Unisys CEO: New Services Play To Company's Strengths - InformationWeek

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Unisys CEO: New Services Play To Company's Strengths

Weinbach says a sharp focus on industry expertise and end-to-end competencies is the enabling factor in Business Blueprinting.

Unisys on Tuesday unveiled its Business Blueprinting service to help companies build adaptable, flexible infrastructures. Chairman, president, and CEO Larry Weinbach, who joined Unisys in 1997, talked to InformationWeek about the announcement and about how the company has been making a bigger imprint in the services market.

InformationWeek: How does this new service help address top executives' concerns about achieving agility in a real-time world?

Weinbach: The first thing that businesses are interested in today is, what [a project's] going to cost, what's the return on investment, and how do I know I'm getting a fair ROI?

We just did a study where 26% of respondents said that only half of IT projects get done as planned. They also found that only 20% of that half get done on budget, and analysts say our numbers are low! They say it's worse than we're making it out to be. So if you're a CEO, you look at this and say, how am I going to get more flexible, be more agile, get my business strategy and business vision to be supported by IT?

Our [Business Blueprinting] service will give CEOs the ability to look at the business strategy and vision and see how that will be supported by IT at the process level, the applications level, and at the infrastructure level. And then using the blueprinting capability, we see the ability to make changes at a high level—the vision level—and have that change drill all the way down to the infrastructure level. What it does is reduce redundancy, increase cycle time and reduce costs. Cost reduction is anywhere in the 20% to 25% to over 50% level.

InformationWeek: What about legacy systems—how do they fit into the scenario?

Weinbach: We're not talking about getting off a legacy infrastructure. Most companies that have tried to get rid off their legacy systems have had a lot of failures. [Business Blueprinting] gives you the ability to build around legacy systems.

This is like enterprise integration and connectivity. Enterprise integration means you take all the disparate systems in the company and you have a blueprint that shows how would you like them all to fit together, including the legacy systems, because most companies are not going to throw out their legacy systems. What they'll do is build around portions of it, and over time the legacy systems will disappear. Companies that decide to rewrite all their legacy systems—three or four years later they've been in trouble.

The first thing [Business Blueprinting] does is it integrates all these disparate systems. The second thing it does, if you think of connectivity as being vertical [as well as horizontal], as being from the vision down to the infrastructure, that when I make a change in the vision, I can drill it straight down into the process, application, and infrastructure. So think of it for enterprises as the ability to integrate your systems and to connect both horizontally and vertically everything you're doing.

InformationWeek: How will Unisys' expertise play out in the new service?

Weinbach: We own the blueprint [we create for clients]. When we go to client No. 2 in the same industry, we have the ability to bring them a blueprint, which they can then modify. It's one thing to build a blueprint and hire an architect to start from scratch, [versus. go] out and buy a set of plans and then make the changes you want on a set of plans. We'll have 13 different modules in the industries in which we operate. We can bring you a blueprint, speed up the process. And these blueprints were not built in a shop. These blueprints were built working in client situations.

Unisys is really a services-led technology-enabled company. I've felt since the day I came here that we really had to make the transformation into services. You can't do blueprinting if you don't understand the industries in which you operate. What this does is really bring to the forefront the thought leadership that we've created in the five industry groups that we've concentrated in, so we have the in-depth knowledge of the industry to create the blueprint.

This thing is built around industry expertise. Without that, and the modeling concepts we've created, you can't do it. And it kind of takes our end-to-end capability and enables us to pull it all together. We've got engineering people because of the hardware part of the business who work on blueprints, we have R&D people work on blueprints, we have our service people, our industry experts, so that when we create a blueprint it's really the combined intellectual capital of all these groups of people.

The thing that I think is most intriguing is, it's kind of a breakthrough from a cost standpoint. ... One of the frustrations, as I talk to CEOs, is, "Gee it takes so long. Is it going to get done on time, on budget? What am I getting myself in for?" The ROI issue today is even more significant than anyone outside the industry understands.

InformationWeek: Can companies take advantage of this service in their offshore outsourcing relationships? And speaking of offshore outsourcing, what is Unisys' own perspective on that?

Weinbach: If you look at outsourcing offshore, right now most offshore outsourcing is based on application maintenance and development and call centers. Blueprinting enables you to do the thought leadership, the industry creativity and knowledge, and then send the blueprint for the application development. It gives you much better control over the operation offshore if you've got an in-depth blueprint.

Most of the offshore companies today don't have the industry knowledge. They'll get it but it's going to take awhile. The competitive advantage we have is that we've got the in-depth industry knowledge.

We'll have probably 1,000 people by the end of this year offshore doing application development and maintenance. Probably we'll have another 250 working with us on business-process outsourcing, but there's only selected areas of business-process outsourcing that we can take offshore. We're partnering for offshore, but these are dedicated Unisys people. We manage, along with our partner, those people—mainly in India right now.

InformationWeek: What is Unisys' philosophy of the services market?

Weinbach: We came to the realization—it took us awhile but we came to the realization—that the end-to-end capability we have in the company is really one of the prime assets that we have. One is being global and the other is that we have the end-to-end capability so we can do consulting, systems integration, build the blueprints; we have the infrastructure capability, we can do the outsourcing, and yes if you want we can sell you hardware. That's what I call end to end. So we can use those resources, and if we allow ourselves to get pigeonholed into consulting versus outsourcing, then you begin to get into the silo approach.

We stay within our five industries and [bring something] proprietary [to solutions]. This means that you, the client, have to make a decision—get someone with the best solution or the lowest price, and we find that people want the best solution. That doesn't mean price isn't important, but they want the best solution. So you keep it away from commodity.

One of the things I'm a strong believer in is to have a very succinct strategy. There are obviously companies in this industry that are larger than us, but we need to have a very succinct strategy, we have to understand it and execute against a defined strategy. We can't be all things to all people.

I'll take you back to when I first came to the company. Every time an RFP came in, as long as it had a stamp on it, we mailed it back. Today it costs you tens of thousands—sometimes in outsourcing millions—of dollars to respond to an RFP. [We've changed so that now we] focus our attention to only go after things where the people and the company can answer the question, why would you select Unisys? If you couldn't answer the question, we won't give you money to fund the RFP. So we actually started budgeting what I call pre-sales dollars, and we did it against projects, based upon the question, why Unisys? Which meant if we were looking like everybody else, and using the same third-party software and applications, [what value is there in that?]. We want to be the value producer.

InformationWeek: Where will Unisys be a few years from now?

Weinbach: Go back five years ago, I said 75/25 [services/hardware] and the world thought I was smoking something. People said the company would never be able to make the transition. But we did it in about the time frame we thought it would take. Today I think it's market forces that will dictate the percentages. We're not getting out of the hardware business, we like the high end of the hardware business ... but ... if you look at market trends and all the prognosticators out there who are saying what's the growth potential of the services part versus the hardware part, services will grow more. I'm not trying to come up with a percentage saying it's got to be 75/25 or limit growth. If one is growing at 1-1/2 times the speed of another, so be it.

InformationWeek: Will we see the same consolidation in the services market that we are seeing in the software market?

Weinbach: I think it will happen in the services business, but only on a friendly basis in the services business. I thought that it would have been friendly in the software business. In the hardware business it could be unfriendly, in the software business it should be friendly, but you can almost make the case that in the services business it has to be friendly. It's a talent issue.

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