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Unisys group 8_final

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  • Rally to the cause Giving common purpose in the organization Name of the new company contest Open to all members of the merged firm (Highly successful – came up with the name UNYSIS – united information systems) Blumenthal’s trips to different facilities of Sperry and Burroughs to address customer’s apprehensions Decided to use task forces that divided the organization in business areas (MIS, Sales, etc.) Temporary governing Body: Merger coordination council – gave leadership, managed each task force 4 Merger principles Merger Coordination Council – Six integration objectives
  • They chose the structural orientation thinking it was different and highly specialized. Due to huge geographical mass of the new company, they though that LOBs would be more efficiently managed at lower level. “ Due to the high pressure of Blumenthal’s targets, all the challenges became even more challenging” They decided to have 5 LOBs instead of 3 going against the suggestion of task force to space it out in 2 years. LOB orientation increased the cost and complications but they hoped that it would enhance the knowledge of sales persons They hoped it will help aligning the executive goals to organizational goals
  • By the year end 1986, Unisys eliminated many duplicated services, raising 1.8 billion to retire much of the debt of the company. Sale of Sperry’s aerospace unit to Honeywell for 1.2$ billion Sold a part of Burroughs’s Memorex subsidiary to an investor group for $550 million Closed many plants, negotiated lower-cost purchasing agreements Consolidated R&D Reduced staff by 12000 They had cut some of Sperry’s new product developments due to perceived lack of demand Shared technologies and investments in many areas of specialization
  • Distribution system were not functioning properly- Customers were complaining regarding the efficiency and accuracy in delivery They launched a new distribution system in 1987, which was too early to come up with new system as per one of their executives. They decided to run both distribution systems parallel until the new system could come into existence. They didn’t view the situation as sensitive to act immediately. Integrating MIS system for the entire country
  • Transcript

    • 1. The Merger of Burroughs and Sperry Group 8: Deepu / Mitali / Neha / Robin
    • 2. Agenda
    • 3. Then & Now 1994 – Services and 1994 – Services and 1984 – Burroughsforms unitmerge to form 1989 – Unisys introduces MicroSeries, first 1989 Sperry and Burroughs merge the first 1992Burroughsforms unit to Series, 1992Unisys introduces Micro A, to form – – Unisys Burroughs to A, the – Unisys introduces A 1986 – – solutions become theA 1986 – Sperry and introduces 1984 solutions become the 1980 – Burroughsthe IT desktop forerunner of golf IT services. delivercurrent ClearPath HMP NX delivercurrent ClearPath HMP NX desktop services. forerunnercompanysCorporation. first introduced of Unisys Corporation. first introduced 1950 – Remington 1980manufacture the sell single largest golf scoring service 1910 – Sperry Gyroscope Co. founded to– – Burroughsand sell single largest and system. service scoring 1910 – Sperry GyroscopeRemington RandmanufactureUnisysfirst cache memory disk 1950 – Co. founded to–acquires companys navigational Rand Sperry introduces first cache memory disk acquires navigational 1976 Sperry introduces the B5000 Series, the 1976 109th introduces the B5000 Series, Scotland. 1961 at BurroughsOpen Championship Muirfield,the – Burroughs introduces system. 1961 at the 109th Open Championship Muirfield, Scotland. – the Corp. Eckert-Mauchly Computer Corp. equipment. Eckert-Mauchly Computer business. business. equipment. subsystem. subsystem. first dual-processor first dual-processor 1953 – Burroughs introduces first 10-key adding 1953 – Burroughs introduces first 10-key adding machine. Remington Rand introduces UNIVAC 1103 machine. Remington Rand introduces UNIVAC 1103 1949Unisys2007 – Rand produces 409, center in 1933 – – – Windowsformed. introducedcenter inStealth 1949 – Remington Unisysinto helps industry 2004Remington Rand produces data contracts – – Sperry 2008 enterservers Unisys unveils NT is 409, 19972001 – – 3D Blueprinting2011long-term unveilsnew, 1997 – Unisys3D Blueprintingopens leadannounces new, 2001 Sperry Corp.enterservers–leadannounces Stealth 2008 NT – long-term servers 2004–CustomersUnisys computer. industry Windows– Unisysintroduced 1951 –1933 world’s Rand deliversintohelps Beijing Airportwith 