On December 17, ABB announced it plans a simplification of its business model and structure through the discontinuation of its legacy matrix structure in favour of running its businesses with customer-facing activities, business functions and territories. It also intends to transfer its experienced management resources to strengthen those business arms.
The company will also eliminate its current country and regional structures, including its regional executive committee slots, and focus its corporate activities on group strategy, portfolio and performance management, capital allocation, core technologies and the ABB Ability platform.
ABB said its four leading business lines, which will be aligned with its customer patterns, include electrification; industrial automation; robotics; and discrete automation and motion.
"Based on ABB's common digital platform ABB Ability, the businesses will provide tailored digital solutions, driving enhanced customer value. Building on emerging technologies, including artificial intelligence and its strong software offering, ABB Ability will meet the increasing demand from ABB's customers for digital solutions in the rapidly changing industrial world," the company said.
ABB CEO Ulrich Spiesshofer pointed out that the company has already been driving industrial change for more than a century as a global pioneering technology leader.
"To support our customers in a world of unprecedented technological change and digitalisation, we must focus, simplify and shape our business for leadership," he said, adding that Power Grids will strengthen new owner Hitachi as global leader in energy infrastructure, while the group will in turn strengthen Power Grids' position as a global power grid leader.
"To compete in today's fast-changing world, we fully empower our businesses, through the discontinuation of the legacy matrix structure, ensuring zero-distance to customers and increasing our agility in decision-making. Our four newly shaped businesses, each a global leader, will be well aligned to the way our customers operate and focus stronger on emerging technologies such as artificial intelligence."
The completion of the divestment transaction is expected by first half of 2020, subject to regulatory approvals and closing conditions. The new structure will become effective April 1, 2019.