ABB reorganises to meet Internet challenge

ABB has reorganised worldwide to focus on its customers instead of its products. The company claims to be the first in its industry to organise around customers rather than technologies.

The transformation of the group’s worldwide enterprise around customer groups is aimed to boost growth in a business environment of accelerating globalisation, deregulation, consolidation and e-business.

Current business sectors have been replaced with four customer segments serving end users, working closely with two product segments that also serve all external channel partners. There is also a financial services segment. This transformation, which will not incur any restructuring charges, will be implemented in most markets by the middle of the year.

The four customer segments are utilities; process industries; manufacturing and consumer industries; and oil, gas and petrochemicals. The two product segments – power technology and automation technology – will cover all generic product needs within the ABB Group. All products will be developed to fit into a common Industrial IT architecture. The product segments will also directly serve external channel partners, such as distributors, wholesalers, system integrators and OEMs.

The Financial Services segment will continue to provide services and project support for ABB and for external customers.

The realignment, announced last week by Jörgen Centerman (pictured), who took over as president and CEO on January 1, mirrors the reorganisation of the group’s UK operation last year. Centerman also announced a new 11 strong executive committee, which includes six new members.

A new division, New Ventures Ltd, has been created to act as an incubator for new businesses. ‘New technologies continue to be a key driver of growth for us. Our R and D organisation therefore remains critical.’ Centerman said.

‘The new structure allows us to grow faster by more easily delivering value to our customers,’ he added. ‘We are responding to a silent revolution in the market that is completely changing the business landscape. Faced with increasing complexity and speed – much of it driven by the Internet – our customers want clarity and simplicity.’

Centerman believes the Internet has created new opportunities for companies to collaborate with and deliver value to their customers. ‘Instead of the mass marketing of the past, the Internet allows us to interact with our customers one-on-one and deliver customised information, products and services on a massive scale,’ he said.

To ensure the new structure is implemented quickly worldwide, a function has been created on the Executive Committee called Corporate Transformation. The executive responsible for this function is the current head of ABB in the UK, Eric Drewery.