Annual Report 2006
Not for routine assignments.
But when it looks impossible.
Annual Report 2006
Contact Information
Annual Report 2006
Box 3216, SE-103 64 Stockholm, Sweden Visitors: Mäster Samuelsgatan 60
Tel +46 (0)8 635 80 00 Fax +46 (0)8 635 80 02
E-mail: info@connecta.se Internet: www.connecta.se CONNECTA AB
SE-211 35 Malmö, Sweden Visitors: Djäknegatan 16
Tel +46 (0)40 602 73 00 Fax +46 (0)40 602 73 01
Connecta AB
Visitors: Mäster Samuelsgatan 60 Box 3216
SE-103 64 Stockholm Sweden
Tel +46 (0)8 635 80 00 Fax +46 (0)8 635 80 02
Visitors: Djäknegatan 16 SE-211 35 Malmö Sweden
Tel +46 (0)40 602 73 00 Fax +46 (0)40 602 73 01 www.connecta.se
For general information on Connecta:
info@connecta.se
IR:
Lisa Andersson Tel +46 (0)8 635 87 19 lisa.andersson@connecta.se
Press:
Robin Askelöf Tel +46 (0)8 635 88 60 robin.askelof@connecta.se
Contents
CEO’s Statement 3
Highlights of 2006 7
Operations 11
Connecta’s Market and Clients 15
Connecta’s Services 19
Connecta’s Skills Segments 25
Connecta’s Brand 29
Connecta’s Projects 33
Human Resources 41
Financial Information
Financial Goals 46
The Share 48
Directors’ Report 50
Consolidated Income Statement 55
Consolidated Balance Sheet 56
Statement of Changes in Consolidated
Shareholders’ Equity 57
Consolidated Cash Flow Statement 58 Parent Company Income Statement 59 Parent Company Balance Sheet 60 Statement of Changes in Parent Company
Shareholders’ Equity 62
Parent Company Cash Flow Statement 63
Notes 64
Audit Report 76
Five-year Review, Group 77
Consolidated Quarterly Data and Key
Financial Ratios 79
Corporate Governance Report 80
Definitions 82
Annual General Meeting 83
Board of Directors 84
Senior Executives Inside cover
Contact Information Inside cover Not for routine assignments.
But when it looks impossible.
Production: Dowell//Stubbs www.dowellstubbs.com Reprographics and printing: Modin Tryckoffset Photography: Pål Allan Translation: Turner & Turner, www.turner.se
Not for routine assignments – but when it looks impossible.
Connecta is a management and IT consulting practice that wants the most demanding and challenging assignments. We collabo- rate closely with our clients to enhance their competitiveness and implement change when they can’t go on as they have in the past. Connecta has the ability to integrate strategy, business know-how and information technology to achieve optimal
solutions – even when the challenges appear insurmountable.
Connecta’s consultants possess broad business understanding and in-depth knowledge of one or more specialist segments. Our experience enables us to implement extensive change projects and deliver solutions that maintain market-leading quality.
Connecta creates unique solutions for every client, proceeding from the client’s goals, organizational resources, market position and IT structure. We tailor our teams and working methods to the nature of each assignment.
Connecta helps its clients change and improve their business with the aid of new technology, because we understand that IT is a vital tool to enhance and rationalize business-critical processes. Our ex- tensive experience means we can support clients right the way from strategy to complete and implemented solutions or change packages.
The company has some 440 professionals, who deliver solutions
in five main practice areas: Customer Relationship Management,
Supply Chain Management, IT Value, Outsourcing and Change
Management.
CEO’s Statement
CEO’s Statement
We’ve emerged from an intensive year. For the first time in many years, Connecta moved outside Stockholm, opening an office in Malmö, designated ‘Öresund’, last fall. We hired a local manager and began expanding by hiring staff and securing long-term assignments with three new clients in the region. We also took the initiative to incorporate a part-owned subsidiary (Qube) in Riga, Latvia, targeting various types of application management business in Sweden. The fact that our know-how is in demand even outside the ‘city walls’
feels very stimulating.
However, I’m most proud of our fantastic expansion in Stockholm, with 151 new employees.
