Realignment Seeks Product/Service Integration
Written by Harrison Donnelly
MIT 2010 Volume: 14 Issue: 1 (February)
With an eye on both improved service to customers and anticipated constraints on defense budgets in the future, ITT has announced a strategic realignment of its defense segment.
The move will better align the company with the emerging needs of its increasingly integrated and network-centric customer base, executives said, and enable better integration of its product portfolio.
“We are positioning ITT to be in a better position than ever to support our customers’ emerging technology needs, while also greatly enhancing our ability to stake out new markets,” said Steve Loranger, ITT chairman, president and chief executive officer. “This move will also allow ITT to achieve greater operating efficiencies and optimize our cost structure, which will help drive successful business strategies for continued top line growth.”
The company’s defense segment will be renamed ITT Defense and Information Solutions, and its current organizational structure of seven separate business units will be consolidated into three larger ones.
The company has been thinking about such changes for some time, explained David Melcher, president of ITT Defense and Information Solutions.
“We’ve looked at the future picture for DoD, and we know that there has been strain on some of the procurement accounts and larger programs,” Melcher said.
“Although the surge into Afghanistan inflating the Pentagon budget somewhat, ultimately budgets are going to be flat or declining. So there’s some pressure, and also competitive pressure as defense companies look for ways to find new business.”
After spending time talking to military and other government customers over the past year, Melcher said, he found that they were all looking for better integrated, more networked solutions. As a result, ITT decided to put together the pieces of the business that have complementary capabilities to address what customers are asking for.
Noting that ITT’s business is roughly 60 percent products and 40 percent services, Melcher explained the thinking behind the reorganization this way: “We have capabilities in ITT on both sides, but the way we were organized did not lend itself easily to making sure we were bringing forth solutions that were not simply a product that plugged into a network somewhere, independent of what needs to be there to make it effective.”
The result is that the company will bring all of its communications teams into the same house with the electronic warfare team, the Electronic Systems division, while offices working on information management, cyber-work, intel fusion and services will be combined in the Information Systems division.
Geospatial Systems, meanwhile, will have the Night Vision and Space Systems divisions. “There is a lot of commonality with what happens with night vision goggles, which are being developed to be digital and networked, and what we do in our space and air-breathing payloads to make sure we do image analysis and provide that capability to the warfighters as part of a network. There are a lot of synergies there as well,” Melcher said.
The realignment established the following divisions:
- The Electronic Systems and Communications Systems divisions, as well as a portion of the Intelligence and Information Warfare division, will be merged to form a more versatile Electronic Systems division, based in Clifton, N.J. This division will deliver advanced protection measures that work together to help customers defend their networks and disable enemy networks.
- The Space Systems and Night Vision divisions will merge to form Geospatial Systems, based in Rochester, N.Y. The new center will focus on providing networked sensors, such as next generation imaging, including space and air sensors, image/infrared/digital sensors and air/ground/ space systems, which transition the company’s capabilities from disparate image acquisition to image processing and distribution across the network.
- The Advanced Electronics and Sciences and the Systems divisions will be combined with a portion of the Intelligence and Information Warfare division to form the Information Systems division, based in Herndon, Va. This division will focus on networked decision support solutions through the combination of large system operations and maintenance capabilities with the sophisticated techniques of information integration and protection.