Invensys a value supplier to clients
Manama, October 6, 2013
By Salvador Almeida
The way global technology company Invensys does business is dictated by an approach aimed at bringing value to a client’s assets and maintaining a long-term partnership that goes beyond the sale of technology, according to a senior Invensys official.
Dr Peter G Martin, vice president, business value solutions, said: “We’re trying to become a value supplier to our clients and this message is starting to get even into the oil and gas industry which tends to be a little more conservative relative to economic value relationships.”
The conservative line is that a client issues a request for proposal (RSP) and a vendor responds and sells his product if it is selected. “This approach has gone on for 50 years and what we found is that, by following that process, it basically puts us in a position where we’re not really the solution provider. The solution is being defined not by us but by the end user,” said Martin in an interview with Gulf Industry, our sister magazine, on the sidelines of the Foxboro & Triconex Global Client Conference in San Antonio Texas.
The solution may not have much value and this does not make the vendor a good partner to the client, he said.
The approach is to build within Invensys two types of business consultants - one for specific industries and the other geared towards how to create business value for the client. The consultants work with clients to identify problems based on how much economic value the opportunity is costing them. Invensys has developed an approach to measure economic value in real time through a real time activity-based costing view. By measuring the economic result, Invensys can show specifically how much value it has created for the client, he said.
Invensys has formed a new kind of sales team called account managers who go into the executive levels of its customers’ businesses because it is the executives who are measured on business values, not engineers. Engineers are measured on on-time, on-budget delivery of projects.
Martin said customers have been downsizing tier work staffs very significantly and they can’t possibly do as much as they were doing earlier. “Our job is not to be process design engineers. The client does that. Our job is to be process automation engineers. If we are not improving the value for our clients then we shouldn’t be doing business with them. Our job is not just to push technology to sell. The way we measure ourselves is if our customer gives us $1 million and we give him back $4 million in one year, then we’ve done something for our client that is as good an investment as could be made out there.
“I mean we’re convinced about automation, but automation correctly applied should be the best investment our customers can make and right now they don’t see it that way. We’re trying to change that. So that’s our strategy."
“Most of the oil companies have invested millions and millions of dollars. But they’re not getting the most value out of their assets.” Invensys has the technical knowledge to get value out of their assets no matter where they come from and this leads to a different type of relationship not based on “bits and bytes” but on driving value. “We’re trying to get them to measure us on the basis of measurable business results.”
The concept behind Foxboro Evo allows Invensys to drive business results because one of the features of the platform is that it can connect to any other platform. With Foxboro Evo you can pull together platforms from different companies into a single computing base. Invensys consultants can move in and help solve any new problems and show how much economic value they can create. “We’d like you to measure us not just on the fact that our technology looks nice with nice graphics but also on the fact that we’re helping you meet your business goals and while doing it in a measurable way. So that’s our strategy – being a little different from our competitors,” said Martin.
To underpin this, Invensys has invested in a lot of innovation and research to be able to measure the business in real time – measuring costs and profitability. The information is provided to anybody in the customer’s plant that needs it. This approach provides operational insight into specific types of jobs being done and improvements can be planned.
The improvements may call for removing a constraint in job performance. “If I can remove these constraints out of your equation, the measures are going to go up appreciably if by the way that means the integral of that ends up being the economic value we helped create. So if it costs $1 million and the integral value is $5 million, you just got a 500 per cent return on an investment.
“When you start measuring the business in real time you do some very intense modelling and convert that into financial modelling and so on. But this is a control loop and in the control loop you control the business variable. That’s our strategy. Our strategy is to move beyond just being a technology provider to being an economic value provider. We believe the whole industry should be looking this way.
Persuading the client through cost analysis and measurable results to make $5 million from a $1 million investment is an intelligent approach, Martin said. - TradeArabia News Service
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