This article originally published in Self-Service World magazine, January 2007.
|
|
| Bill Nuti, CEO, NCR |
In June, Bill Nuti attended NCR's first U.S. Self-Service Summit. He had been CEO for less than a year, and while the event was not so well attended as previous European editions — about 75 people ambled between seminars and the combination exhibition/eating space — the people who were there mattered. Mixed among a heavy representation of NCR officials were the folks Nuti had come to see: customers.
Nuti has the conservative, serene look of a preacher in a suburban Baptist church, and adding to the soundness of the comparison was the fact he came armed not so much with a sales pitch as a sermon. Be they the faithful or the skeptical, people in the audience heard a man preaching one message from the mountaintop:
NCR will be the dominant player in self-service.
Like many companies, NCR is catching up to a changing world, where new synergies and consumer expectations test old business models and demand new ones. While NCR has rebounded nicely since 2004, the years preceding were tough for shareholders, with the stock losing about 25 percent of its value from 2001 to 2003. On the sidelines, waiting to tempt customers away from the Church of NCR, are significant new players such as Wincor-Nixdorf, which is making strong tries at the U.S. market against the background of European growth.
Is Nuti the right man to change the direction of a large company with more than 28,000 employees and a place in American business history?
Prior to his NCR appointment, Nuti served as president and CEO of Symbol Technologies, a company he joined as chief operating officer in 2002. During his tenure at Symbol, Nuti was credited with strengthening the company's product portfolio amid myriad corporate scandals and lawsuits. Under Nuti's leadership, Symbol returned to profitability in 2003 for the first time in five years, and from 2002 to 2004 the company increased its revenues by 24 percent.
Prior to Symbol, Nuti spent 10 years at Cisco Systems, rising to senior vice president of U.S. Theater Operations and Worldwide Service Provider Operations. His responsibilities included manager of Cisco's field operations, systems engineering, professional services and marketing, as well as its U.S. sales divisions, including Enterprise, Service Provider, and Commercial business. He also served as president of Europe, Middle East and Africa (EMEA) operations. Prior to his EMEA assignment, Nuti led the expansion of Cisco's business operations in the Asia/Pacific region and increased revenue several-fold in a two-year period.
Nuti's career also includes sales and management positions at IBM, Network Equipment Technologies and Netrix Corporation.
In 2005, Nuti was listed as No. 45 on Fast Company's Fast 50, an annual list designed to recognize industry leaders, innovators and technology pioneers.
And on Aug. 12, 2006, Nuti even hosted a fundraiser at his East Hampton, N.Y., home for Sen. Hillary Clinton. The event included an acoustic performance by Jon Bon Jovi and was attended by Bill, Hillary and Chelsea Clinton.
Some industry analysts believe Nuti's vision for the company already has occurred.
"NCR has some of the best self- service hardware (kiosk and ATM) in the industry," said Rufus Connell, research director of Information Technology for Frost & Sullivan.
"NCR has historically maintained the largest market share of the kiosk market with almost one third of worldwide market share in terms of revenues. NCR also is the leader in the ATM space holding more than one-third of the worldwide market share in terms of revenues. In my book they already are a leader in self-service based on the most important metric, revenue market share."
No one, however, is saying it will be easy.
"Given NCR's size, breadth of offerings and existing customer relationships, I certainly think it's possible that they could occupy a much larger role in the self-service space than they do now," said Bill Gerba, chief executive officer and co-founder of Wirespring Technologies Inc.
"However, they're going to need to be much more responsive to the needs of the industry if they ever want to become mindshare leaders. Their kiosk hardware offerings are a generation behind IBM, and their software/service operations have scored poor marks in the past — both of these will need to be addressed before NCR can gain any substantial ground."
Their self-service technologies must fit with the retailer's IT ecosystem. "They need to integrate tightly with POS, payment systems, inventory databases and other back-end systems, and NCR already plays in a number of those spaces," Gerba said.
"What's always impressed me about NCR is its global reach and its highly synergistic product portfolio," said Francis Duffy, a BCC Research consultant and author of "Self Service Markets: Prospects for ATMs, Kiosks, and Vending Machines."
"But somehow the firm seems to always fall short of leveraging these plusses to the max," he said.
"If Nuti can truly root out the gremlins in NCR's organizational culture getting in the way of this, NCR has the cache and now the cash to finally live up to its longstanding promise. But changing entrenched corporate cultures is akin to trying to run in waste-deep mud. It takes time, and NCR has just about run out of overhead it can slash to bolster its bottom line."
Alex Richardson, president of the Self-Service & Kiosk Association and managing partner of consulting firm Selling Machine Partners, said Nuti's vision for NCR is attainable, but more self-service acquisitions likely will have to occur.
