Oil + Gas

Two Become One

Editor’s Note: Mid-2015, Siemens acquired Dresser-Rand and formed the new Dresser-Rand business, wherein Dresser-Rand’s business, together with Siemens’ compressor unit and the related service business, formed a new business within Siemens Power and Gas Division.

We recently interviewed Bruce Bailie, the program manager for the integration of the new Dresser-Rand business.

insights: What were the integration managers’ initial roles?

BB: The integration managers comprised senior leaders from both companies with the knowledge, insight and experience to mentor and guide a team to architect the new business. They defined a compelling vision of the business that Siemens wanted to form and then developed a detailed and robust master plan to achieve that vision. They assembled an integration team consisting of top functional and business leaders from both companies. The team developed the integration master plan to ensure the resultant business was founded on the “best-of-the-best” from either company.

insights: What were the differences for the integration team before and after the deal closed?

BB: Before the deal closed the effort was all about strategy and planning. This phase was quite challenging in an environment where we could not freely share information because Dresser-Rand and Siemens were still competitors. Once the deal closed there was tremendous urgency and the focus immediately centered on execution. We changed the structure of the integration team to reflect the project deployment phase. The integration managers moved on to the executive staff of the new business. One of the integration managers, Chris Rossi, became CEO of the Dresser-Rand business. The integration project leadership was transferred to Christian Gerbaulet and me.

insights: What is your role, as program manager, following closing?

BB: To best serve our clients, we must avoid disrupting ongoing business and quickly move to our new business model. The program manager is a bit like a conductor for the integration process and teams and ensures that all 26 work streams (or project teams) are coordinated in their activities and schedules. Managing risk and rapidly identifying and escalating issues is critical to success. Good communication is essential, as is ensuring constant, reliable communication at all levels. It’s also important to understand how any changes in business decisions, such as consolidating legal entities, might impact the overall integration master plan.

insights: How long does an integration team typically remain in place post-close with an acquisition of this magnitude?

BB: It really depends on the type of acquisition and the strategy for the new business. Our integration work is expected to run two years post-close, but a number of work streams will complete their work within the first year. Some functions take longer because of the integration complexity, such as information technology and finance. The bottom line is to maintain top-notch service to our clients so as to not interrupt their businesses during the integration.

That’s one of the primary reasons our executive vice president of Services Worldwide for the Dresser-Rand business, Luciano Mozzato, formed a Client Experience Council. This worldwide team of carefully selected, cross-functional Dresser-Rand business personnel provides recommendations and a strategic roadmap that deliver on our vision to earn client loyalty for life.

insights: What, in your opinion, is the most important aspect of integration success?

BB: Good communications. We must share what needs to be done, and why it needs to be done. Then the teams figure out how to accomplish their tasks. Understanding the rationale for the plan helps keep everyone aligned.

insights: What do you feel was the biggest challenge so far? And what went particularly well?

BB: Prior to final closing, we were not able to share the level of detailed information needed to make decisions for the path forward. Dresser-Rand and Siemens were still competitors and neither of us could share anything that could give either company a competitive advantage. Once the transaction closed, we had to quickly confirm assumptions made and validate the related decisions.

As far as what went well, we held welcome events at facilities all over the world that were especially well received. Employees of the combined business had the opportunity to meet one another, hear our leaders’ visions for the new business and ask questions.

Also, the work stream structure mostly worked to perfection. Each of the 26 work streams had their own sub-projects, which allowed them to focus on their own areas of business. And having smaller sub-projects enabled the projects to run efficiently.

insights: Have you seen any synergies between the two organizations?

BB: Realized synergies thus far have exceeded our expectations. For example, a Louisiana pipeline company requested an overhaul of its legacy Siemens compressor and needed spare parts inspected and refurbished. Dresser-Rand had an existing master service agreement with the client and an excellent working relationship and rapidly responded. This relationship, coupled with Siemens’ strong technical background on the equipment, translated into the overhaul of four legacy compressors.

In another example, a pulp and paper plant in Indonesia damaged the inlet valve body of its Siemens legacy steam turbine. Siemens experts offered to balance the rotor to prevent potential issues during start-up; however, the client could not afford the approximately $1 million in production losses if the unit had to be shipped elsewhere for repair. Dresser-Rand’s Indonesian repair center field service team in Cilegon developed a comprehensive service plan and was able to perform the work on site.

Earlier last year, Siemens signed an 18-year long-term service agreement with a firm in the United Arab Emirates. Under the agreement, the new business will now provide service and maintenance for nine Trent 60 aero-derivative gas turbines and nine Dresser-Rand centrifugal compressors.

insights: Are there any last words of wisdom about the integration to-date?

BB: We all need to have open minds and work together with a positive spirit to build our future around the mainstay of our business – earning our clients’ loyalty for life.

Tags: Integration, Siemens

other articles from insights issue Winter 2015 / 2016