Manufacturing Executive - January/February 2009 - (Page 30) M WOR ERGER KING ? THIS E op a post-merger integration guide that looks at various areas of integration, including marketing, sales, R&D, human resources, IT, and finance. While the core integration team comprised about 20 individuals, at one point, due to the size of the endeavor, there were roughly 150 team members working on the UGS integration project, he says. In order to bridge what some considered a gap between hardware and software cultures, each of these areas of integration was co-led by a person from Siemens and an individual from UGS, as well as a Siemens Management consultant. Weekly calls were set up to handle any conflicts, with Newbury acting as the liaison to management when needed. When Helmuth Ludwig was brought in as president of Siemens PLM Software in summer 2007, he shifted the focus toward the software sell, which has a very different licensing structure and maintenance and service business model than hardware. Part of the exercise was to create account maps to find out how both organisations were addressing customers and where the cross-sell opportunity would be. “We would talk about the businesses and which customers were important, and at the end of the meeting the Siemens PLM guy would write down two customers he believed the automation side could help, and the automation guy would write down two customers where Siemens PLM could help,” Ludwig says. In addition to helping existing customers, the new combination appealed to new customers. Volkswagen Group had benchmarked a number of PLM offerings and identified Teamcenter as fitting with the company’s long-term strategy. UGS’ financial stability, however, was in question at the time, said Oliver Riedel, Volkswagen’s director of process integration and information management, during a presentation at Siemens PLM Software’s industry analyst event last May. The Siemens acquisition sealed the deal. “Siemens had been a strategic partner in manufacturing,” Riedel said. “And it was their acquisition of UGS that swayed us toward making the Teamcenter decision.” While there were mixed reactions from customers when the acquisition was announced, “all of our customers were positive about one aspect for sure, that UGS would not be in a bad position financially,” Carrelli says. The next question became: What will this mean in the future? Many customers thought Siemens would slow down the software business, Ludwig admits. But it has actually had the opposite effect. The delivery of the synchronous technology is a perfect example. “We have put more money into R&D, and that made it possible to speed up the release [of the technology],” Ludwig says. Indeed, some say Siemens is breathing new life into UGS, and they compare the atmosphere with the period when EDS owned UGS prior to spinning it out to private equity firms. “We felt when EDS was involved, they were sucking the life out of the Solid Edge product,” says Cory Goulden, CAD administrator at National Steel Car. “When Siemens took over, everyone in the Solid Edge community thought it was a good thing because historically Siemens has proven it is the type of company that makes a purchase because of how good the product really is. They bought it because they wanted to own it and make it better, not kill it.” How well Siemens will integrate the product portfolios, however, remains to be seen. “If you challenge them and say, ‘Show me exactly how all of these products work and where things need to go,’ they have a hard time doing that,” said an end user, who requested anonymity. But the product integration focus will likely sharpen now that the organisational integration is complete. According to Newbury, the last steering committee meeting outlining the post-merger integration happened in August. “We formally transferred lines of function, defined who is responsible, closed out the checklist, and reported back to management,” he says. “We consider the [integration of the companies] complete.” While getting the departments working together was fairly routine, the effort was complicated by the need to enforce new compliance rules resulting from the bribery scandal. “This was particularly difficult as we had a new company to integrate in and now we had all of these additional rules,” Newbury says. In addition, because UGS was considered completely complementary with little overlap in technology, Siemens wanted the UGS team to remain in place. But executives worried that the corporate scandal, which resulted in the departures of Kleinfeld and other top executives, might cause employee upheaval. “Our concern was high because UGS had a strong culture and strong ethics,” Newbury says. “Everyone on [the Siemens] team felt strongly about ethics as well, so we communicated as much as we could about what we would do to investigate the issues. We also held town meetings, [sent out] employee surveys to get feedback, and “ 30 AS STRANGE BEDFELLOWS [AS SIEMENS AND UGS] MAY HAVE SEEMED, THERE REALLY WAS A LOT OF HISTORY WORKING AROUND COMMON GOALS AND A COMMON VISION OF INTEGRATING THE VIRTUAL WORLD WITH THE PHYSICAL WORLD. Vice President of Strategic Marketing for Siemens PLM Software Manufacturing Executive JAN/FEB-09 “ Bill Carrelli Photos courtesy: Siemens
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.