Siemens Medical transforms U.S. operationsto provide a single point of contact

October 23, 2002

Formal announcement goes out to customers Oct. 21The many faces of Siemens Medical Solutions are morphing into one per customer, at least in the U.S. Siemens' sales and support efforts‹commonly handled by several people

Formal announcement goes out to customers Oct. 21

The many faces of Siemens Medical Solutions are morphing into one per customer, at least in the U.S. Siemens' sales and support efforts‹commonly handled by several people representing individual modalities and services‹are being consolidated into a single point of contact. This contact will manage all aspects of customer relations for medical equipment, IT, and services, and will be responsible for helping customers solve business issues.

The goal is to bring all of Siemens' resources together to better serve the company's customer. This newfound integration should provide the basis for seamless solutions, as the company's different modalities, IT, and service departments work together, according to Siemens president and CEO for U.S. operations Tom McCausland. Siemens strategists are framing the move as more of a transformation than reorganization.

"It is a subtle difference," McCausland said. "But really we are just reformatting the way we approach the customer."

The need for this reorganization goes back to Siemens' acquisition of Shared Medical Systems in June 2000. The $2 billion purchase instantly turned Siemens into a major provider of healthcare information systems and networking services. It added some 5000 healthcare customers in 20 countries and a separate infrastructure to handle sales, service, and logistics. Some shuffling of executives took place after the deal closed but for the most part, SMS continued to function much as it had before, drawing largely from homegrown resources.

Siemens operations grew more complex later that year when the company acquired ultrasound pioneer Acuson, which until then had been a fiercely independent single modality provider. Like SMS, the new Siemens subsidiary maintained its own infrastructure.

The reorganization, which has been in place since Oct. 1 and was announced in letters to customers Oct. 21, changes all that. The sales and service of all Siemens modalities and IT in the U.S. are merged into a single operation, McCausland said.

"By pulling this all together we can leverage the modality, medical equipment, and IT sides together and approach the customer as a united Siemens," he said.

Customers will probably notice very little change. The same personnel will perform the usual duties, McCausland said. But instead of having to contact several managers for different product lines, customers will have the opportunity to work through just one. And that will make a big difference.

"The customers will have someone who really cares about them from a strategic point of view, as well as a product point of view," McCausland said.

Despite the reorganization, customers can continue to do business with Siemens as they have in the past, if they choose. They can utilize current contacts rather than go to the new single point of contact.

"It is really up to the customer," McCausland said. "We will do business the way they want us to do business, not the way we decide."

The responsibility for business success, however, will still rest with the newly appointed contacts. If customers continue working through traditional channels, those discussions will be relayed to the person in charge of the account, thereby ensuring that at least one person will know all that is going on with that customer, according to McCausland.

This philosophy of centralized control goes all the way to the top. As part of the reorganization, McCausland has consolidated control over all U.S. sales, service, and logistic activities, including those of Acuson and Shared Medical Systems. The realignment should better leverage and prioritize Siemens resources, he said.

"With this we no longer have to coordinate across three different companies how to approach a customer," he said. "My organization and management team is directly responsible for putting together the entire package for the customer."

Customers are asking for solutions to broad-based business problems, he said. They have shortages of personnel and capital. They are being pressured by government regulations and the need to improve patient outcomes, rein in healthcare costs, and meet increasing demands from patients who have been empowered by Internet access to information.

"The answers they need are not found by buying a piece of equipment," he said. "They come from managing the processes involved with healthcare from prevention to rehabilitation. They require improved quality and lower costs."

Planning for the Siemens transformation began in December. Over the past 10 months, strategists refined Siemens' corporate structure into a single sales, service, and product fulfillment organization in the U.S.

Working on the project with McCausland were Erich R. Reinhardt, president and CEO of Siemens Medical Solutions, Francis Lavelle, president and CEO of Shared Medical Systems, and John Pavlidis, president of the Siemens ultrasound division. The system they devised comprises two parts. One is a generalized customer focus unit, the Enterprise Group, which is being directed by Steve Shihadeh, senior vice president, enterprise sales. His staff has overall responsibility for individual customers. A single account manager, for example, acting as part of this group, is assigned to a client such as Cleveland Clinic. This person is responsible for all Siemens medical equipment, IT, and service at that site.

The second group is composed of individual product and systems staff, essentially product specialists directed by Gordon Rice, senior vice president of clinical and systems sales. This staff supports the Enterprise Group with individual solutions for product and service sales.

The transformation to this system will benefit Siemens and customers alike, according to McCausland.

"Customers won't have to sort through the complexity of our organization to understand what they need from us," he said. "And we can put together a very coordinated effort to meet their needs."