NCR Corp. kicked off 2008 with the strongest sales in its lengthy history, in part the result of an ongoing transformation plan.
The company's main focus remains financial services and retail, but it has been expanding into other industries in recent years and these diversification efforts have helped it get through this year's recession.
"The challenges we faced have been no different than most companies globally, but for us they were particularly heightened because the two key end markets we serve were going through very disruptive changes," Bill Nuti, NCR's chairman and chief executive, said in an interview. "The good news for NCR is we anticipated this in 2008 and we began making changes."
Those changes amounted to expense reduction, including eliminating some jobs, but Nuti said this was done "using a scalpel and not an ax," leaning primarily toward part-time employees and contractors instead of full-time staff.
The CEO said NCR's biggest improvement actually took place in 2007, when it shed its data storage unit, Teradata Corp.
"We were a company that, prior to our decision to spin off Teradata, was a little bit everywhere and nowhere," Nuti said.
Teradata was a drag on NCR's business, he said. Before the spinoff, "NCR with Teradata inside continuously struggled with resource contention," he said.
Having that internal strife, particularly over research and development budgets, "wreaks havoc in terms of the engineering community and their ability to have consistency in being able to bring products to market," he said.
In early 2008, NCR launched its SelfServ line of automated teller machines, which Nuti said was a major factor in the strong results it reported for the first quarter of that year.
SelfServ "is a platform that is designed for serviceability, easy to service from both a hardware and from a software prospective," he said.
Perhaps more important, it was designed to be future-proof, receiving upgrades in the form of modules, he said. "It was designed for investment protection for our customers."
NCR also moved its headquarters this year to Duluth, Ga., from Dayton, Ohio. Nuti said the company had been considering a move of some kind since long before the Teradata spinoff, as one of several ways to streamline operations and reduce costs.
The plan actually began more than a decade ago, he said.
"We had come out of a 1997 spinoff from AT&T, and had tremendous financial challenges in that timeframe," he said. "The company was struggling up until 2003-2004, where we went on a very significant cost-cutting campaign but weren't able to achieve growth."
(The venerable NCR dates back to 1884, when National Cash Register Co. was founded; the company sold itself to AT&T in 1991.)
NCR realized then that it needed to do more than cut costs: it needed to change the fundamentals of how — and where — the company operated.
"We needed to figure out how we were going to build a great future for this company," he said. "Out of that came the spinoff of Teradata and … knowing at some future point we would need to rethink our headquarters location because of the issue of being so dispersed as a company."
This year, that decision was made, and in June NCR announced it would immediately begin its move to Duluth.
"We worked with several states and negotiated with several states, including the state of Ohio, on what we thought would be the best decision for us," Nuti said. "After about three-to-six months of pretty intensive evaluations, we narrowed down our state count to about five different states, all of which were in the South, that we felt were potential opportunities to relocate not just our headquarters and to build our innovation campus."
As part of its move, NCR said it would be taking its North American ATM manufacturing in-house to a Georgia facility in the fourth quarter. It has been outsourcing this task to a Canadian facility owned by Flextronics International Ltd. since 2007, and NCR said it would continue to use Flextronics to produce less complex machinery, such as kiosks.
NCR chose Georgia because it had a skilled work force to tap into, low corporate taxes and a solid infrastructure, and because it was home to several major NCR clients, Nuti said. It also was home to NCR's retail industry practice and its customer service headquarters, he said.
By moving so many NCR functions to Georgia, Nuti said he expects to shave months off the process of bringing new products to market.
"To be frank, Georgia had somewhat of an advantage, because we actually had more employees in the state of Georgia than we did in Dayton," he said. "We already had a lot of roots in Georgia, and we're now laying down a lot more roots."