Ingram Euro chief: UK will benefit from reorg

Gerhard Schultz said ‘great growth momentum' of UK arm will continue as distributor sets out to save ‘double-digit millions' in 2014

The UK will emerge as one of the winning territories in Ingram Micro’s most recent rejig, the distribution behemoth’s European boss has claimed.

As reported on ChannelWeb earlier today, Ingram Micro is moving to a new operating model across Europe as it looks to increase competitiveness and wrestle more market share away from local players in each territory.

In a move the distributor has admitted will cost jobs, the firm is planning to "transform its current European organisation into a consistent pan-European operating model".

Speaking to CRN, Gerhard Schultz (pictured), senior executive vice president and president of Ingram Micro Europe, said: “If you look at the market, there are lots of changes going on such as PCs being replaced by tablets, on-premise to off-premise, the consolidation of the telco with the IT industry.

“But if you look at how Ingram has been operating so far, it has been operating as a collection of country organisations, all with their own go-to-market strategy. The market is consolidating on one hand, and creating new opportunity on the other hand. We need to make the effort to strive for a leadership position and we are making this move in response to the market opportunity.”

Under the changes, which will be completed in 2014, Schultz explained, business support functions such as HR, finance, information systems and operations will be centrally managed; and warehousing facilities in Germany and Benelux are to be consolidated, as will transactional support, as the company plans to expand the use of its Shared Service Centre in Sofia, Bulgaria.

“The marriage of these functions will become more profitable [for Ingram Micro] and harmonised, and we will have cheaper labour than in western Europe,” he said, adding that the firm plans to double its Sofia headcount from 250 to 500, as the corresponding roles are “carved out” from territories across Europe.

In addition, management support functions from its European headquarters in Belgium will be "gradually transferred" to various country-based and global competence centers, with the Dutch arm housing the European finance competence centre and Germany the Advanced Solutions business. The French office will assume responsibility for managing certain European vendor management roles.

“We will have the same go-to-market model in each country and have central functions located at larger operating entities,” Schultz said. “This will allow us to enter new business segments and replicate them in Europe. If one country is successful in one particular area, we can replicate it very easily in other territories. It helps make things more comparable and will result in double-digit million-dollar benefits for the company,” he said.

As well as yielding savings, Schultz added, the move will make Ingram a more “diversified organisation,” with the “managing director [of each country] not having to worry about backroom functions any more”.

“That way they can dedicate their efforts to achieving market leadership,” he said. “He [the managing director] will not have to worry about the books, he will worry about capturing a profitable share position and will benefit from the collective knowledge of the group.”

Looking at the UK, Schultz said the country was in a strong position.

“In the UK there will be backroom jobs which will be offshored, but the UK has great growth momentum and it has re-architected the organisation and at the same time is looking to hire around 30 people. We are strengthening its position," he explained.

“We are going to invest [in the UK] to broaden reach and portfolio compared with other countries that have created lots of resources and done much less with them. It is going to be about adjustments.”