Letter - HPO


Letter - HPO

Achieving a successful paradigm shift

with the HPO Innovation Engine

Changing market requirements, increasing competition, and technological

change are forcing companies to radically question conventional

approaches and to introduce dramatic change. This includes changing

from an orientation focused mainly on individual clients, to one focused on

the needs of entire market segments.

A systematic development of new products and

services is often neglected in those industries that

depend heavily on project business. Development

most often takes place within the framework of a

specific client project. In this manner two very

important aspects are overlooked:

� Developments procured within the framework

of a client project are naturally based on the

needs of an individual client, but they are not

based on the needs of a market segment.

� Due to time and cost constraints, solutions are

developed that are optimal for specific clients,

but when these are used as mass producible

solutions they tend to be very difficult to adapt.



Innovation Governance Client

Strategic Marketing

Product Mgmt

Product Development

Product Definition

(HPO Innovation Engine)

Single Client


Client Acquisition

Order Processing


Product Delivery

(HPO Delivery Engine)

Market potential remains unknown with this type of

approach and efficiency improvement potential

(economies of scale, reduction of complexity)

cannot be materialized. The HPO Innovation

Engine makes it possible for firms to systematically

access these potentials. The HPO Innovation

Engine is based on the following principles:

� Process oriented separation of product

definition and product delivery.

� Delineating necessary innovation processes

from the product- and performancearchitectures

of a firm.

� Governing these innovation activities in tight

alignment with corporate strategy.

The implementation of a HPO Innovation Engine is

based on a systematic model. The proven „Top

Down – Bottom up“ approach assures the

commitment of the management and the inclusion

of key employees.

The accompanying graphic shows a general

business process model with dedicated processes

for product definition and product delivery.

With T-Systems und Bachmann electronics we

present to you two corresponding case examples .


2 / 2006

Dr. Oliver Kohler

Managing Partner HPO AG

Martin Stecher

Project Manager HPO AG

«Successful firms know how

to proactively identify future

market needs and to offer

corresponding solutions at

competitive prices. They are

in control of dedicated

processes and structures

that on the one hand,

ensure an efficient handling

of the day‘s business and

on the other hand, secure

an optimization of their

product- market portfolios.»

Hans Nagel

Chief Development Officer

Member of the Business


T-Systems Switzerland

«With the introduction of the

Innovation Engine, T-

Systems Switzerland has

experienced a fundamental

shift away from a business

focused only on the needs

of individual customers, to a

business positioning based

on market segments. Such

a significant change was

only made possible by a

unified and methodical

approach, a great deal of

effort, and the HPO change

management competence.»

T-Systems Switzerland:

Achieving market success through

strength of innovation

T-Systems Switzerland wants to have a clear lead in innovation to confront

an increasingly aggressive and price focused competition. This strategic

orientation demands a switch from a business model that is concentrated

on single clients, to one that is focused on market demands.

Starting Point

As a provider of ICT-services, T-Systems finds

itself among hard competition in Switzerland.

And the intensity of competition continues to

increase. This has led to erosion of margin and

less profitability. As a price battle does not

promise any prospects for success, market

success should be achieved through efficient

processes and clear interfaces, but most

importantly, through a focus on innovation.


Through a well-directed increase in innovation

capability, T-Systems aims to achieve

profitable growth even amongst increasingly

aggressive competition. An innovation machine

with the following objectives was realized

together with HPO:

� Innovation capabilities should be increased

and sustained through a systematization

and simplification of innovation decisionmaking


� A traditional business behavior that is

focused on the individual clients should be

broadened to include entire market


� Flexible, need based solutions should be

offered to the target markets through a

modular product- and service-architecture

that is directed to the needs of the target



Within the framework of a performance checkup,

the innovation activities of T-Systems

Switzerland were analyzed and their

weaknesses were identified. Necessary

processes and interfaces were defined for a

market conforming definition and for further

development of the performance portfolio

based on the market performance architecture.


The corresponding reorganization was derived

from these innovation processes. This takes

into consideration the continual (process)

responsibility and the uniformity of tasks as well

as the optimal design of necessary interfaces.


The new Innovation Engine is a businessprocess-model,

which allows T-Systems

Switzerland to proactively define the

performance portfolio, thereby developing it

further while conforming it to the Swiss market.

The Innovation Engine distinguishes itself by:

� Increasing innovation capabilities through a

process oriented separation in delivery

(realization of a concrete customer order)

and innovation (realization of future market


� Entangling of strategic marketing, product

management, product- and processdevelopment

as well as development and

maintenance of architectures, standards,

and technologies.