Combined with reduced staff turnover 14% (18%), this offers us great opportunities to work on new and exciting assignments with an expanding client base. There are several factors underlying our growth, although internal loyalty, and with it, tip-offs for new hirings, are the most successful. We also watched our graduate trainee program flourish, and we brought in another crop who got off to a flying start. The energy these freshly qualified graduate trainees bring us is a real shot in the arm for the whole organization.
Our values are based on simple but important principles: ambition, team spirit, personal leadership, honesty and integrity, coupled with good health and a work-life balance. These are the fundamentals interweaving everything we do at Connecta, right from hiring staff, through internal skills enhancement, controlling and management, to individual consultants’
work each day with our clients. But what’s best is that all our professionals can put their own personal spin on our values, albeit within a shared framework. This gives the individual great freedom to operate and progress, but also means considerable responsibility, because we always want to feel pride in our skills and what we do for our clients.
Connecta utilizes personal leadership – our professionals’ commitment and input are one of our prime competitive edges. Connecta’s consultants all utilize the same best practice models and Connecta’s proprietary project methodology. But we still tailor our approach in close collaboration with our clients. Working in teams with fellow professionals representing differing competencies is rewarding for the client and our consultants. In 2006, Connecta invested in a considerable number of training packages in various forms of internal skills program – all interwoven with our corporate culture and values.
Connecta’s strategy is to focus resources on a number of key clients, i.e. clients that entrust us with their biggest challenges. In 2006, we had the privilege of renewed and extended undertakings with most of our current clients. One clear trend is more clients conducting highly strategic projects. We secured many assignments where we implemented some of the most sophisticated and challenging projects our clients have ever invested in – projects affecting their core business. The biggest and arguably most notable deal was with pension administrator Collectum, where we were the main provider of a SAP CRM implementation, which involves producing a new platform for managing occupational pensions. This is a very substantial challenge to be met, in what, in its context, is a very tight timescale. In many ways the project is the archetype for our tagline: “Not for routine assignments – but when it looks impossible.”
CEO’s Statement
“ Our professionals’ commit- ment and input are a prime competitive edge.”
Connecta’s know-how is integrated in various skills segments: management consulting, ERP systems, system development and more technology-related services. From 1 January 2007, we have another skills segment – Microsoft – with consultants who specialize in Microsoft products. We also extended our initiatives in the following offerings: ERM, SCM, Change Management, Outsourcing and IT Value, which are horizontal across our skills segments.
Connecta’s combination of CRM know-how, for example, in our management and SAP arms, created several new and exciting deals.
In late fall, we invested in a completely new graphical image and logo. This new expression of our brand symbolizes our values of problem-solving, drive, personal commitment and our endeavor to be a professional consulting partner. We also identified nine different images, each of which illustrates a challenge we have met for our clients and inspires us to create new solutions.
Overall, this enabled positive profit performance in 2006, at SEK 57.6 (41.7) m and sales growth of 37%. We are now well equipped going into 2007. Looking ahead, our goal is continued growth with retained profitability, with continued client engagements and new, exciting assignments – that seem impossible. Our ambition is to set a new and higher standard for what our consultants can achieve!
Per Agélii
Chief Executive Officer
CEO’s Statement
“ In 2006, we implemented some of the most sophisti- cated projects our clients have ever invested in.”
Highlights of 2006
Highlights of 2006
Highlights of 2006
Connecta had a strong 2006, when the market for its services was healthy, and the company successfully continued its organic expansion. Revenues grew by 37% in the year to SEK 550.6 (401.3) m. The revenue gains are due to an increased number of employed consultants, higher billing rates and somewhat higher average pricing. At year-end 2006, average rolling 12-month sales per consultant on assignment were SEK 1.525 (1.449) m, an increase of 5%
on the corresponding point of 2005. Increased sales per consultant are also due to a higher billing rate, at 83.4% for 2006 (81.4%) and somewhat higher average pricing. Operating profit grew by 38% to SEK 57.6 (41.7) m.
In the year, Connecta’s clients upscaled their investments in business development and enhanced IT support. Rising demand for the company’s services and the trend towards larger engagements resulted in average prices increasing. In 2006, all selected key clients renewed their undertakings with Connecta.