"I think they'll continue to innovate," Richardson said. "But I don't know where his roadmap is headed. I think NCR will have to innovate or they will end up being bought."
Richardson said Nuti was certainly capable of achieving his visions for the company based on his ability to stabilize Symbol Technologies. But to turn NCR into an international leader would require the company to continue its investments in hardware and software industries in other vertical markets.
"Also, they must connect the dots between self-service automation process and growing investments in RFID," Richardson said.
Pressure? Even Nuti admits to a little.
"It is a great opportunity," he said in June. "It's also fairly stressful. You don't want to screw this up, to be honest with you."
The interview
During NCR's Self-Service Summit, in June 2006, Bill Nuti gave a group of journalists an in-depth look at his plans for the company, his vision of self-service, and how the two had become inexorably linked. For a complete transcript, visit http://www.selfserviceworld.com/billnuti.
Q: One of the things that strikes me about you is you have an almost missionary zeal. Did you have kind of a Road to Damascus moment when the light bulb went on for you that you needed to aim for dominance in self-service?
A: [It was] during the interview process, when I was interviewing for this job, over a year ago now. I always knew NCR. Man, NCR has been around 120 years. I knew who they were when they called for the job, you know. I started to do my own due diligence on the job, and obviously before you take any job like this, you better know whether or not there is a potential to grow by innovation and vision.
I've always loved the Teradata business (NCR's data warehousing division) as an operator. You can't not love anything that drops 22 percent to the bottom line, and as a software business it's hard not to love that business ... but it's not a very large business in the grand scheme of things. How much can that grow and how fast can that grow? You know, can it carry the rest of the company and of course the answer is no to all of those things, right?
Now, I have been in retail a long time and in financial services, which is where I grew up, so I have lots of contacts in that space — and I called customers, and what I got from them, and where the passion and evangelism comes from is, they're sitting back and telling me, you're missing the boat. You guys are not listening to us. This is what we want, this is what we need, this is where we want to go. We want to go there with you. We want to go there with somebody. People aren't listening. Nobody, Bill, is taking the banner of self-service and made it their own as a tech company.
Then, as I dug into the company back to the operational piece, I saw that we were not optimized to really go after this market, so we were sub-optimized in some ways, and then I looked at the balance sheet and I saw we had nearly a billion dollars in cash, and that got me a little excited, and we have an appetite to spend it. I talked to the board. And the board was very much in sync. When you are going through an interview process, they want to know, where is this new guy going to take this thing, right? We want to make sure you are going to take it where we want to go.
I was very clear to the board from day one that the two markets that I wanted to go and take by storm were enterprise data warehousing and self-service, and oh, by the way, I think there is an alignment between those two things.
I come from a company where you created the future by inventing it, not by following others. And I found a board who not only had a compatibility of vision, but was willing to take some risks in terms of bets and investments, because if you are going to be an innovator, if you have a board that doesn't innovate, you can preach from the hilltops and it isn't going to work.
Q: Can we talk about the growth of your customer segments? Which are the faster growing?
A: The fastest growing segment in the company is other self-service outside of ATM, self-checkout being the fastest today, at any kind of revenue volume. I can say airport check-in is the fastest growing business, but you are talking about service versus revenue, and I want to be more specific with you. Other self-service outside of the financial/ATM space is the fastest grower. The second-fastest grower is Teradata inside the company, and the third-fastest grower — if we can say it, hopefully — the achiever is the ATM business and the rest isn't growing. It is mostly declining.
Q: You did not mention relative to your hopes for ATM growth the acquisition of Tidel and perhaps doing more or better with the ISOs. How does that play into your expectations?
A: Pretty good. I haven't mentioned it because I am a relative pragmatist when it comes to operational traction and it is a relatively small business today that has potential. Whether it takes off or not, I don't know. Now we are putting a lot of energy into building an indirect channel around Tidel as opposed to an expensive sales force that's direct in nature selling it. And I'm hopeful that it will rival that of a Tranax or a Triton.
Q: Earlier, I heard you describe NCR as a high-tech company. Would your customers be surprised by that description?
A: Depends on which customer. Teradata customers would not. They would go, yes, you're high tech. Banking customers would be somewhere in the middle. Industrial tech? Nah. Retail customers would be the same as banking customers. ... But your question is a good one. I mean, we talk about this at board level all the time. The fact remains, though, we have to be a high-tech company to be what we want to be in this notion of self-service and data warehousing. We have to move from a point product company to a solutions company, and from a hardware company to a software company over time. That's the business model change that needs to happen at NCR.
