By Joanne Wallen
In spite of the appointment of the company’s first Japanese chairman, ICL Plc’s chief executive Keith Todd, successor to Sir Peter Bonfield, has his feet firmly under the table at the newly styled systems and services company, and is banishing the old to make way for new blood that will help fulfill his vision of being not a hardware company but the best European-based systems and services company. ICL insists that the appointment of Michio Naruto, executive vice-president of parent Fujitsu Ltd, as president will make no significant impact on the day-to-day direction of the company. It has always been on the cards to replace Sir Peter as non-executive chairman, to enable him to get on with his work as the chief executive of British Telecommunications Plc.
Sir Peter stays on as non-executive deputy chairman. Naruto, who as a non-executive will visit the country only three or four times a year to attend main board meetings, is well qualified for the job. He has been involved with ICL since 1981, when the two companies first collaborated on mainframe technology, was one of the prime movers in Fujitsu’s investment in ICL in 1990 (CI No 1,568) and has been on the board of ICL Plc since 1991. Speculation has it that the appointment will bring the company closer to its goal of floating on the London Stock Exchange, but insiders claim the move proves only that the company is committed to doing so, and that it is still looking at least three years hence for the flotation. The company saw losses last year of 188m British pounds on revenue of 3.1bn pounds (CI No 2,920), and it says it will need to show sustained profitability over the next few years before it goes to the market. Todd’s vision is to focus on our customers and his slogan for the new year is One ICL. To this end, he says it is essential that the management team responds effectively to the demands of customers, and that the organisation’s structure is streamlined. He has therefore got rid of a layer of senior management with the departure of three group executive directors, and has promoted younger managers or employed people from outside the company. Ninian Eadie, who had apparently already announced his retirement after 36 years with the company, has been replaced as head of the technology division, which includes high performance systems and TeamWare, by David Tigue. Richard Liversey-Haworth, head of enterprise business and another ICL veteran has gone, as has Paul Whitwam who headed the ICL Sorbus service business. Todd is forming a Services Strategy Board, the membership of which is to be announced. He has also now completed the promised divestment of the loss making volume products, or personal computer division, and the company’s only remaining manufacturing business. Personal computers and servers were hived off to a joint venture with Fujitsu, Fujitsu ICL Computers Ltd, last year, in which ICL has only 20% (CI No2,922) and earlier this month the company sold its contract manufacturing company Design to Distribution Ltd to Canadian Onex Corp (CI No 3,074), thus taking the company out of manufacturing once and for all (CI No 2,869). ICL says Design to Distribution will remain its preferred supplier for the manufacture of its mainframe and high end Unix servers under a five year deal, but admits it now has a choice as to where the things are made. What ICL does retain is its High Performance Systems division, part of the technology division based in Manchester, which designs and develops OpenVME mainframes, Unix data center servers, and middleware including its Dais object request broker and i5000 enterprise directory server. So the streamlined business now consists of seven divisions, all focused on systems and services. They are ICL services, including CFM the UK facilities management business, ICL Network Services and ICL education and consultancy; ICL Sorbus for hardware and software maintenance; Financial Services; ICL Retail; ICL Interactive; Technology Businesses and ICL Pathway. The new consolidation is apparently popular with ICL’s users. Chris Walker, chairman of the ICL Computer User Association and data manager at Northumberland County Council, says on the whole, the new company structure has been warmly received by the users. He says if they had any complaints in the past, it was some confusion over who to talk to brought about by the number of different business divisions. He also welcomed Todd’s commitment to presenting a single company image, and to giving the customers high priority again, which he said had been lacking a bit in the recent past. Walker himself is a firm supporter of both ICL and the mainframe. Northumberland Council has, he says, just made a further long term commitment to ICL mainframes, and he believes that on the whole, ICL users are pretty loyal. However, in the event that some do decide to move down from mainframe to client-server, Walker recognizes that ICL will face competition from server vendors such as Hewlett-Packard Co, Digital Equipment Corp and IBM Corp. ICL also recognizes this inevitability, but says it has the expertise to integrate and install any of its competitors’ systems, and in its new guise as systems integrator and services company, it has no problem dealing with hardware from other vendors.
Todd wants the company to be seen as a competitor to the likes of Electronic Data Systems Corp, IBM Corp or Andersen Consulting, neither of whom, he points out, make hardware. The company feels it is already being taken more seriously as a competitor to these companies, and cites its recent win of the project to automate the UK’s Post Office Counters Ltd, where it beat consortia led by both Anderson and IBM (CI No 2,915). Without the losses from volume products and manufacturing, the company’s figures look definitely more positive. Mr Naturo will therefore undoubtedly allow Mr Todd to get on with the job, as long as the figures stack up and Fujitsu begins to see that all important return on its investment.