November 2008

Invensys moves closer to solution provider model

EDITOR'S NOTE: Invensys Process Systems has been undergoing some change, and Steve Blair, president North America for IPS, sat down during the North American Client Conference in Dallas with InTech Editor Gregory Hale to talk about moves the company has made and other industry issues. This is the first of a two-part series.

InTech: Your company is talking about moving to more of a solutions provider model, but you have always provided services and solutions. What was the percentage in relation to the business as it relates to now?

Blair: I have two things to say about that. We have always offered services and solutions, but it was always separate piece of the business, and it wasn't integrated with the rest of the business. It was something else created in parallel. I think at the time the idea was that we needed to differentiate from our normal system product sales. So, at that time, it was probably no more than 10% of sales. So where we are today, solutions are an integral part of the portfolio, and it is a fully integrated piece of our business. Today, it is probably above 15% and heading to 20% of our business around the solutions piece. It obviously takes time to build. Now, because it is an integral part of the business, the entire sales force is selling solutions as opposed to a specific piece. In the past, we sold products, and we sold solutions. What we are trying to do is sell a solution that pulls products through.

InTech: Why the change now to a solutions approach versus three years ago?

Blair: I have thought about that quite a bit. I think you have to look at the history of the company. I joined about five years ago. When I joined, the financial situation at Invensys was really quite bad. And really the only way to go was up. At that time, we had an organization run by country levels, and we were also running by product lines, so we had a very complicated organization. Over the five years, the organization has gradually been simplified and streamlined so we have a matrix organization, which gets the best of the global functional piece and at the same time managing the P&L. When Paulett (Eberhart, chief executive and president of Invensys Process Systems) and Phil (Clark, senior vice president of global sales and marketing) came in, we started to get alignment of the product lines. That allowed us to integrate the entire thing and move forward in selling solutions. Three years ago, we probably were not mature enough to handle it. I think also, the market is ready now. Our clients are now telling us they are ready for the discussion.

InTech: You say your clients are ready for it. Do you think it will be an evolutionary process for them, or are they already ready?

Blair: I actually suspect they were ready for it earlier, but we weren't ready. So now that we are ready, they want to engage, and it is quite refreshing.

InTech: How do you differentiate yourself from the competition? They offer solutions and services, how do you differ?

Blair:  I think we differentiate in three ways. The first is the breadth of the portfolio, the breadth of the products and services. The second piece is the InFusion plant floor, which enables us to tie together our portfolio of products and services, but also tie in third parties, and that is a very positive thing for our clients when they see we can provide a solution for them without them having to get rid of their already installed base. I think the third thing is our people. Not that I think people with our competitors are bad, but I think there is a loyalty with Invensys because of the history and innovation. 

InTech: How much of your sales go through the channel?

Blair: I can talk about North America, and about 20% goes through the channel; and that tends to be in areas that are not our core industries.

InTech: So you don't see any potential with channel conflict with your partners?

Blair: I actually see it as an opportunity. If we grow at the rates that we are forecasting to grow, we are going to need to develop partnerships, alliances, and joint ventures, and we see that as a really good opportunity for channel partners and integrators to be part of a bigger network. I think it will be a challenge to not get into a conflict, but we are going into it in a very measured way. If you look at the IntelaTrac acquisition, that clearly fits into a space where we had a missing capability. (Invensys business unit Wonderware acquired in August Houston-based SAT Corp., a mobile solution provider that features the IntelaTrac Enterprise Suite, which offers workflow, procedural, and general task management capabilities focused around plant operations, maintenance management, production tracking, and compliance applications.)