June 23, 2008
Intergraph 2008 Report – Focus on Process, Power, Marine (PPM)
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Susan Smith - Managing Editor

by Susan Smith - Managing Editor
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Industry News

Intergraph 2008 Report – Focus on Process, Power, Marine (PPM)

By Susan Smith

Caesar’s Palace, Las Vegas, Nevada was the setting for the Intergraph 2008 conference June 2-5. Intergraph President and CEO R. Halsey Wise delivered the opening keynote address in the Coliseum, the venue for both Elton John and Cher and many other shining stars. Wise made the comment, why did Elton John and Cher bookend their performances around the Intergraph conference?

Halsey Wise, Chairman, President and CEO, Intergraph

Halsey Wise, Chairman, President and CEO, Intergraph

He joked that they came without a Power Point projector which they borrowed from Intergraph, and in exchange took John’s red piano off the stage.

The largest Intergraph conference to date drew over 2,500 attendees from over 60 countries. Wise pointed out that 50% of revenue comes from customers outside the U.S.

The theme of the conference, “Experience the Power” was a thread that wove its way through all the keynote presentations. Intergraph’s industry divisions are divided into Security, Government & Infrastructure and Process, Power & Marine. For the purpose of this report, we will address Security, Government & Infrastructure.

Wise said that Intergraph customers do work that changes the world we live in. Based on feedback from customers and users, Intergraph meets their request for an opportunity for structured networking. Customers are united to achieve common goals. Wise added that great people make great companies.

Cautioning against organizational contentment, Wise said that the status quo wants things to stay the same, and we must always seek good ideas. The ‘way we always do it” is the “pursuit of incrementalism.” He quoted the irascible Tom Peters, business consultant and writer: “Nearly 100% of innovation, from business to politics to life, is inspired not by market analysis, but by people who are supremely pissed off by the way things are.”

The parting message here is we’ve got to keep changing. Change has been a popular topic at this year’s technology conferences, which to me is an indicator of just how important this is to the industry, and to the entire globe.

Wise outlined a framework for business, including five waypoints of change signaling how organizations experience change:

1. status quo, “the way things are.”

2. imbalance to status quo – shock or realization may drive

3. incentive to change – innovation

4. transformation

5. sustained achievement

In the status quo stage there are rewards for saying no. The disruption of the status quo is characterized by a general unease and people unhappy with the way things are. Wise said you need to be prepared for that before it happens. The incentive to change comes with the realization that there is a premium to achieving something better even if it means uncertainty. Transformation occurs when there is organizational freedom to create the future state. Sustained achievement is the reward for risk taking and organizations should remain in perpetual response to this phase.

Wise cited examples of great innovation and change: the City of Las Vegas being one of them. He credited Las Vegas’ openness to change with its success, and said that it has reached sustained achievement phase. Over 5,000 people a month move to Clark County, over 40,000,000 visited Las Vegas in 2007, and 85% of the world’s top hotels are in Vegas.

He noted Lance Armstrong, seven-time winner of the Tour de France and cancer survivor, with his incredible achievement and daring accomplishments.

Lance Armstrong, 7-time winner of Tour de France

Lance Armstrong, 7-time winner of Tour de France

Wise showed graphs of each growth – the growth of Las Vegas, Lance Armstrong’s growth from a healthy cyclist to his cancer diagnosis at the age of 25, tracking his physical and mental battle, and five months after diagnosis, back on the bike, then the seven Tour de France wins. Overall, Wise said his most notable impact on the world is as a philanthropist, founder of the LiveStrong Foundation to help cancer patients.

These examples preceded a graph that outlines Intergraph’s changes since it was founded in 1969. From 1995-2002, Intergraph was in the hardware business, which began to do poorly, the company experienced disruption and exited that business. From 2003 to 2004, Intergraph implemented the “Now, Next, After Next” goals toward innovation, and Wise cites this as the “Now” phase. 2005 to 2007 marked the “Next” transformation period, and 2008 marks “After Next.”

In the Now phase the company developed a vision, mission and culture, strategic plan, goals, and rebranded company,

The Next phase, characterized by transformation, in which the company realigned business, created security government divisions and PPM, and got out of areas they didn’t excel in. At this point Revenue rose 8%,

Where the company is going in the After Next phase. They plan to accelerate revenue growth, take advantage of R&D investments, product market and company expansion, and bold transformation opportunities.

By FYE 2010 Intergraph maintains the goal of reaching $1B revenue, $140 M of R&D in 2010. Their focus is on investment in Asia, India, European Union, energy, oil and gas, utility, security, real estate, land management, and vertical geospatial applications.

The Power of Innovation

Reid French, COO, Intergraph

Reid French, COO, Intergraph

Reid French spoke on “The Power of Innovation.”

French noted that in 1969 Intergraph was providing computer graphics, and also computer aided design software.

He stressed the importance of innovation to the global economy, and that it critical to the success of a software business. In research conducted by Booz, Allen Hamilton (Global Innovation 1000), it was found that 45% of RD spending is in North America, however market growth is greater in China & India. The GDP growth of China is over 11%. Of the new R&D centers that start up over the next five years, ¾ of them will be in China or India.

To most businesses, innovation is elusive, according to French. For one thing, spending more on R&D doesn’t necessarily give you greater returns. So with no correlation between R&D spending and profit growth, innovation remains least consistent and has the least amount of process discipline applied to it.

Creativity, which drives innovation, depends on intelligence but also depends on creative ability that can be learned.

How do you engineer process to get innovation results? Booz Allen Hamilton found out that how often company worked with customers on R&D made a significant difference to innovation results.

French wove Intergraph back into the talk with noting Intergraph’s innovation: in Security Government and Infrastructure the company was first in the world to integrate sensor data into their dispatch solution, he said, which became part of their critical infrastructure protection system.

For Utilities and Communications the operations center for SmartGrid technology improves the efficiency of the electrical grid. Intergraph solutions provide improved situational awareness and power restoration. They are working on green initiatives, and also working with Siemens and Encore.

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