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Heidelberg's new approAch

Got hope lost by saying goodbye to CDO Dr. Ulrich Hermann? I do not think so!

By Andreas Weber 

If you take a look at social media, it quickly becomes clear that the global printing industry is affected by Heidelberger Druckmaschinen AG. Everyone was and is surprised. First about the departure of CFO Dirk Kalibe in summer 2019, then in autumn of supervisory board chief Siegfried Jaschinski and CTO Stephan Plenz. And now at Heidelberg Dr. Ulrich Hermann as Chief Digital Officer at the end of the fiscal year on March 31, 2020.  

Does this make the chaos or even the decline perfect? Well: as is known, the revolution eats its children. Nevertheless, there are so many things on the way that can hardly be stopped. 

The fact is: Heidelberg is more innovative than ever before. The digital transformation is having an impact. And is highly valued both inside and outside the printing industry. This is because the company was able to take a leading role in digital innovations, which has taken on a leading role in corporate circles, in science and research, as well as in the innovation sector, and is well respected. 

It is also a fact: The clever and comprehensive analysis of the industry and thus the situation at Heidelberg, which Dr. Ulrich Hermann bases his activities over the past three years is quite unique, on a world class level! Although painful at times: Printing presses as solid, capital-intensive capital goods no longer pay off in their current form. Neither for Heidelberg nor for its customers. Achieving productivity increases only through improved machine technology does not solve any problems, but scales them in the worst case. Heidelberg is not alone in this: all competitors in the market concern those from Koenig & Bauer, Bobst, HP, Xerox, Ricoh, Canon and many more. And with them tens of thousands of print shops around the world. 

In my opinion, the right thing seems to be: The focus is not just on the printing performance, but on the benefits that can arise from automated printing processes, including real-time monitoring, etc. The more connected, the better! Therefore, the new concepts for Life Cycle Solutions including the subscription models that Dr. Hermann and his teams were able to design and implement, groundbreaking and unquestionably goal-oriented.

The question remains: is Dr. Ulrich Hermann as chief digital officer and 'father' of the Heidelberg subscription model failed or not? An informative discussion was held this morning. 

At a glance — Current interview with Dr. Ulrich Hermann 

"The elected position on the board is absolutely conclusive for the tasks ahead of us." 


What makes you confident that Heidelberg can continue to prosper? 

Dr. Ulrich Hermann: At Heidelberg, I was responsible for everything that happens when the machine is in operation at the customer; i.e. Sales, software, services and consumer goods. Heidelberg already has a turnover of more than one billion euros here – but unlike the machine market, it only has a negligibly small market share. So there is huge potential that, as you know, we are currently tapping into managed services with great success ... 

... and what role do subscription solutions play? 

Dr. Ulrich Hermann: The realignment towards subscription and lifecycle contracts, i.e. in recurring contract business, is now primarily concerned with offers in which Heidelberg grows deeper into customer value creation. 

Seems plausible, but how far have you come with it? 

Dr. Ulrich Hermann: Today everything is firmly anchored in the organization. With the team that I have built over the past three years, including the Heidelberg Digital Unit (HDU), sales are moving towards omni-channel, service towards IoT, IT towards the cloud, software towards Eco System and business model from transactional to recurring business. 

Sounds like a restart. With start-ups, it is important that everyone involved has a smart exit strategy. Although Heidelberg is no longer a start-up, it is undergoing a radical change. So what's behind your planned departure? 

Dr. Ulrich Hermann: What Heidelberg has to focus on is its own i.e. to get "internal" added value in order with regard to depth and breadth. Our CFO announced this in the Q3 report. Our shareholders' assessment of the share price speaks clearly that this focus is needed.

This is exactly where the board of directors must now act. This is usually done under the leadership of the finance director/CFO or the CEO, not a sales executive or CDO, and certainly not from the side. The now chosen position on the board is absolutely conclusive for the tasks ahead of us ... 

… and that means? 

Dr. Ulrich Hermann: I like to play in the field and don't like to wait for the next assignment on the bench. And there are many companies here that are currently tapping their future potential in the field of IoT and are looking for entrepreneurs who can make changes and are knowledgeable. 

What advantages do you see in the new, lean organizational structure? What are the tasks of the new “Executive Committee”? 

Dr. Ulrich Hermann: With the Executive Committee, the most important functional areas are now filled with operational decision-makers below the Executive Board. Heidelberg has top-class people with a lot of expertise and leadership experience. With clear rules, things are now going faster and that is what is in demand today: speed in implementation, the simplest conceivable structure on the board and the focus on the board on the structural adjustment of internal value creation. 

What was the most exciting or astonishing thing for you in the more than three years at Heidelberg? 

Dr. Ulrich Hermann: Heidelberg is not generally known [read: beyond the borders of the print industry] as a market and quality leader. The Heidelberg build by far the best machine. – If I have to highlight one thing that still amazed me, it is Heidelberg's IoT capabilities. 

What are your plans after leaving? And: are you coming to #drupa2020? 

Dr. Ulrich Hermann: Of course I'll be at Drupa. It shows what I helped to create. I don't have any plans yet – but as you can imagine, lots of ideas! 

My conclusion 

Things are going much better at Heidelberg than it looks at first glance. The new strategy is in place. Now it has to be implemented correctly. The course has been set for this!
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