“Don’t mention the products” says Invensys Process Systems as it promotes its integrated solutions strategy

Jan. 23, 2009
IPS has been playing catch-up in trying to explain the strategic changes that it is intended to embody

Ever since the, we understand premature, release of that new Invensys Process Systems (IPS) branding on its various Web sites back in June, suggesting at first glance that it had either become a subsidiary of a mobile phone company or gone into the golf ball business, IPS has been playing catch-up in trying to explain the strategic changes that it is intended to embody.

The latest stage in that process is the “Media Tour” currently wending its way through the EMEA region and bringing to its benighted media folk the message already delivered to their more enlightened North American colleagues at the IPS North American Client Conference in Dallas in September. First stop on this pilgrimage was London where, despite the simultaneous presence in the UK of IPS president and CEO Paulett Eberhart, the task of explaining the new IPS fell to North West Europe & Africa managing director and general manager Stuart Batchelor.


He’s only been with IPS since September 2007, after a two year stint with Jacobs Engineering, following eight years with Rockwell Automation, so he carries no Invensys baggage with him. Just as well since, in essence, his message was that the IPS of today bears no resemblance, not just to the IPS of Leo Quinn or Mike Caliel, both of whom have been written out of the history books with Stalinist ruthlessness, but even of 12 months ago when, it had been our understanding based on Ulf Henriksson’s regular analyst briefings, IPS had been doing rather well.

“What a transformation,” said Batchelor, pointing to Invensys’ $400m in cash and its $800m credit facility, its restoration to the FTSE 100 and its recent first half results. Never mind that those results included a 17% fall in IPS’ operating profit and a reduction in margin from 12.1 to 9.6%; just keep your eyes fixed on the 10% increase in orders and the 138% improvement in operating cash flow.

That fall in operating profit had already been attributed to exceptional investment in R&D and sales and marketing, so it was Batchelor’s task to explain where it had gone. “In the past year,” he said, “we’ve moved from being four or five different companies to a truly integrated solutions firm.”

In September 2007 IPS had been a company of silos, with multiple delivery organizations, a product-based approach, multiple sales, teams, islands of industry and business expertise, an internally focused leadership team and a set of discrete product brands without a planned company brand or image. By September 2008, he claimed, it had become an integrated solutions company, with a single global delivery organization and a broad portfolio of products, services and solutions, a single sales and client executive team, seamless engineering, industrial solutions and consulting capabilities, a client-focused executive leadership team and an integrated family of IPS brands reflecting the new, integrated IPS. As a result, he claimed, “Clients are now able to easily access the full range of our capabilities to benefit their business.”

Integrated sales force

What that appears to mean in practice is that there are no longer separate sales forces for, for example, Foxboro, Triconex, SimSci or Avantis, but a single integrated sales force capable of presenting the entire portfolio as a coherent whole. Moreover, where there are specialists, they will specialize in particular clients rather than in particular products or services, thereby engaging the client at a higher level and discussing objectives rather than specific products or technologies. Thus, for example, CTO Hartmut Wallraf becomes the primary point of contact for all business with BASF and Bayer.

Justifying the changes, Batchelor argued that in a world in which business variables such as energy and raw material costs are fluctuating wildly and continuously, IPS’ customers are looking for partners who can perform in real time. “IPS needed to change and produce a revolution in performance,” he said and claimed that that was what had been achieved in the past year.

Long overdue?

None of which could be described as particularly contentious; indeed much of it, it could be argued, is long overdue. If the assembly of the constituent parts which make up IPS had any logic in the first place, it must have lain in the potential synergy between them. Arguably what prevented that synergy being realized were Invensys’ parlous financial position and the ever present possibility that it might be necessary to jettison one of the components in order to keep the rest of the ship afloat. The fact that closer integration to the point where it would be difficult, if not impossible, to sell off, for example, Triconex—the so-called jewel in the crown—is a measure of how far the group’s overall financial position has improved.

