and Africa, but excludes Libya and Egypt, responsibility for which has been transferred to a newly merged APAC and Middle East region to be led by Nabil Kassem. Meanwhile another rising star, Serena Lang, recently recruited from BP as the primary liaison with her former employer, becomes North West Europe general manager.
Much of this looks entirely sensible and will simply prompt many commentators to ask, first, why it wasn’t done years ago and, second, why IPS had to go through the Eberhart interlude before it could be implemented. INSIDER has frequently commented on the anomalous position of Wonderware, half in and half out of IPS, while the explanations of why Eurotherm should lead an existence separate from IPS have always been less than convincing. Finally, integrating them both fully into an Invensys Industrial Automation would not only put an end to suggestions that either is still a long- or short-term disposal option, but also would finally complete the process started when Allen Yurko embarked on that wild flurry of deals in the spring of 1998.
IA doesn’t mean IA
Those who had doubts about the Henriksson-Eberhart strategy for IPS should not, however, let the IA label delude them into thinking that the emphasis is going to shift back towards the traditional process automation business. Henriksson’s brief to Greene’s cross-functional IA integration team is to focus on “defining the new market space between the automation and ERP layer — and then developing the strategy that will make us the leader in that space by fully capitalizing on the strength of the people, technology and industry expertise resident in our three IA businesses.” Nearly three years after the launch of InFusion, that may seem a little late in the day, particularly given Emerson’s newly found interest in the same space.
The latest changes at IPS came close on the heels of Invensys’ latest “Interim Management Statement,” which since the group abandoned its plan to list in New York and, thus, report only half yearly, substitutes for what would otherwise be the third- quarter results. Most of the information provided was qualitative rather than quantitative, with IPS coming in for special mention for “good order intake despite some delays in order placement.”
Unlike the U.S.-based vendors, the exchange rate works in Invensys’ favour, so the company expects its performance in the second half to be “broadly in line with that achieved in the first half.” Less encouraging is the admission that, while IPS revenue in the third quarter rose, again as a result of currency translation, in constant exchange rate terms, it was negatively affected by customer-led delays in project implementation and reduced volumes, as well as pricing pressure on product sales. Operating profit was also down due to the lower volume of product sales.
On the other hand, the order book has strengthened over the same period, most notably with a $250-million order from China involving the development and implementation of four large-scale control rooms, including simulation, critical control and safety systems, for two new nuclear power plant sites in China.
IPS’ markets, especially those in oil, gas and power, are expected “to remain generally stable,” but further delays in both project and product orders and consequent reductions in revenue are expected in the short term as customers react to poor economic conditions
Intriguingly, despite the focus on IPS in the statement, there was no mention or explanation of the departure of Paulett Eberhart just a few days earlier, but simply a reference to “a leadership change” at IPS and to Ulf Henriksson’s temporary assumption of the role of IPS CEO pending a new appointment.