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ABB plans to reorganize its worldwide enterprise around customer groups, aiming to boost growth by helping its customers succeed in a business environment of accelerating globalization, deregulation, consolidation and e-business, said Jörgen Centerman, who took over as president and CEO Jan. 1.

Under its new structure, ABB replaces its current business segments with four customer segments serving end users, working closely with two product segments that also serve all external channel partners, and a financial services segment. According to Centerman, ABB expects this transformation, which won't incur any restructuring charges, to be implemented in most markets by mid-year.

The four customer segments—Utilities, Process Industries, Manufacturing and Consumer Industries, and Oil, Gas and Petrochemicals—provide end users with faster and easier access to the full range of ABB's products, services and solutions.

Centerman said the two product segments—Power Technology Products and Automation Technology Products—cover all generic needs within the ABB Group. All products will be developed to fit into a common Industrial IT architecture.

The product segments also directly serve external channel partners, such as distributors, wholesalers, system integrators and OEMs (original equipment manufacturers). The Financial Services segment continues to provide services and project support for ABB and for external customers.

In unveiling the transformation's general structure, Centerman also announced the new executive team—effective Jan. 15—charged with implementing the new organization. Six of the 11 executive committee members are new.

ABB also created a new division, New Ventures Ltd., to act as an incubator for new businesses. "New technologies continue to be a key driver of growth for us," Centerman said. "Our R&D organization therefore remains critical. In addition, we're setting up New Ventures to identify, invest in and to accelerate the development of new business opportunities."

"The new structure allows us to grow faster by more easily delivering value to our customers," he said. "We have a unique, three-way combination. First, our vast knowledge of our customers' market environment, their business processes and success factors. Second, our world-class products and services. Third, collaborative commerce solutions that link the value chain all the way from suppliers through manufacturers to end users. This combination enables us to create comprehensive Industrial IT offerings, with all products and services conforming to a common architecture."

At a press conference set for Feb. 13, ABB plans to present its 2000 financial results according to U.S. Generally Accepted Accounting Principles (US GAAP). Details on ABB's strategy and how the new structure, together with US GAAP, provide greater transparency, will also be outlined on Feb. 13. Centerman added that ABB's plans to list its shares on a U.S. stock exchange remain on schedule.

"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 said. "Our new structure will make us easier to do business with and fully reflects our new vision of creating value and fuelling growth by helping our customers become more competitive."

This highly flexible mass customization requires common business and management processes worldwide, which, he said, is where the new segment—Corporate Processes—and the new executive committee comes into play. To make sure the new structure implements quickly worldwide, ABB created a function of the executive committee called Corporate Transformation.

"Common business and management processes are essential in a truly customer-driven enterprise. This will over time provide a single interface between us and the customer and free up our people to focus on creating greater value for our customers," Centerman said. "This is what our customers request today to capitalize on technology advances and rapidly changing markets to be more competitive. This, in turn, will fuel growth for ABB. At the same time, it creates value for our shareholders and for the communities and countries where we operate."

The new executive committee
In addition to Jörgen Centerman, as president and CEO, and Renato Fassbind, the chief financial officer, the new ABB executive committee consists of the following members:

Juho Lipsanen, currently business controller for the Automation segment, plans to head the New Ventures division. Sune Karlsson, head of the previous Power Distribution and Power Transmission segments, will focus on large projects as well as develop business in key emerging markets, reporting directly to the CEO, as a senior corporate officer.

Markus Bayegan, continues as chief technology officer at the head of Group technology, research and development. Bayegan will continue to report directly to the CEO, as a senior corporate officer. He also takes on a new role, serving on the board of directors of the New Ventures division.

ABB (www.abb.com) serves manufacturing, process and consumer industries, utilities, the oil and gas sector and infrastructure markets, with 160,000 employees in more than 100 countries. For more information, check out ABB Power Plant Automation's Power Online Storefront.

By April C. Murelio, Managing Editor, Power Online

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