Letter - HPO

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Letter - HPO

HPO Business Design as an Enabler for

Lasting Performance Enhancement

While the business strategy answers the question What, the business design

answers the question How. A business design that is harmonized with the

strategy creates a business with minimal complexity and maximum flexibilitya

prerequisite for lasting profitability!

Unclear assignment of responsibility for client

segments, complicated and defective work flows

in sales and product delivery, inefficient and costly

redundancies – it is often the wrong business

design that prevents a business from getting off

the ground.

This does not have to be the case!

High performance organizations have a business

design at their command that sets them apart

through:

� continuous responsibility for specific business

processes

� clear order-supply relationship (internal and

external) and correspondingly defined

interfaces

� a structural organization which is derived

directly from the business process model and in

which process- and hierarchical responsibility

are identical.

Starting from a clear strategic objective, the

business design allows the development of a clear

and, for those affected, understandable

methodology.

In doing so, the principle „from crude to detailed“

is accommodated. In this way it is possible to

optimize individual areas without disregarding

those levers best suited for performance

enhancement .

The results of a good business design are:

� Substantial improvements in efficiency while

minimizing risk – through clearly defined and

markedly simplified processes and structures

� Increased transparency of the business

situation – through a few, significant

performance indicators

� Increase in scalability during order

fluctuations – through increased flexibility.

HPO is specialized in the creation of high

performance organizations. On the following

pages we present PubliPresse and ACS

Transport Revenue as two examples of the

formation of successful business designs.

NewsiÉííÉê

4 / 2006

Dr. Oliver Kohler

Managing Partner HPO AG

Dr. Bruno Glaus

Managing Partner HPO AG

«Lasting performance

enhancement and with it the

long-term securing of

competitive advantages can

only be attained when an

organization has the right

business designs. That is

what sets high performance

organizations apart.»


Edi Medilanski

Senior Consultant HPO AG

«In a comprehensive and

methodical approach, existing

ideas were taken up and

integrated in the development

of an optimal business design

for PubliPresse. The close

and collegial cooperation

between client and consultant

was critical for the success of

the project. »

PubliPresse

Market Offering

Promotion, sales, and

brokerage of press- and

internal classifieds and

accompanying services.

Financial 2005

1'480 M. CHF Revenue

16 M. EBIT,

Employees

Ca. 1'350

Location

Headquarters Lausanne

Four legal entities:

Publicitas (100 points of

sale), Publimedia, Mosse

Media (Zürich), Publimag

(Opfikon)

High Performance Organisation

PubliPresse

The increasingly competitive situation in the newspaper advertisement

market in Switzerland demands a fundamental redesign of the PubliPresse

business process model. In a comprehensive project the organization

developed – methodically supported by HPO AG – a new business process

model.

Starting Point

The changes in the Swiss media- and press

landscape have had a lasting effect on

PubliPresse’s advertisement sales. Falling

subscriber numbers and the simultaneous

reduction of advertising budgets in many

companies has made a dramatic change in the

functioning of the organization necessary.

Multiple rounds of cost cutting without regard to

the individual problems in different

organizational units showed no adequate,

lasting effect and these measures were being

increasingly met with employee opposition.

Goal

The demands of the investors and the

customers – publishers as well as subscribers –

should be accommodated with a new business

process model.

Specific goals were:

� Increase in the EBIT-margin by multiple

percentage points

� Fulfillment of the increased service demand

� Sustained high quality service

Mind

• Set up of the value

proposition

according to the

service catalogue

• Analysis of price

versus service

• Identification of the

complexity drivers

Map

• Analysis of current

processes

• Compilation of

ideal business

processes

• Definition of

competence and

responsibility in

process

Master

• Introduction of a

separation of

service definition

and provision

• Derivation of value

creation from

competences

• Definition of

important

interfaces

Approach

From the onset, the set goals made a

fundamental questioning of the current

business model necessary. Consequently, a

macro model was created using the HPOmethodology

5M © (Figure 1) and further

detailing in preparation for implementation was

finalized.

In a second project phase, in conjunction with

the affected employees, a micro model was

developed in which the business processes

were checked in detail for feasibility and

corresponding demands on personnel and

material resources were defined.

Project Outcome (in implementation)

� Optimized business processes described in

detail

� Clean interfaces defined to single entry

fields

� Necessary IT-adjustments documented

� Employee commitment secured

� Implementation plan and task packages for

the attainment of efficiency improvement are

defined

� Project controlling initiated

� PubliPresse

Match

Merge

• Development of a

minimal number of

process variations

• Definition of

distinctive process

steps

• Agreement within

the business

leadership on the

process model

Figure 1:

Steps in the development of a new business model – individual application of 5M ©

• Development of

an ideal, process

oriented

organizational

structure

• Adjustment to

enterprise-specific

contraints


ACS Transport Revenue: On the Path to

Lasting Success, Thanks to a

Comprehensive New Business Design

The formerly deficient business of the Division Transport Revenue (in

former times a member of the Ascom Group) demanded fundamentally new

business processes. Together with HPO a model was developed and

globally implemented, which is based on the particularities of project delivery

business. Today, Transport Revenue counts as one of the profitable and

fast growing providers of the industry and belongs, since the end of 2005, to

the “fortune 500” group ACS (Affiliated Computer Services, Inc.).

