Conference 7.286::digital

    In VTX, "MM" is the name of the infobase.  It has online copies of mgmt
    memo.
    
    There you'll get the official definitions.

    For those who don't want to go look elsewhere:
    
    (Info courtesy of Larry White presentation.)
    
    ABU:  Account business unit.  Worldwide entity which encompasses
    	an entire corporate account, buying anywhere from one product
    	per year from Digital to many products, from many sites, in
    	many nations, etc.  There are app. 284 ABU's which make up
    	more than 90% of DEC's revenue.  Also known as CABU's, Customer
    	Account Business Units.  Includes direct selling, sales support,
    	loan & demo, account admin., system integration and negotiation
    	of customer allowances and discounts.
    
    IBU:  Integration Business unit.  Manages the space between DEC
    	/third party hw, sw, service and Customer performance result.
    	No one admits to this, but it sounds sort of like a chunk
    	of the old (product lines).  Includes applic. dev, acq and mgmt,
    	sales training, advertising, product reqm'ts, sales support,
    	segment strategies, consulting, etc.  ~100 or so of these??
    
    PCU:  Product creation unit.  Handles product/component design and
    	development, mfg., service delivery, base product mktg, sales
    	support, r & d, technology strategy and technical training.
    	~ 25 of these?
    
    SCU:  Same as PCU, except for service.
    
    All of these entities must be independently profitable, and are
    are accountable.  How the needs of all these groups get merged
    together is the tough problem--there were no good answers at the
    presentation I attended.  
    
    	Also, as these groups are measured on their own "pseudo P 
    and L's", and they are supposed to be able to choose what they 
    want to pay for, the merging of corporate vs. unit values should 
    be an exciting problem.  For instance, will there be a corporate 
    "tax" to the P&L for activities such as the company
    outing, or will each group independently decide if they will
    fund ANY such activity in a given year?  (please don't go down
    a rathole--I just use that as an example of "corporate values"
    that could be held differently at the unit level.)

RE: .2

O.K., but recently I've heard of MBUs.  What are they?

    Manufacturing Business Unit, at a guess.
    
    	- andy

    Yes MBU refers to Mfg Business Unit which in days of old (aka last
    year) was the partner of the PBU Product Business Unit. Now the MBU is
    effectively under the PCU.
    
    /jim

    
    OK, thanks, but then what is an ABU meaning Applications Business
    Unit?  I had never heard of Account Business Unit.  Seems we're
    going to have our acronyms confused here.
    
    And referring to the last one, what is the difference between
    Applications Business Unit and Product Business Unit.  The "creation"
    units seem clear enough to me, but the lines defining one business
    unit from another are more fuzzy.
    
    Steve
    

    The way I understand it the old ABUs (Application Business Units) are
    now IBUs (Integration Business Units). The new ABUs (Account Business
    Units) are new. What used to to be a PBU (Product Business Unit) is now
    a PCU (Product Creation Unit).
    
    So if you hear the term ABU you need to ask if the speaker means old
    ABU or new ABU.
    
    This is all meant to make Digital more profitable. We shall see...
    
    Dave

    
           NEW MANAGEMENT SYSTEM = STOVEPIPES FOR THE NINETIES!
    
    There is a definite risk that our esteemed management may transfer some
    of their parochial skills into the "New Management System". The
    negotiations between business units hasn't really started yet; they're
    all working off some rudimentary transfer pricing formulas so far.
    Given that there are more than thirty Product and Service Creation and
    Integration Business Units (and not counting all the Account Business
    Units) the "fun" will really begin next fiscal year.

    re .9
    
    >>  Given that there are more than thirty Product and Service Creation
    >>  and Integration Business Units (and not counting all the Account
    >>  Business Units) the "fun" will really begin next fiscal year.
    
    I may be wrong because the definition changes frequently(!), but by my
    count there are approximately 89 PSCBU's and IBU's, plus 900 ABU's. 
    You're right, the fun(?) has just begun.
    
    	Don G.
    
    PSCBU = Product and Service Creation Business Unit;
      IBU = Integration Business Unit (Industry Mkt'g, EIS etc.);
      ABU = Account Business Unit. 
    
                                                                 

    re; the last  and a couple back...
    
    An MBU is the new term for an Application Business Unit. It does NOT
    stand for Mfg Business Unit.
    The MBU is responsible for taking the budget that the corporation gives
    to the unit, in my group this amounts to over twenty million dollars, and
    turn a profit on that investment. This is where the MBU has to take off
    its corporate hat and become more entreprenuerial(sp), use the budget it
    has, to create product or offer services for a price that returns a
    healthy profit to the company for their [approx] 20 million dollar
    investment.
    My group is also an IBU, what this means is that we put our corporate
    hat back on and behave in ways that benefit the whole company, without
    regard to the profit we must return for our operating budget. We still
    are responsible for that ROI, mind you, but in the role of the IBU our
    group must get very creative in how we spend the company's money.
    Our group manager refers to this process as learning to walk and chew
    gum at the same time. It is a new model, and a new way to conduct our
    business. He refers to it as the New Management System. Much will be
    written about the NMS according to what he has learned about it.
    