1951 – Remington firstbegins shipping aitsBeijing Airportwith – Customers –2009opens Unisys contracts 2007 – formed. Unisys Corp. 2009 is Unisys Remington Rand delivers2011 – aits breakthrough Unisys – data the world’s price/performance. ES7000 servers 2000 –2006 – Unisys shipping ES7000 Unisys Unisys computer.breakthrough 2000 2006 – begins develops Olympic Unisys businessthe “green” design the Typewriter and develops machine, Games first portable thestrategy design Games business adding machine, on the 1925 – Burroughs introduces first U.S.focused- “green”for Secure on the 1927 – Remington Typewriter and Unisys 1927 – Remington to price/performance. Olympic secure 1925 – Burroughs introduces withU.S.focused-strategydebuted secure UNIVAC computer the innovative to provide a snapshot of with innovative 2008 debuted Virtual prepareCensus Unisys building Virtual the forUnisys UNIVAC computer to first portable adding fora snapshot of prepareCensus 2008 building for Solution Unisys Security Index to provide Secure 2010Solution Unisys Security Index Unisys solution residing on 2010 weighing 20 pounds.Bureau. Remington Rand Kardex merge to form Rand Kardex merge Remington Typewriter introducesin theUnisys- on weighing 20 pounds.Bureau. Remington to form Remington Typewriter strengths in theresiding company’s introduces a Unisys- partitioning (s-Par®), growing Terminal, a company’s strengths consumers’ sense of security solutionareas Terminal, a partitioning (s-Par®), areasgrowing consumers’ sense of security in four a center in four1886 - American ArithmometerAmericas first electric typewriter.of security, data center Americas first Rand.1886 - American Arithmometer Co. founded electric typewriter.of security, data Rand. Co. founded markets a federal government-certified markets developedgovernment-certified a federal virtualization developed virtualization 1955 – Sperry and Remington Rand merge to formto protect mobile 1955 – Sperry and Remington transformationfor Intel Rand merge to formto protect mobile transformation and outsourcing, end USB device technology and outsourcing, end USB device 1905 – American Arithmometer renamed Rand. technologyMachine processor- 1905 – American Arithmometer renamed Burroughs Adding Machine processor- Burroughs Adding for Intel Sperry Rand. outsourcing and support services, Sperry user outsourcing and support services, user users’ data and make it is readily users’ data and make it is readily Co. Co. based ClearPath servers. based ClearPath servers. and application modernization. available only to those and application modernization. available only to those 1923 – Burroughs introduces direct multiplication billing 1923 – Burroughs introduces direct multiplication billing authorized to view it. authorized to view it. machine. machine.
    • 4. UNISYS American global IT - United Information Systems Merger of Burroughs & Sperry Portfolio of IT services, software and technology More than 100 countries across the globe Drivers  Creativity  Technical excel lance  Tenacity  Can do spirit
    • 5. BurroughsA $5 billion company (1986) – selling mainframe computers to non-defense marketsHighly CentralizedProducts of very high quality and high marginEmphasis on top fiscal oversightInstituted program management overseeing every product through R&D, manufacturing & distributionManagement style was top down and apoliticalMarketing & Sales activities were organized geographically (in functional structure) – Only the banking group had LOB structure
    • 6. BurroughsService reps and sales –people dedicated to particular product linesBurroughs was a highly progressive company, welcomed new ideas and new peopleCompany stressed on putting qualified people to appropriate jobsEmployees more business and fact oriented and loyal to their allocated budgets
    • 7. SperryDelivered Univac, in 1951 – the first commercially available computer.World leader in the large mainframe marketPrincipal customer was the federal government.Committed to becoming a supplier in complete systems. Customizations as per customer requirements.Organization structure was decentralized- All the business functions like R&D, operations and product development were given significant autonomy
    • 8. SperryHardware, software and Service personnel were assigned to LOBs – 7 LOBs before mergerSales personnel were assigned business accounts and they had dedicated service personnelCustomized products – multiple projects – lot of delaysEngineers had high autonomy – their projects were expensive and intensiveOrganization environment was more familial and political.