The company had brisk organic growth in the year, hiring 151 (116) employees; staff turnover reduced to 14 (18)%.
Connecta Introduces Profit-share Scheme for All Employees
Connecta’s Board of Directors decided to offer all employees participation in a profit-share scheme by assigning 20% of their performance-related pay to a profit-share fund.
Adjusted Salary Model for Corporate Management
In 2006, the company adjusted the salary model for 22 members of the corporate manage- ment. The aim was to sharpen the focus on profit growth and collaboration. Outcomes are linked to Connecta’s profit and each employee’s share of the outcome is linked to their satis- faction of individual goals and responsibilities in the company.
Connecta Reaches Settlement, Old Dispute Resolved
The background is a dispute with its origins in fall 2001 when Connecta acquired the assets and liabilities of companies of the former Adcore group. Subsequently, these assets and liabilities were re-formed as an autonomous sub-group, the ‘Edsparken/Adcore Tech’ group, which Connecta then sold on in spring 2002.
In the year, Connecta reached a settlement with the administrator of the Edsparken/
Adcore Tech group, implying Connecta being discharged from all current and future claims from the involved bankrupt estates. In return, Connecta paid a total of SEK 1.2 m to these estates.
Connecta Starts Nearsourced Application Management Operations in Latvia
Alongside Deseven Capital AB, Connecta started up nearsourced application management (AM) operations in Riga, conducted by the company SIA Qube, which focuses on supply- ing competitive, cost-efficient and high-quality AM services. Connecta owns 40% of Qube, and Deseven, 60%.
Sales, Rolling 12 mth, SEK m
Operating Profit/loss, Rolling 12 mth, SEK m
Highlights of 2006
Connecta Starts up in Öresund Region
Connecta has started to build a business in the high-growth Öresund region, connecting southern Sweden with continental Europe.
A local manager has been hired to lead and develop this business. This start-up is intended to develop long-term business with Connecta’s clients in the region, and to forge new client relations. Mats Wallén will be a member of Connecta’s executive management.
Connecta Signs Agreement with Collectum AB
During the year, Connecta signed an agreement with pension administrator Collectum, a collaboration implying Connecta helping Collectum to develop and implement a new ERP system to manage the ITP scheme (supplementary pensions for salaried employees). This deal has an estimated order value of SEK 60 m for Connecta (a press release on an extended project of another SEK 30 m was published in January 2007).
Connecta’s New CEO – Per Agélii
A Board meeting on 7 December appointed Per Agélii as Connecta’s new CEO, and Johan Wieslander as Executive Chairman. Current Chairman Lars Grönberg will remain a Board member. These professionals took up their positions on 1 January 2007.
Key Financial Ratios 2006* 2005* 2004* 2003 2002
Revenue, SEK m 550.6 401.3 312.8 270.9 361.7
Operating profit/loss, SEK m 57.6 41.7 33.9 -9.0 -50.4
Operating margin, % 10.5 10.4 10.8 neg neg
Operating margin, %** 13.0 12.6 11.9 neg neg
Net profit/loss for the year, SEK m 40.3 28.9 24.7 -20.9 -43.8
Equity/assets ratio, % 41.2 46.3 52.4 41.8 27.8
Dividend*** 3.88 2.79 0.85 - -
Billing rate, % 83 81 76 70 59
Sales per consultant, SEK 000 1,525 1,498 1,278 1,085 954
* The accounts for 2006, 2005 and 2004 are stated pursuant to IFRS while the accounts for 2003 and 2002 are stated pursuant to RR (Redovisningsrådet, the Swedish Financial Accounting Standards Council) recommendations.
** Operating margin adjusted for subcontracting consultants and non-recurring costs.
*** Dividend for 2006 is proposed dividend.
Operations
12 Operations
Operations
Business Concept
Connecta’s business concept is to help corporations and non-profit organizations to change and achieve desired results by integrating management and IT skills.
Vision
Connecta’s vision is to create a new standard for consulting and thus alter client percep- tions of what consultants can achieve. This new standard is not a matter of individual per- formance, but rather, about raising standards, which cuts right across the whole consulting sector. To realize the company’s vision, Connecta must achieve actual and unequivocal positive results for its clients’ business. To achieve this vision, Connecta’s 10 largest clients must perceive that Connecta has raised their expectations of consultants to a new level.
