Unisys Corporation - Term Paper Example

? Unisys Corporation submitted Table of Contents Introduction 3 Background of the organization 3 Current organizational structure 4 Competitors 5 Problems of the Unisys Corporation 5 Leadership role 6 Proposed new leadership strategy and organizational change 7 Conclusions 10 Introduction During the last decades Unisys Corporation has been one of the big players in the IT market. Main customers of the company have been institutions having large requirements in terms of data volumes and transactions, as well as with extensive geographical dispersal. The company mainly specializes in distributed systems. In this essay we are going to present the main characteristics of the company, the strategy that has been followed by its management, and the problems that the company has faced during the recent years. Following, we are going to assume the role of Unisys CEO and will propose a new leadership and organization model which we believe that will help the company to overcome its problems. Background of the organization Unisys is a multinational corporation. Its history goes back to 1873, when E.Remington & Sons, a small typewriters company was founded. In 1905 the company was renamed to Burroughs Adding Machine Co. which merged in 1955 with Remington Rand, a company that in 1948 had produced the world’s first large-scale digital computer, ENIAC, later renamed to UNIVAC. In 1986 Burroughs and another computer company, Sperry, merge to form Unisys Corporation. In 1992 the company forms unit to deliver IT services. Since then, the company gradually becomes a leader in the market of mainframe computers. In 1993 Unisys introduces 2200/500, an edge-technology mainframe machine. In 1997 Unsisys Windows NT servers lead the industry of windows based servers. After 2001 customers are entering into long-term contracts with Unisys and the company signs outsourcing contracts with large corporations. Current organizational structure The current organizational structure of Unisys Corporation is the result of an effort initiated in 1997 by its new management team aiming to completely reorganize the company and transform it from a classical computer manufacturer to an integrated provider of IT solutions. Due to the fact that the company faced financing problems including a large debt, the procedure of this transformation proved to be not an easy task to accomplish. Today Unisys is a worldwide information technology services and solutions company. The company has presence in numerous areas of the world. On top of the company hierarchy are the Chairman and CEO, as well as the following leading positions: -Senior vice president, Worldwide Human Resources -Senior vice president / President, TCIS / President, WW Strategic Services -Senior vice president / President, Federal Systems (US government) -Senior vice president / President, Global Outsourcing & Infrastructure Services -Senior vice president & Chief Financial Officer - Senior vice president & Chief Information Officer - Senior vice president, Corporate Development - Senior vice president, General Counsel & Secretary -Vice Precident & Treasurer - Vice Precident & Corporate Controller At the subordinate levels there exists a number of Regional heads, that are responsible for specific areas of the world, and below them the country general managers. However the whole organizational structure not strictly vertical. There exist a number of company operations that are decentralized and others that are centralized. Competitors The main competitors of Unisys include the traditional large-scale computer manufacturers such as IBM, group BULL, Fujitsou and HP have been the main “traditional” competitors of Unisys in its Core business, the mainframes market. In addition during the resent years, those companies, as well as numerous new ones -e.g. consulting integrators such as Accenture - compete Unisys in the new market of Systems integrators and Integrated Solutions Providers. Problems of the Unisys Corporation Although Unisys was the pioneer in the market of large scale Information systems, during the last decades the company strives to keep its position as the top brand in its market field but with only partial success. A number of competitors gain more and more share. Unisys is not any more a name that one will hear everywhere when talking about Information technology. Until the early 80s Unisys was competing on an equal level with companies like IBM. When Large organizations such as financial institutions or other private and public sector organizations with high data storage and processing requirements had to come to a decision about their mission critical information system, the Unisys Univac mainframe was usually one of the finalists in their possible vendors list, together with IBM mainframes and one or two more names. However, as years passed, new technologies emerged. The old monolithical computer systems ceased to be the protagonists of computers. They gave their position to new technologies, the personal computers, the windows-based world, the internet. Spotlights turned focus on those new technologies. Most companies of the old “monolithical” computing era realized early enough that in order to remain in the centre of technology interest and not be forgotten by the markets and by their customers they should find a way to combine the new world with the old. For instance IBM developed client server technologies, with 3-tier systems that allowed the combination of mainframe and windows-based technologies, giving to their customers new operating suites that combined the benefits of the mainframes power in the back end with the flexibility and the modernization provided by the windows-based world. At the same time, most of the leading players realized that in order to maintain their leading position they had to become more client focused, i.e. more focused to the client needs than to just selling computer boxes. In that way they quite successfully transformed their products from just “computers” to solutions. Their marketing strategy changed in order to be service oriented rather than product oriented. Customers should now have to choose integrated IT solutions, not just IT systems. This is what made the difference. Unfortunately Unisys did not do that well in that field. Although the company did make efforts to become a systems/solutions integrator, by developing consulting services in parallel to selling products, it was not made possible to catch up with competition. As a consequence, the company profitability has fallen dramatically during the recent years. Although the brand is still strong, it