Once that point had been reached, the idea of separate sales people from Foxboro, Triconex and SimSci keeping the client’s revolving door continually spinning is clearly ridiculous, though no doubt the Wonderware and Eurotherm reps will do their best to fill the gap. Equally, in dedicating key senior individuals to developing partnerships with key clients, IPS is, again perhaps belatedly, only adopting what has become standard industry practice. And if such a strategy is to work and work fast, it’s also clear that the legacy of individual company loyalties needs to be treated with scant respect. Hence, the logic of the move to Plano and the establishment of a non-process automation industry indoctrinated leadership team to overcome what has perhaps been perceived as the dead weight of Foxboro the brand, Foxboro the company, Foxboro the place and Foxboro the philosophy.

The danger in all this is, of course, that several babies may be ejected with the bath water. It would have been possible to—indeed, one suspects, that some of those present did—sit through Batchelor’s entire presentation without realizing that IPS is still the world’s third, fourth or fifth largest (depending on who’s counting) DCS vendor, and that for all the wonders of InFusion, which was the only “product” to get a mention, it’s the DCS that provides IPS with much of its bread and butter. For that reason, it is perhaps instructive to compare the IPS approach with that of Honeywell, which also sees an increasing proportion of its future revenues coming from advanced and higher level applications. Only last month HPS president Jack Bolick paid IPS the compliment of suggesting that the two companies were pursuing similar strategies which set them apart from the other DCS vendors. The difference however is that HPS never lets anyone forget that it remains, first and foremost, a DCS vendor, not least by such presentations as Jean-Marie Alliet’s two hour technology tour-de-force on Experion at last month’s European HUG meeting.

Vendor independent

By contrast, we at INSIDER haven’t actually attended an I/A press briefing since the original system was launched back in 1987! Nor does it help if both Invensys plc and IPS presentations repeatedly refer to a “vendor-independent platform,” even if in Batchelor’s presentation one did belatedly appreciate that the term was referring to InFusion rather than I/A. And the same could be said to a greater or lesser degree of Triconex, the field instrumentation business which, confusingly, sometimes seems to use the Foxboro and at others the IPS brand, and, despite the frequently underlined growing importance of software, of SimSci and Avantis.

Now it may be that none of this matters. Clearly the immediate objective is to establish IPS’ identity as “an integrated solutions company” with a “seamless engineering, industry solutions and consulting capability” and, in that context, any talk of products and technologies, even those as fundamental to IPS as I/A or Triconex, is, one suspects, seen as detracting from that message. Indeed the theory, as expounded by Batchelor, is that, at the level at which IPS is now talking to its clients, the interest is entirely in the ability to meet business objectives rather than in the technologies on which that is based.

Simple souls

Where this approach does present a problem, however, is when it comes to talking to the press. Truth is we’re simple souls and, while we can feign a polite interest in the solutions and consulting story, we find it difficult to write about it at any great length and certainly at any great frequency. Solutions, consulting and, dare one say it, asset management simply aren’t that sexy. And it’s a problem that’s further compounded when the focus moves to areas such as wireless and security, as it happens, the two topics selected for the other presentations for the tour. True they’re topical, and certainly both Gary Williams on wireless and Karl Williams on security are well worth listening to but, let’s face it, without specific products, they’re not going to generate the same amount of copy as an Emerson staffer on WirelessHART or a Byers on Tofino. That’s not necessarily a criticism of the strategy itself, but it does pose a challenge for IPS’ own media folk—how do they get those column inches by which they know they will, in the end, be judged?

“Wireless evokes suspicion and emotion”, said Gary Williams, IPS’ principal consultant wireless, enterprise architecture and integration. IPS’ strategy is based on developing partnerships such as that recently announced with Motorola, rather than currently having its own wireless devices in its own portfolio. In any case “Wireless shouldn’t be product-based,” he claimed. “Wireless is a medium,” and IPS treats it “simply as a medium for passing data to the DCS.” What that data might be depends to an extent on where you are. “Wireless in Europe and the U.S. are vastly different” with “personnel tracking big in Europe.”

“There’s been a huge amount of emphasis on hacking but, to my knowledge, only one known case of hacking of a control system,” said IPS principal consultant, security, Karl Williams, although control system users may not be able to determine whether particular unexplained events may have been caused by some malicious external intervention. Rather than hacking, however, “The greatest threat is from indiscriminate malicious code”. “Firewalls are not enough,” he said, but keeping off the Windows platform may not be the answer either since “Unix is currently flavor of the month for hackers.”