Mission – Connecta’s Role
Connecta’s task is to change the client’s reality to create better business and increased competitiveness. When its clients are successful, so is Connecta. Connecta cannot be successful without its employees being successful. Accordingly, Connecta hires and systematically develops its staff, with the aim of getting Swedish business to flourish.
Business Model and Strategies
Our underlying business model is founded on our corporate management and consultants endeavoring to identify companies that need change to enhance their competitiveness.
Often, such companies need consultants capable of managing challenging change projects.
On change projects, Connecta’s consultants can create substantial values for the client, while simultaneously developing themselves. To achieve this, Connecta’s objectives and strategies must consider clients, professionals and profitability equally.
Closeness through Key Client Relations
Connecta builds its brand through long-term close collaborations with many of the Swedish market’s most successful and demanding corporations. Connecta has chosen to focus on a compact cluster of clients with the objective of developing long-term collaborations. By being the best at working close to clients, Connecta can achieve lasting customer benefit.
The focus on these clients means that projects are always managed by a representative of Connecta’s management and staffed by key account teams covering Connecta’s full skills set.
High-impact Offerings that Create Results
Connecta’s successful solutions should be reusable so they can position the company with key client decision-makers. Solutions highlight the results of Connecta’s integrated skills, and thus, the values that can be created. Connecta works alongside client managements to create shared incentives for both partners to pursue the same goal: lasting value-creating change for the client.
13 Operations
A Cost Structure that Enables Flexibility
Connecta will maintain a cost structure that can withstand phases of deteriorated market conditions and exploit cyclical upturns. Connecta’s salary model is central in this con- text, implying that employees and the company share in risks and successes through remuneration in addition to basic salary being founded on the company’s profit combined with individual performance. This salary model means the company constantly tracking profitability performance at assignment level, and feeding this back into consultants’ per- formance-related pay parameters and the company’s staff and service cost levels.
Leadership
Connecta views leadership, and particularly how each individual’s actions affects other people, as fundamental to the company’s corporate culture and an absolute success factor in successful and profitable client engagements. Connecta assigns substantial funds and management resources to building and maintaining high quality levels with the company’s employees, which constitutes the foundation of the company’s capacity to help its clients on problematic change packages.
One Consulting Model, One Salary Model
Connecta has an unequivocal consulting model to classify its consultants’ experience and skills. This model is unique to Connecta and integrates issues of experience and educa- tion standards with all dimensions of the implications of responsibility and authority at Connecta. The consulting model is closely linked to a consistent salary model. Consultants and managers are guided by the model in structured and progressive dialogues to consider how performance should be evaluated and in forward career planning.
Quality
Satisfying the demands of our progressively larger engagements and client relations is a prerequisite for Connecta progressing consistent with our long-term objectives. Connecta ensures the company’s quality activities with the aid of the following three processes:
Preventive Processes
Connecta has overarching corporate skills enhancement packages implemented as induction seminars to the company and employment, corporate culture and leadership, delivery and sales processes. The management uses these packages to define frameworks and tools for Connecta’s business activities. The management and staff practice how these frameworks and tools should be tailored in daily activities together. Our ambition is for all consultants to take at least one seminar per year. To enhance the company’s sales and delivery processes, Connecta invests continually in systems to exchange best practice and collaborate.
Control Processes
Connecta has created dedicated quality resources to verify, monitor, and where necessary, rectify issues. These resources continually make internal and external measurements, which can result in short-term operational input and more structured actions.
1
Our quality resources have counterparts within Connecta’s key clients, which prepare, implement and report a client-focused quality agenda. The quality resources report to the CEO and Board.
Reporting Processes
Connecta measures the company’s input using a Customer Satisfaction Index, CSI, a method that expresses quality as perceived by the client, and creates the conditions for strategic and operational actions. Connecta’s strategic reporting summarizes qualitative and quantitative measures and serves as a complement to the company’s more operational reporting. Strategic reporting is based on a number of Balanced Scorecards, whose purpose is to ensure the satisfaction of strategic objectives.