� Structuring these activities on the basis of a

market performance architecture in various

innovation areas, which are connected to

one another through innovation


In addition to increasing innovation capacity,

and with that the possibility of achieving

innovation leadership, the Innovation Engine is

also a prerequisite for substantial cost

reduction and an increase in productivity, as

well as an increase in the quality of products

and services .

Bachmann electronic:

More growth through a proactive

reaction to market demands

General stagnation in the market environment, increasing

competitiveness, and the traditional focus on individual clientele have

prompted Bachmann electronic to question what were once recipes for

success, and to introduce a paradigm shift together with HPO.

Starting Point

Due to increasing competition and the resulting

erosion of margin, Gerhard Bachmann, as

owner and manager of Bachmann electronic,

needed to address three very important

questions :

� How can future market demands be

proactively met with innovative solutions?

� How can customer needs be satisfied in a

timely and cost effective manner?

� How can the complexity of market offering be

reasonably limited, thereby creating business

processes that are more controllable?

In order to meet these challenges, Gerdhard

Bachmann found in HPO a partner that

possesses a high level of experience in the

high-tech arena, but a partner that also

understands the needs of a medium-sized



Together an approach suited to the conditions

of a medium-sized firm was chosen with HPO

as a methodology coach and sparring partner

with the goals:

� The creation of clear responsibilities and

competences with an optimization of internal


� The creation of a foundation for further

profitable growth through the establishment

of a product management.

� The Implementation of business processes

based resolutely on market needs.


The chosen, pragmatic approach utilizes the

HPO-Methodology 5M © :

� The determination of future market

performance and market performance


� The derivation of business processes and

interfaces under the premise of necessary

market orientation

� The derivation of process oriented

responsibilities and competences, which

are clearly defined and suited to the

conditions of a medium-sized firm.

� Implementation


Thanks to an approach with a well functioning

role definition between the business leadership

and the consultants, Bachmann electronics

transformed from a traditional business,

oriented towards individual customers, into an

organization focused on markets segments.

The newly created business process model

clearly separates all activities having to do with

a concrete customer (product delivery), and the

defining and producing of new products and

solutions developed independently of individual

clients (product definition).

Working as a crux between market needs and

development, the newly established product

management takes on a decisive roll in the

product definition.

Last year Bachmann electronic was able to

surpass growth targets and to win further

market share within the target segments .

Jürgen Duelli


Bachmann electronic

«The integrated HPO

approach, the commitment

of the experienced HPO

team, and finally the

successful empowerment of

our key employees has led

to an actual change in the

way we do business.»

Gregor Stücheli


T-Systems Switzerland

Gerhard Bachmann


Bachmann electronic


Kantonsstrasse 14

CH - 8807 Freienbach

Tel +41 (44) 787 6000

Fax +41 (44) 787 6060



Laying the foundations for profitable growth by

creating innovation strength with HPO

«It is the explicit goal of T-Systems Switzerland

to create profitable growth in an aggressive,

price conscious ICT-services market through

the persistent strengthening of its innovation


The HPO concept of clear separation of value

defining and value creating activities and the

distinct assignment of duties, responsibilities,

and competences within the framework of the

‚Innovation Engine‘ allowed for a fundamental

change in the way we do business.

As coach and methodology provider, HPO

understood the importance of highlighting

where the substantial optimization levers.

Our Name is Program:

We are Management Consultants for

High Performance Organizations

Through the inclusion of key employees at all

levels, HPO succeeded in initiating a change

process. At the same time the foundations

were created on which mutually achieved

results and corresponding concepts could be


The implementation of the ‚Innovation Engine‘

is almost complete and the first successes in

the market have already been achieved.»

Creating a basis for further successful business

development with HPO

«The firm Bachmann electronic has undergone

a great deal of change within the last 3 years.

Together with HPO we have introduced a

paradigm shift, which takes us away from a

traditional focus on individual clients, to a

stronger market orientation.

Today we are proactively working on single

market segments, and we can identify future

market needs early and translate this

information into new products.

Gregor Stücheli

The partnership with our clients is still the focus

of our attention, but our goal today is to utilize

our standard products and solutions while

keeping the „Customizing“ to a minimum.

We found in HPO a partner that possesses a

high level of expertise in the international hightech

arena, but we also found one that

understands the needs of a medium-sized


Gerhard Bachmann

We promote lasting improvements in your results by multiple EBIT points. We accept performance

based fees. And we have good reason to, because we will improve your performance with our

own proven methodology. Step by step. To success.

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