    • 9. Intentions behind the MergerSperry’s mainframe customer base was worth $17 billion.Overlap in customer base (with Burroughs’) was just 5%.Sperry was also strong in the defense systemsJoin the forces of Burroughs’ business mind and Sperry’s creativityRemain in the information system business for a long termSell total solutions to the customersEconomies of scale
    • 10. Initiatives take for smooth integrationInvolving consultants to tackle the human element of the merger – sounding boards, morale auditorsRe-Branding the new entity  Open to all members of the merged firm (Highly successful – came up with the name UNYSIS – united information systems)Continuous and effective confidence building communicationTemporary governing Body  Merger coordination council – gave leadership, managed each task forceBlumenthal’s trips to different facilities of Sperry and Burroughs to address customer’s apprehensions
    • 11. Merger PrinciplesPartnership No Winners, No Losers in this Merger. Maintained distinct computer linesMeritocracy Only the best qualified survivedUnity A new identity, a new nameDispatch “ Delay lends fuel to uncertainty”
    • 12. Merger Coordination Council (MCC)5 executives from Burroughs & 3 from Sperry formed the MCCLead by the ChairmanMCC Objectives  Develop new organization  Integrate marketing worldwide  Review noncore businesses  Consolidate operations  Integrate products and technology  Improve financial performanceTop 4 executives formed the EO  EO acted as a unified management office
    • 13. Task Force12 task forces in totalTasks  Initial fact finding  Recommendations  ImplementationsLogic  People dedicated to the problem of building a new company with new management  “task oriented way”  Staffed by a variety of people
    • 14. Line of Business (LOB) Moved from Geographical based business orientation to LOB based Established 5 LOBs  Airlines & Communications  Public Sector  Defense  Industry  Commercial Fast-track the LOB process, increasing the overall cost Make employees focus on a narrow business and be more proficient LOBs gave Unisys a competitive edge over their competitors
    • 15. Cost savings Eliminated duplicated services – raised $1.8 billion, retired much of their debts Sold Sperry’s aerospace unit to Honeywell for $1.2 billion Sold a part of Burroughs’s Memorex subsidiary to an investor group for $550 million Closed many plants, negotiated lower-cost purchasing agreements Consolidated R&D Reduced staff by 12000 Cut off of Sperry’s new product developments due to perceived lack of demand Shared technologies and investments in many areas of specialization
    • 16. Problems facedInefficient Distribution SystemsCouldn’t choose existing systems due to cultural differencesUnrealistic deadline of a year didn’t allow for proper implementationThey launched a new distribution system in 1987, which was too early to come up with new system as per one of their executives.They decided to run both distribution systems parallel until the new system could come into existence. They didn’t view the situation as sensitive to act immediately.Integrating MIS system for the entire country
    • 17. UNISYS Analysis
    • 18. SCARF : StatusBurroughs employees felt they were not being treated at par and their CEO was favoring Sperry
    • 19. S CARF : CertaintyAfter the merger, even top employees from both companies were worried about job securitySperry’s employees were skeptical about Blumenthal’s intentionsEven the MCC meetings were guarded, cautious and tense  Each side was apprehensive as they were in direct competition for jobs in the new firm
    • 20. SC ARF : AutonomyIn the new system, there was no autonomySystem was centralized and highly regulated
    • 21. SCA RF : RelatednessObservable difference in work cultureSperry people were unable to relate to Burroughs’ management  Burroughs’ Management was too concerned with money and short-term savings Burroughs people found Sperry’s approach to be alien  Sperry’s approach was high value and quantity, but less efficient and profitable A “We” and “They” mentality present
    • 22. SCAR F : FairnessBlumenthal tried to be fair to the workforce  People who were non-performers were laid off irrespective of their designation or association On the contrary, Blumenthal pushed people into blending with the merger
    • 23. Pitfalls and opportunities-Merger scenario [ http://www.executiveblueprints.com/tips/090524mergers.htm ]
    • 24. UNISYS – A Case of Horizontal MergerMergers and acquisitions typically do not double revenue or cut operating costs in half. However, proper planning can introduce new ideas, talents, and customers into avery a very profitable mix. It is a business evolution, not a quick fix.
    • 25. Seven Fundamental Tenets of successful Integration  Accelerate the transition  Define the integration strategy  Focus on priority initiatives  Plan the integration and prepare for Day One early  Communicate with all stakeholders  Establish leadership at all levels  Manage the integration as a business processSource : http://www.pwc.com.au/consulting/assets/publications/Seven-Tenets-Mar11.pdf
    • 26. Financial & Market Status
    • 27. Unisys vs. IBM – 1990 to 1997
    • 28. Financial decline over the yearsSource : http://www.wiley.com/college/mar/kotabe372897/pdf/case20.pdf
    • 29. SWOTStrengths WeaknessesOpportunities Threats
    • 30. 7 Dimensions of Culture
    • 31. Leadership  Setting very high (sometimes) unachievable targets. Pushing the entire organization with you without developing a general consent.  7 month deadline to streamline the process  7 month deadline to achieve the $7-$9 return on shares  Deliberate fast-tracking of all integration processes so that people don’t have time to think over it  Implementing all LOB’s together  Obsessed with neutrality- the decision for a new distribution system  Retired from UNISYS in 1990. Collected $14.7 billion in compensation for the merger. Earns a pension of $500000.  Currently works for an investment banking house (in Paris) that is dismembering Unisys in an effort to save itSource : http://articles.philly.com/1991-09-21/news/25803860_1_james-unruh-michael-blumenthal-unisys