Customer Satisfaction Index, CSI
The CSI is a strategic measure of Connecta’s quality activities and is intended to measure client satisfaction. The CSI consists of a questionnaire on how well Connecta is performing and satisfying expectations in terms of relationship, business know-how, client understanding, delivery quality and business acumen. The questionnaire is followed by personal interviews to gain a more detailed impression of responses from Connecta’s clients, and their percep- tion and experience of the company’s activities.
The quality of daily activities is enhanced using a single, consistent quality tool and shared process, which also improve deliveries to the company’s clients, while reinforcing dialogue and closeness to the client. The CSI also enables the continuous monitoring of statistics, and personal feedback, in a structured manner.
The CSI was implemented with 12 Connecta clients in 2006: the aim of increasing the CSI on 2005 was achieved.
The questionnaire showed that clients choose Connecta for the professionalism they perceive and the company’s pronounced culture of delivering. CSI activities are continuing in 2007.
Operations
Connecta’s Market and Clients
16
Connecta’s Market and Clients
Connecta’s Market and Clients
Connecta’s market continued to grow in 2006, as was also reflected in pricing. This became clearly apparent in the fall, when demand rose and prices increased. Connecta continued to secure new assignments from all the company’s key clients, and also experienced purchasing departments in large corporations preparing for increased volumes by signing new long-term master agreements. It is obvious that Connecta is well positioned on a market exhibiting high demand for consultants capable of managing and implementing change.
Businesses in Transformation
The year 2006 brought major change for Connecta’s key clients, with a number of our largest clients investing in the fundamental renewal of IT systems, leaving the world of mainframes for a future of comprehensive ERP systems based on standard packages. These changes are mainly being implemented to retain the possibility of realigning business as fast as the future demands.
Simply, many of these corporations cannot cope with current rates of change without making these investments. Growth is another clear change driver. The demand for increased production capacity implies higher standards on companies’ capacity to manage their entire supply chains, which in turn, raises the standards on corporate sales forecasts to enable the planning of pro- duction and purchasing with the goal of offering the right volume of products at the right time.
Clients are currently demanding very high service standards, and immediately switch to other alternatives if products cannot be delivered with sufficient capacity. Such changes create high demand for IT and business consultants with multiple and diverse skills. For example, this neces- sitates changing everything from infrastructure to structuring a corporation’s communication strategy. These changes are expected to result in healthy demand for all Connecta’s services.
Rationalization
Large corporations are still endeavoring to re-engineer their business processes by integrating IT systems. This not only affects the technology solutions that manage transactions between systems, but also necessitates very extensive efforts. Integration with corporations’ external business partners is a top priority, achieved through end-to-end business processes, from point of sale to payment settlement. To cope with this type of integration, efficient integra- tion centers and an improved IT architecture are imperative.
Connecta is basing more and more of its client solutions on service-oriented architecture (SOA), and expects fundamental architecture transformation to occur in 2007. Demands for interaction between changing and clarifying responsibility in business on the one hand, and changing how information flows in IT solutions are realized on the other, are particularly relevant to Connecta. The challenges that ensue from this can only be satisfied by striking the right balance between business understanding and insight into IT solutions. This means that Connecta’s initiatives in business-oriented integration services are well positioned.
Outsourcing with Commonsense
Outsourcing parts of IT will remain on the agenda of many corporations, although not primarily to divest non-core business to rationalize balance sheets. Rather, this is a matter of more focused input with each component of IT operations being individually evaluated. If this can be achie- ved more cheaply and efficiently without compromising valuable control and skills, outsourcing becomes an option.
17
Operational and IT Management
Current high rates of change, driven by demands from the market and legislation, mean decisions must be taken quickly. In recent years, corporate IT managers have found them- selves focusing primarily on cost-cutting. Accordingly, IT departments are often reactive, responding exclusively to business needs for change, rather than actively making enhance- ments. Involving IT management personnel when reaching business-critical decisions is a progressively more central issue for contemporary corporations. Without the right under- standing of the importance of this factor from the bottom up, and without IT managers really pursuing corporate objectives and visions through the appropriate implementation of IT solutions, a business cannot be optimally equipped for change.
