Ameritech Library Services has announced a major initiative to realign resources and concentrate on the development, delivery, and support of library software and network solutions. The company intends to expand strategic alliances with leading hardware, software, and database providers, while taking further advantage of Ameritech Corporation's expertise in networking and systems integration. As part of the transition, company functions will be consolidated, resulting in layoffs of approximately 150 employees-some 15 percent of the current filled and vacant positions. (Rumors which have circulated on the Internet of a 40 percent staff reduction are unfounded.)
There are several aspects to the realignment. The following six announced actions are illustrative of the changes being put in place:
(1) ALS will stop offering a wide range of hardware platforms-a practice which kept costs high because staff specialists were required for each and margins were slim for hardware purchased in small quantities. In the future, ALS will bid Hewlett-Packard hardware in almost all cases. The choice is a good one because HP consistently receives the highest ratings in the computer industry for quality and product support. Several competitors made the decision to limit their offering to a single hardware line several years ago and have found it to be an excellent policy.
"ALS will now be able to concentrate and expand on what it does best--delivering software solutions that meet the automation and networking requirements of the library community worldwide," said Roger Sloan, acting chief operating officer in a press release issued by ALS.
Customers with Digital, IBM, Sequent, and other hardware platforms will continue to be supported, and will continue to have hardware upgrades made available to them, but new customers will be quoted configurations based on HP hardware. While it will take several years for ALS to realize the full benefit of the decision, it will be able to reduce the number of specialists in each of several hardware platforms beginning immediately.
(2) Configuration, shipping, and installation of hardware will be undertaken by an outside company, Compucom, a billion dollar firm which specializes in these tasks. While ALS staff will work closely with Compucom on configuration, it will be able to reduce the number of hardware specialists on its payroll. ALS will continue to assume liability for overall system performance whenever it sells a "turnkey" system.
(3) ALS will no longer sell small standalone Scholar systems to individual school libraries. Instead, it will sell larger systems at the district level using Scholar software. With the type of postsale support which ALS has provided with its products, it has not been cost effective to sell very small systems. While the existing small sites will continue to be supported, the company will be able to reduce staff in the Scholar division immediately.
(4) Staffing will be reduced at RetroLink Associates because the division has had spare capacity for a number of months.
(5) Some support activities in the areas of accounting and human resources will be transferred to Ameritech Corporation, the parent company, thus reducing the number of persons required for those functions at ALS.
(6) Network specialists in other areas of Ameritech Corporation will be tapped when complex networks have to be designed. The company already did this in designing the complex network required by the Hawaii State Library.
These announced actions should help the company's bottom line while maintaining its overall competitive position. In our opinion, these steps are necessary and somewhat overdue. ALS has been profitable, but considerably less so than many of its competitors that have gross revenues of one-fourth to one-half those of ALS. Rather than increasing prices and becoming less competitive, the company opted to reduce its expenses.
ALS has continued to sell--at a profit--one out of every five library systems worldwide-a market share more than double that of any other company. Among the 150 libraries which have selected ALS products within the past six months are the Hawaii State Library, Ministry of Education of Bermuda, BBC Research and Development (U.K.), O'Melveny & Myers Law Library, P.E.I. Provincial Library System (Canada), Onandaga County Public Library, Shanghai City Library (China), University of Tasmania, the Utah Academic Library Consortium, University of Tennessee, and Trinity College (Australia).
While concurring with its "realignment of resources," we are very much concerned about a disturbing personnel trend at ALS"-almost all of the appointments to high-level positions within the company in the past two years have been of people with no specific experience in library automation or the library automation market. While the credentials of all of those appointed have been excellent and the people we have met very impressive, nonetheless we are concerned that what they know about libraries and librarians is mostly secondhand. As consultants, we have learned that to rely solely on what we have been told is risky. It is necessary to evaluate what we are told based on personal experience in and with libraries. We hope that ALS will reverse this trend by making future key appointments to persons who have had a decade or more of experience in libraries and/or library automation.
[Contact: Ameritech Library Services, 400 Dynix Drive, Provo, UT 84604; 801-223-5200 or 800-288-8020; Fax 801-223-5202; www.amlibs.com.]
