I believe that the sales plan has stayed the same concerning margin. That split is 70% Revenue, 30% Margin. This plan is changed to the opposite, 30% Rev. 70% Margin for the managers who manage the sales people, therefore providing checks and balances. The plus side of this is that you are paid 30% of your compensation up front at order signing, which is a significant change.
My belief with the decrease in operating income and revenue is largely due to the communications industry in NCR and the split off from AT&T and Lucent. If you take 1996, the Communication Industry which included AT&T and Lucent provided approximately $750,000,000 to the bottom line in revenue with around a 33% Gross Margin. During this time AT&T and Lucent were buying like crazy to bolster the financial state of NCR. After trivestiture during 1997, The Communications industry only saw about $350,000,000 with most of the drop coming from AT&T due to their cost restructuring. But absolutely, without a doubt, AT&T and Lucent did not buy as much from NCR because they no longer had to. This trend will most likely continue, although Lucent is doing some significant business worldwide with NCR in the area of Professional Services and Outsourcing.
If you add $400,000,000 Rev with 33% Gross Margin to the 1997 bottom line. NCR would be kicking ass!!! I don't understand why the analysts have not caught onto this as of yet, but this is where I truly see the problem. I think the Communication industry is reaching a flattening out point at $300,000,000 this year. But think about it, without Communication Industry Numbers in '96 and '97 results, NCR would definitely be showing an improvement. I would like to hear comments on this post.
Thanks,
Mister T. |
