T-Systems, the IT arm of Deutsche Telekom, has announced a restructuring of its business areas in response to the increasing usage of cloud services by its corporate customers.
From 2013 onwards, the company is to reduce the number of so-called ‘operative business areas’ from four to two, with Hagen Rickmann leading the sales area and Ferri Abolhassan in charge of delivery.
Rickmann has been head of service for T-Systems since March 2011, while Abolhassan is currently in charge of systems integration and the global production of ICT services.
T-Systems is also to cut its executive committee from eight members to six, with Dietmar Wendt, the former sales director, and Ulrich Meister, the previous director of systems integration, both set to leave the company at the end of the year.
Reinhard Clemens, T-Systems’ chief executive, said the men were leaving the company “at their own request and by mutual agreement”.
No other staff reductions have yet been announced, with T-Systems saying that “all resulting organizational adjustments at employee level still need to be approved by the employee representatives.”
“We will begin the negotiations on all issues subject to co-determination at the start of the new year,” said Clemens.
The restructuring announcement came on the back of news that T-Systems had extended its contract for worldwide hosting and storage services with oil giant Shell by another five years.
Clemens cites the Shell deal as a “good example” of the type of work that has forced T-Systems to make changes.
“The time has now come for us to part with business processes that are still based on old outsourcing models,” he said. “Instead we will integrate our processes to support the cloud.”
According to Clemens, the sales area will in future include all closely related activities, from marketing to portfolio management, while delivery will cover technical consulting, systems integration and infrastructure.
“By streamlining our structures and processes for the cloud, we’re paving way for further growth in 2013,” said Clemens.
Revenue from the ‘Systems Solutions’ unit run by Deutsche Telekom (Bonn, Germany) fell by 10.7% last quarter, to €2.25 billion, compared with the corresponding period of 2011.
The decrease was blamed partly on price-based competition in the weak economic environment, but Deutsche Telekom also noted that smaller, cloud-based deals – which generate less upfront revenue than more traditional arrangements – were having some impact on its results.