is not any more the pioneer that used to be before. Competitors gain more and more share During the recent years Unisys has been encountering severe financing problems. Financial results of the recent years have been relatively weak for a firm of such size. The company experiences declines in mainframe sales that is its core product, and expansion to new markets has slowed down. Consulting and Integrated Solutions services have not achieved the expected results. There is not a solid approach for positioning the brand against competition that is getting stronger from year to year. The company’s organizational structure does not really help the company to achieve its goals, as it is quite complex and lacks flexibility. Leadership role In the previous sections we presented the main problems that Unisys is facing. Following, we are going to assume the role of the Chairman of Unisys Corporation. We are going to identify the main actions that have to be taken in order to reposition the organization as a leader in the IT market by achieving competitive advantage towards its competitors. We are going to propose possible improvements in the organizational structure as well as a new global strategy that could potentially help the Unisys to regain its leading role in the global market of Information technology. Proposed new leadership strategy and organizational change A new strategy and organizational change are required in order to reposition the brand name in order to create competitive advantage against its competitors, based on the improvement of the following main elements: Products and services Organization People Communication The new organization chart The new organizational structure of Unisys Corporation should be able to fully support the above model as show below in figure 1. Figure 1: The proposed organizational structure of Unisys The new organization consists of 4 independent global divisions, each of them responsible of managing the four basic components of the organization mentioned above. Central divisions will be responsible for maintaining total quality level in all the characteristics of the corporation by providing a common framework of business, that will include a global strategy, and skills which will facilitate the collaboration of people and processes throughout the whole organization, and optimize the utilization of all the company’s resources, technologies, practices and tactics worldwide. The divisions will be further subdivided in regional units which will be responsible of localizing and organizations components in order to fit the needs of the local markets. The numerous vice presidents positions of the old organization chart have been eliminated. Decision making will be far more easy within the corporation when having only 4 Division heads instead of the old, larger management team. Responsibilities will be much more clear. Integration of products and services into turn-key solutions for the Unisys customers worldwide will be much more efficient. A central research and development division will act as the source of innovation for the whole organization. In order to be more specific, we will consider the improvements that will be supported by the new organizational model of the company. Research and Development Division In the area of Research and Development, Unisys must ensure superiority of its product lines, based on the following factors: - Continuous improvement and strengthening of core products and services that will act as a basis which will allow the company to expand in other products. - Edge technology based on continuous research & development - Innovation, by introducing new technical solutions - Development of package “turnkey” IT solutions for specific industries such as banking or government sector. Human Resources Division In the area of human resources management Unisys must invest on its people, from the executives to the factory worker: - Value its people - Create a corporate conscience that will encapsulate the brand values, goals and mission - Inspire and motivate employees at all levels and regions - Manage the workforce diversity in needs, aspirations, and attitudes - Implement continuous personnel training programs that will cover both technical and business/industries related skills - Create an organizational culture that thrives on change Operations and Infrastructure Division Operations and Infrastructure division will cover the areas of Technology (Company IT infrastructure), Organization and financial operations. This division will help Unisys to become a true international corporation, ensuring full cooperation between central management and regional units based on the following success factors: - Streamline and optimize procedures and processes at global and at regional level Operations and Infrastructure Division In the area of products and services, marketing division must help Unisys to create a sound communication strategy that will broadcast its uniquity based on the following: - Create a global strong marketing & communications company strategy - Emphasize on the competitive advantages of the brand - Customize marketing at regional level - Establish marketing relations with strong players in related market fields - Diversification into new products and services areas where Unisys expertise and brand name will add value. - Seek opportunities in emerging markets, in countries where the mainframes market is not yet saturated. Such areas could be china or other developing countries in Asia and Africa. Strategic movements in products, processes, people and communication will contribute to the formation of the new brand essence of Unisys. Conclusions A new strategy and organizational change are required in order to reposition the Unisys brand name in order to create competitive advantage against its competitors, based on the improvement of the following main elements: Within the last decades Unisys has experienced certain problems due to its lack of solid strategy, increasing competition and market saturation. The company requires revising of its strategy and organizational structure in order to ensure its competitive advantage and leading position in its field in the years to come. References Bateman, Snell. Management:The New Competitive landscape. Mc GRAW-HILL, sixth edition, 2004. print. Marios Klapsis, “Unisys Corporation: IT Governance and Prioritization”, INSTEAD, 2004. Web. 13 Dec. 2011. “From Gyroscopes to computers: The prehistory of Unisys”Copyright © 1982-2001, Lexikon Services "History of Computing" ISBN 0-944601-78-2. Web. 13 Dec. 2011. Unisys Corporation official site, Web. 13 Dec 2011 Read More