Starting Point

Basically, the market environment for solutions

and services in the fare collection and parking

solutions industry has distinguished itself

through moderate but stable growth. In the

past, Transport Revenue was not able to take

advantage of this environment. The EBIT

earned was in the negative for some years

running. Some of the reasons for this were:

� Solutions were sold without ever having

been realized anywhere else

� The time demands and resources needed

to implement the projects were

underestimated

� The acceptance of unreasonable

contractual conditions such as unlimited

liability.

The newly appointed TR-Management

breathed life into the 2001 project “Mission

Possible“ and engaged HPO to support the

development of a comprehensive new

business process model as a measure to

manage the necessary turnaround.

Other measures included:

� The closing of high loss client

projects. (Bosses as crisis management)

� The development of profitable business

segments

� The build up of a work in progress on the

basis of standardized components and new

processes.

Goal

Already at the start of the project, HPO along

with the TR-Management agreed upon an

ambitious but realistic financial targeting for the

project: A sustainable return to profitability

within 18 months.

Implementation and Success

In order to reach this goal, the entire

undertaking was organized into a manageable

number of compact work packages. These

were finalized in interdisciplinary workshops

with the inclusion of all the relevant locations.

In this process a very important role was the

development of a strategy compliant business

process model. This model distinguishes itself

through:

� An integrated sales process (from lead

generation to after sales)

� Clear-cut milestones in the pre-sales phase

und the project execution phase

� The global consolidation of the supply chain

� The creation of competence centers for the

development of components and software

platforms.

The new business process model and the

process based organizational form derived

from this model provided significant leverage in

the improvement of the cost structures and in

the systematic development of existing market

potential. Thanks to the early involvement of

key figures from all regions, opposition was

identified in time and could be dispelled. In

2003, the EBIT-targets which had been defined

were surpassed and are growing today faster

than the market.

Martin Stecher

Projektleiter HPO AG

«For HPO the ACS Transport

Revenue is also a success

story, and I think everyone

involved can be proud of the

success of project "Mission

Possible". This was made

possible by the new,

competitive business process

model, which was realized

with a high level of

determination by the

management.»

ACS Transport Revenue

Market Offering

System solutions and

services in the sector Fare

Collection, Toll Collection

und Parking Solutions (fare

collection systems for

public transportation, toll

systems, und solutions for

Parking lot administration)

Financial 2005

231 M. CHF Revenue

25 M. EBIT,

Employees

Ca. 800

Locations

Four Operation Centers in

CH, F, USA, global salesund

service network


Otto Meier

Chief Executive Officer (CEO)

PubliPresse AG

Riet Cadonau

Chief Executive Officer (CEO)

ACS Transport Revenue

HPO AG

Kantonsstrasse 14

CH - 8807 Freienbach

Tel +41 (44) 787 6000

Fax +41 (44) 787 6060

welcome@hpo.ch

www.hpo.ch

Working Profitably for Our Clients with a High

Performance Organization

«The demands on our services with regard to

scope and specificity have increased significantly

over the last few years. At the same time we

continue to feel obligated to provide quality and

dependability to our publishers as well as to our

customers. In the future, we want to remain the

benchmark within the newspaper advertising

market.

In addition to this, the share and stake holders

within the PubliPresse Group should be kept

satisfied with pleasing financial results. With the

creation of a high performance organization we

would like these diverse, sometimes even

contradictory, demands to be structured and

linked.

The name, by the way, was consciously

chosen in order to set a clear example inside

and outside the organization .

The inclusion of the external consultants HPO

as methodology provider and project manager

had a very positive effect on our plans. Without

this methodically founded approach we would

probably have achieved inferior results. Our

ambitious expectations with regard to goal

attainment were clearly surpassed.»

Primed for the Future with a Competitive Business

Process Model

«Thanks to our competent, dedicated

employees and our comprehensive and highly

available solution services offering, clients the

world over continue to trust us. That is the

basis for above-average growth rates. The

turnaround has proved itself to be lasting – this

shows in our results from 2003-2005. The

determined changes that took place in 2002

and 2003 were far-reaching, but important for

the foundation of today’s competitiveness. One

of these changes was the concept of working in

defined processes.

Otto Meier

HPO effectively supported us in the realization

of this process management. HPO was thereby

able to make a vital contribution to this success

story.»

Riet Cadonau

Our Name is Program:

We are Management Consultants for High Performance Companies.

High performance begins with a consistent strategy. Together, we will develop or assess your

strategy.

We will implement your strategy and promote lasting improvements in your results by multiple EBIT

points. The value we add exceeds our costs by at least a factor of ten.

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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