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Now Sudipta Says It's Back to the Knitting...
By Andrew Bond, Industrial Automation Insider
Invensys Operations Management (IOM) CEO Sudipta Bhattacharya took the highly unusual step on the last day of June of announcing what appears to be a radical change in strategy for the new entity created by the fusion of Invensys Process Solutions (IPS), Eurotherm and Wonderware, by briefing leading U.S. automation and control editors Walt Boyes and Gary Mintchell who immediately relayed the message to the wider world through the medium of their respective Sound Off! and Feed Forward blogs.
Bhattacharya drew a thick black line under the two-year tenure of his predecessor, Paulett Eberhart, who departed abruptly in January of this year, telling Boyes and Mintchell that, far from IOM being set to become a pure software play, he sees its core competency as being in control and safety products and solutions, and targets these areas as the recipients of the bulk of its future R&D investment.
That suggests that he's persuaded Invensys CEO Ulf Henriksson that the software and services based strategy developed by Eberhart and enthusiastically endorsed by Henriksson in successive analyst briefings was in fact leading IPS up a blind ally. Instead, perhaps drawing on his own process industry experience and on his time with SAP, who after all knows a thing or two about software, he appears to have accepted the argument that a process automation derived software and services business can only thrive on the firm foundation of a state of the art control and safety hardware business.
To get a measure of the magnitude of this reversal of strategy, it's worth recalling that only last May, Henriksson was telling analysts at the briefing following the announcement of the group's 2008 results that IPS' competitors had experienced a decline in orders in part because of their over-reliance on selling. Little more than a month later Bhattacharya was telling Boyes that products, or what he termed "plumbing," are essential to the broader vision of targeting what he identifies as the "Operations Management space" between conventional MES and ERP with "hardware-agnostic" software solutions, for which read InFusion and ArchestrA, and citing in his own support no less an authority than Cisco.
Ironically the vision that Bhattacharya describes of a family of products and solutions which can be configured "to integrate information across the entire enterprise from the plant-floor devices all the way to the ERP system," as Boyes put it, is almost word for word the justification Allen Yurko gave for the succession of acquisitions which brought together the individual elements of IOM in the first place. Bhattacharya didn't actually use the phrase "shop floor to top floor" –or at least if he did, Mintchell and Boyes were kind enough not to repeat it―but you can see where he's coming from. At least he's unlikely to go out and buy another Baan, but then, given what seem to be increasingly close relations with SAP, he's hardly likely to need to.
Inevitably, given the twists and turns of the Invensys saga over the past decade, it would be surprising if this latest reformulation of IPS/IMO strategy didn't meet with a degree of skepticism both within and without the organization. Certainly it would be legitimate, even at the risk, not for the first time, of incurring the wrath of the IPS/IOM marketing communications operation, to at least speculate as to whether the exodus of talent under the previous regime had not fatally undermined that core competency in control and safety―perhaps others will be persuaded to emulate Peter Martin and return if not to the Foxboro, then perhaps to the Plano fold.
Similarly many will be asking themselves, given the fundamental differences between the approach and philosophy of the former IPS's customers and those of Wonderware and Eurotherm, whether Bhattacharya's concept of "one product group, one common development, one single roadmap," is ultimately attainable or workable. Make up your own mind after reading Boyes at http://community.controlglobal.com/soundoff and Mintchell at http://radio.weblogs.com/0133292/
Also imparted to Mintchell but apparently too hot for distribution on this side of the water, is the make-up of the senior executive team at IOM. Heading up the four regions are Steve Blair - North America, Ricardo Agostinelli - Latin America, Nabil Kassem - Asia Pacific and Middle East and Stuart Batchelor - Europe, Russia and Africa. Blair, a former sales and marketing director for IPS in the U.K., has been president of IPS North America since August 2007; Agostinelli has been with Foxboro Argentina since 1979 and managing director since 1990; Kassem joined IPS in 2005 as the vice president and managing director for the Middle East; and Batchelor is ex-Rockwell, but joined IPS in 2007 after a couple of years as U.K. business development manager for Jacobs Engineering.
Other key appointments include Rashesh Mody, who has headed up the Wonderware business since February of this year and now becomes vice president for product and portfolio management and strategy, and Pankaj Mody, the former head of the combined IPS-Wonderware development group who becomes vice president of R&D.
...but AMR sees IOM as a 'C-level trusted advisor'
The creation of Invensys Operations Management (IOM) received qualified approval from Boston-based research and advisory group AMR Research in a document entitled "Can the new Invensys organization tackle the age-old problem?" and published shortly after Invensys released its 2008 results.
While acknowledging that Eurotherm adds to IPS' product portfolio, authors Simon Jacobson and Bill Polk identify the ultimate objective as facilitating "business value creation at the executive level through a trusted-advisor capacity." The key to success, they suggest, lies in "expanding past the company's core business of selling hardware and software to establishing more consultative, trusted advisor engagements . . . and encapsulating more complete business transformations." That, they say, "means overcoming the age-old automation provider dilemma: claiming enterprise mindshare."
Manufacturing software vendors such as IOM's Wonderware have long been trying to reach out from the operations level of MES and SCADA and engage with their clients at the IT level, not least because that's where the serious money is buried. And as process automation hardware becomes ever more commoditized, the same is true of DCS vendors as they develop extended capabilities such as asset management. However, AMR puts that ambition in perspective. According to its own recent data on manufacturing spending, only 7% of U.S. manufacturers see their automation and controls provider as having a heavy influence on their manufacturing decisions, while 46% acknowledge their enterprise provider as having greater influence than their automation provider on manufacturing IT decisions.
Although the authors think that it's too early to tell whether IOM will seek to link up with consulting firms such as McKinsey, it's clear that they believe they'll need to. Citing the success of IBM's Global Business Services (GBS) group based on its Maximo platform, it suggests that the way forward lies in combining what it calls "C-level consulting" with end–to-end software solutions.
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