    In any case, there you have a brief description of the MBU...
    
    Regards,
    Brian

    
    
    This topic is becoming muddier for me with each reply, but what
    does come more clear is why I wrote .0 in the first place :^{
    
    Steve
    

    
    And do all these ever changing names have any real impact on customers'
    perceptions on how well we can satisfy their wants, solve their
    problems and meet their expectations?
    

Am I the only one who is confused?

Perhaps this can be refered to as the "organizational setup d' jour" ?

    
    re .14: No.
    

    
    The xBUs were explained in a Management Memo a few months ago, although
    they might have realphabetized themselves by now. I recall that it was
    a particularly confusing article even by MM's standards ... whoops
    maybe I am getting NOTES crossed!

We had a high muckity-muck type explain it locally in the following simplified
way.

The PCU/SCU creates a product or a service.
To create it incurs a certain cost, say $100.
The CU is told by the corporation that they will make a small,(10% for example),
profit on this product. So they create a 'transfer cost' of $110.


The IBU, or whatever they call the integration/value added group, is charged
with taking these various products/services and adding value to create a
'solution'.  To create this solution they must 'buy' the products and services
from the creation group at the aforementioned transfer cost.
They then markup the 'solution' an additional amount based on the value they
add. They may not add more markup to the product or service itself, only the
value that they add plus a 'small' profit.  We now have a 'solution' that has
a 'transfer cost', i.e. the dealer invoice cost. Let's say their final
solution now has a transfer cost of $1000.

The ABU, or the 'sales' organization, may now sell that solution to the
customer. An MLP price for said solution will exist, i.e. Manufacturers
Suggested Retail Price. So the salesy type can walk into Customer Shop
knowing that his organization has already paid $1000 for this solution and
that it has an MSRP of $10,000.  So when the customer says, "It's great, but
I won't give you a dime over $8000 for it!", the salesy type can sit back with
furrowed brow, fiddle with calculator as if making a serious decision and then
look up, smile and say, "It's a deal. Sign right here." - instead of "I'll have
to get back to you on that."

    
    Re: .18
    
    If ALL the things planned, implemented, etc. were explained
    in such a simple, concrete way the rest of us who spend lots
    of time scratching our heads about "what they're up to" would
    be able to go on working to help make it successful instead of
    having to figure out what it is that we should be doing next.
    
    thanks,
    Steve
    

    re: .20 	- It's been my experience that the folks at the top are
    very good at giving simple explanations that make alot of sense and
    are easily understood. The message gets mangled as it flows down thru
    the ranks of wannabe's and needtofeelimportants that either details
    get withheld(knowledge is power, right?) or the message gets 
    trumped up, or otherwise mangled in the name of power, politics, or vanity.
    
    		You can usually trust your instincts if you try and
    reduce the information to simple, common sense terms. Almost always
    you will come up with the same information as was uttered at the
    company summit.  
    
    		Maybe your manager or his/her manager or even your
    local group manager or VP comes across as a real idiot, especially
    when something emerges that was fondled by his/her staff, but I
    think it is a generally true statement that these folks are anything
    but. When they do come across that way, there is almost always some
    group effort hidden from your perception that makes it seem so.
    Such are the wonders of politics.  Imagine how it must feel to
    know you are looking like a total imbecile to people whom you
    want admiration and respect from, when you know that the consequences
    of revealing the wrong information might screw up a negotiation,
    totally piss-off someone you cannot afford to pissoff, or otherwise
    harm progress.  Of course there are the times when idiot and imbecile
    hit the mark square on, but then we all know what that feels like,
    right?
    
    	bob
    

    If I understand you correctly, what you're saying is that if I believe
    that a communication from upper management is imbecilic or otherwise
    nonsensical then I should presume that this imbecility is the value
    added by intermediate managers. That's what I get out of your first
    paragraph. Are you with me, so far?

    I don't know what the point of your second paragraph is.

    Then you go on to say that perhaps I should feel guilty for not having
    the whole story: "almost always some group effort hidden from your
    perception". In other words, I'm missing something; I'm the one who
    doesn't understand, I'm the one with the problem. Is that right?

    Then you want me to believe that this imbecility really masks an attempt
    to save some critical negotiation, prevents offending some unknown player,
    or otherwise is exhibited in the name of promoting progress.

    If I have all the tenets of your communication down truly, I guess what
    you're asking me to believe is that no matter how ignorant or misguided
    I might think an upper-management decision might be, I should write it
    off as being a misperception on my part.

    If this is any kind of a facsimily accounting of the rationale going on
    in this company, it's no wonder we're in a straight jacket.

    Bill

    The way I read .21 is that I need be understanding of the poor sole who
    is making a decision that 'appears' to be idiotic because of politics.
    
    The problem I have is the politics itself.  All the rest is just a
    by-product.
    
    FWIW,
    
    Mark

    
    
    i think both .22 and .23 understood me correctly.