avantum consult
Corporate performance management

A major challenge for managers is how to use the information already within their organisations for their decision-making needs. In addition, information systems of companies often have a disparate mix of technologies and 'unique' ways of gathering and analysing corporate data. This not only creates inconsistencies but also gaps in the information flow. As operations get more international, even mid-sized companies cannot afford to live with the limitations of such a system. Organisations stumble not because of what they can see, but because of what is hidden from view. The situation can easily become a nightmare if the company has problems assessing its markets, customers and future profitability or if inconsistencies in financial statements emerge. The resulting chaos can distract even the best management teams from running their business effectively.

To eliminate the gap between the information an enterprise needs and how it is made available and accessed, IT consultants have developed applications and technologies to enable companies to organise and analyse the different metrics needed for corporate performance management (CPM). In this specialised niche, the name of avantum is often heard as a sought-after specialist in Germany .

Several factors have contributed to avantum's success. For one, it has shown that it has what it takes for managing the 'human element' of CPM projects-a key factor for converting theoretical potential into tangible gains for clients. Equally important, avantum's consultants have the skills and experience necessary for defining and implementing CPM frameworks, especially for complex customer requirements. Such solutions, which process analytical queries online and in real time, are built around key performance indicators (KPIs)-a diverse range of client-specific operational and financial metrics used for monitoring an organisation's performance. KPIs, in turn, are linked to the company's strategy through balanced scorecards and are monitored through a set of easy-to-understand visual indicators called management cockpits.

"By involving others and making people responsible, we help managements change the way they lead their companies." -Axel Meyer

Dr Axel Meyer, avantum's managing director and founding partner says: "We are witnessing a renaissance in the balanced scorecard concept as it can help combine strategic goals with operative goals and targets. For instance, with a balanced scorecard we can take a company's strategic targets and break them down into operative units in different locations and diverse businesses. We do such conceptual work quite often and, in the next step, implement tools to monitor these KPIs in the form of management cockpits."

As an independent CPM consultant, avantum specialises in conceptual work and integration of CPM solutions supported by a change-management approach. Increasingly, consulting services around customer relationship management (CRM) systems also play an important role. As a solutions partner for international consultants such as Ernst &Young and Capgemini, avantum functions as a systems integrator for their clients, providing implementation and support through the entire project lifecycle.

Avantum's integrates 'best of breed' software in its solutions. To this end, it is a certified partner for many of the industry's leading software vendors such as Applix, Hyperion, SAP, Update and Winterheller. Utilising their products, some of avantum's implementations include: A user-friendly controlling system for endemol, Germany 's leading independent television producer. Based on Winterheller's Professional Planner, avantum has integrated different data sources to provide endemol an overview, in real-time, of all relevant figures-such as costs, profitability, personnel and other resources-for individual projects and television shows in production. Other corporate planning and reporting projects include implementations for Thomas Cook, the international travel and tourism company; WALA, a manufacturer of natural cosmetic products; and Werhahn, a diversified group of companies, among others.

For Dräxlmaier, an automotive components company, avantum implemented a strategic sales planning system based on the Applix TM1, a MOLAP (Multidimensional Online Analytical Processing) database server. The system's fast query performance and natural indexing function enables Dräxlmaier to analyse large sets of operational data in real time to calculate incoming orders. Another TM1 project of note has been for Rhenus-a company providing a full range of transport and international logistics services such as forwarding, distribution and warehousing.

For a different implementation avantum has developed an integrated finance, accounting and reporting system linked to an SAP-based enterprise resource planning platform for SRH Holding-a privately held foundation which operates a group of companies in education and healthcare.

What all these solutions have in common is an emphasis on reliability, speed and functionality. In the case of WALA, for instance, the time needed for reporting was reduced from two weeks to an hour and for the budgeting process it was reduced from six weeks to six days.

As part of its ongoing assessment of the CPM market, in February 2007 avantum conducted an extensive study on the strategic decision-making process in German companies. The target group was mid-sized companies with an annual turnover of 50 million euros and above, primarily in the manufacturing, services and trading sectors. The participants were either board members or those in senior management positions, two-thirds of whom were responsible for finance or controlling.

Some of the findings of the study were that, although 99% of the companies had clearly defined strategic goals, only 60% had direct access to information relevant for strategic decision-making. One-fifth of the companies with a performance-management tool in use were unable to access the relevant data due to either conceptual or organisation weaknesses in the system. Another fifth had problems with the quality or integrity of the information in their databases. This shows that, despite the availability of the right software and tools, some of the key factors hindering the effective use of CPM are data integrity, faulty implementation and human resources issues.

One of the key elements for avantum, therefore, is change management. This essentially means defining the changes in technology, business processes, skills and people-interaction necessary to achieve the client's performance-management objectives.

"It all starts with assessing how certain changes effect an organisation," explains Meyer. Once we understand how a change will be perceived by the organisation, we then come up with the required measures that are supported through training concepts, communication concepts and changes in the style of management. It then goes down to concrete measures to ease the consequences of change. Nobody likes change, of course, but the management instruments that we apply are to introduce change. By involving others and making people responsible, we help managements change the way they lead their companies. This process is all part of our work."

Before establishing avantum, Dr Meyer and his management team were in senior positions at Capgemini. Meyer was vice-president and a member of the Central European Management team for mid-sized companies; Frank Hendricks was a principal for business-intelligence consulting services; and Michael Sinss was also a vice-president for business development of mid-size companies; Dirk Böckmann was involved with building Capgemini's business-intelligence practice; and Dr Thomas Fischer specialised in CRM concepts and solutions along with process optimisation and organisational strategy. Early this year Dr Hans-Gerd Servatius, well known in the CPM industry, joined avantum as a partner. Servatius has held senior management positions at Roland Berger and PwC Consulting. In addition, he is an honorary professor of corporate leadership at the University of Stuttgart . So, first and foremost, this is a team well-experienced in IT and consulting projects for mid-sized and the larger mid-sized companies. At the same time, as specialists, they often come up with innovative methods and concepts that add value to their mandates.

Says Meyer: "Dr Servatius is an expert in performance management, compliance, strategy and organisation issues. At present he is into Sarbanes Oxley; not so much the regulatory aspects but on performance improvement. And this is unique, because although there are several companies working on Sarbanes-Oxley-related issues, what they are not doing is improving performance or organisational effectiveness of client companies. So, we at avantum try to find a unique approach to such aspects."

This is appreciated by many of avantum's clients such as Versatel-a pan-European telecom services provider-and Haniel, a diversified group of companies. Avantum's work for Versatel, for instance, is a project based around internal audit and performance-improvement issues.

Looking ahead, avantum is well positioned. It is growing at about 30% per year, and has an excellent reputation within the consulting services industry. This reflects in the various accolades it has received. For instance, in 2003 it was honoured by Winterheller as its 'Top Solutions Partner' and subsequently, in 2004 and 2005, avantum received Winterheller's 'Best Practice Award'. Add to this the growing demand for performance management systems, both from Germany and the neighbouring countries of Austria and Switzerland , and you have a robust growth scenario.