Unisys group 8_final

The Merger of Burroughs and Sperry
Group 8: Deepu / Mitali / Neha / Robin

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.
forerunnercompany'sCorporation. 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 company's 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 four
1886 - American ArithmometerAmerica's first electric typewriter.of security, data center
America's 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.

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

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

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

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

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.

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

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

Merger Principles

Partnership No Winners, No Losers in this Merger.
Maintained distinct computer lines

Meritocracy Only the best qualified survived

Unity A new identity, a new name

Dispatch “ Delay lends fuel to uncertainty”

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

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

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

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

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

SCARF : Status
Burroughs' employees felt they were not being
treated at par and their CEO was favoring Sperry

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

SC ARF : Autonomy
In the new system, there was no autonomy
System was centralized and highly regulated

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

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

Pitfalls and opportunities-Merger scenario

[ http://www.executiveblueprints.com/tips/090524mergers.htm ]

UNISYS – A Case of Horizontal Merger

Mergers and acquisitions typically do not double revenue
or cut operating costs in half. However, proper planning
can introduce new ideas, talents, and customers into a
very a very profitable mix. It is a business evolution, not a
quick fix.

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 process

Source : http://www.pwc.com.au/consulting/assets/publications/Seven-Tenets-Mar11.pdf

Unisys vs. IBM – 1990 to 1997

Financial decline over the years

Source : http://www.wiley.com/college/mar/kotabe372897/pdf/case20.pdf

SWOT
Strengths Weaknesses

Opportunities Threats

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 it

Source : http://articles.philly.com/1991-09-21/news/25803860_1_james-unruh-michael-blumenthal-unisys

Unisys group 8_final

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