Developing Services
Connecta endeavors to create long-term client relations by being close to the market’s major change drivers. Many of our key clients are raising the priority of the ability to tie in skills and ensure that they progress in line with change in the surrounding world and within the company itself. Accordingly, Connecta continually emphasizes the development of strategic partnerships with the market’s largest vendors of IT solutions like Microsoft, SAP, IBM and HP. This is a necessity to ensure up to date skills in the latest solutions.
Clients
Connecta’s progress is client controlled, which means that we actively endeavor to tailor services according to client needs, but also actively approach those clients that would likely benefit most from our services. We seek to create long-term collaborations with these clients.
The best we can achieve is to be entrusted as a long-term component of client organiza- tions. We believe that with our constant endeavor to renew and change, we can be a badly needed part of many of Sweden’s corporations. Our clients are leaders the Swedish retail, banking, insurance, service and telecom sectors. In 2006, Connecta’s biggest clients were Ericsson, pension administrator Fora, HP, northern European food provider ICA and Sony Ericsson.
Competitors
Connecta has a broad offering and encounters a range of competitors depending on the type of assignment and related skills. Accordingly, at the overall level, Accenture and Cap Gemini have comparable skills and focus. However, rather than being a vendor of application mana- gement or outsourcing services, Connecta conducts consulting activities exclusively. The implication of market progress with increased rates of change in client corporations is more frequent, complex enquiries that bridge multiple skills segments. This puts more demands on consulting practices’ breadth of consulting services, and as a result, excessively niche- oriented consultants can encounter problems satisfying customer standards and needs.
Connecta is one of few Swedish players currently possessing an integrated skills set in the management and IT segments capable of managing and exceeding the major multinational players’ professional delivery capacity, with more prioritized and close client relationships.
Connecta’s Market and Clients
Sales, 5 Largest Clients
Sales share, largest clients: 63%
Sales share, other clients: 37%
Sales, 20 Largest Clients
Sales share, 20 largest clients: 93%
Sales share, other clients: 7%
63%
37%
93%
7%
Connecta’s Services
20
Connecta’s Services
Connecta’s Services
Connecta’s primary task is to support companies to realize strategies and increase competitiveness by supporting them in various business areas: process re-engineering, organizational change and the development and modification of systems. To maximize the pay-off from our skills, Connecta offers services in five over-arching practice areas that match clients’ central business processes.
CRM – Customer Relationship Management
Customer relationship management is the collective term for Connecta’s offerings that address a company’s interaction with its customers. The primary segments are marketing, sales, servicing, customer understanding and analysis. We support clients throughout the chain from customer and marketing strategy to operationalizing through sophisticated campaign tools, sales support and call centre solutions.
Our clients’ ability to segment customers and differentiate their offerings over time is decisive to their capacity to create growth. The trend we are currently witnessing implies our clients need to get better at utilizing customer information and analysis in ongoing customer care. As a direct result, Connecta conducted unique research in 2006 entitled “Insight Driven Marketing and Sales”, which was presented at a major seminar at the Grand Hotel, Stockholm. Connecta’s CRM clients are multinationals and smaller, more local enter- prises including HP, Sony Ericsson, Ericsson, state-owned gambling and gaming corporation Svenska Spel and insurer Länsförsäkringar.
SCM – Supply Chain Management
Supply chain management is an offering targeted at businesses that want to implement improvements in purchasing, production and logistics. Key projects with a number of SCM leaders enable Connecta to accumulate specialist know-how progressively that is unique on the Swedish market. Connecta offers solutions from operational and IT perspectives. Often, the key to success is uniting these two perspectives. Connecta’s SCM offering extends from reviews of entire supply chains to highly specific concepts such as tools to automate order processing. The ambition is to create innovative solutions that are more cost-efficient than competitors’. In SCM, Connecta brings together sales, logistics, production, product develop- ment and purchasing specialists. Connecta consultants help businesses and organizations to define and take responsibility for the introduction of new strategies, processes, systems and new technology, with the consistent aim of rationalizing the goods flow chain. SCM clients include Sony Ericsson, northern European food provider ICA, food retailer Coop, Statoil and Skanska.
21 Connecta’s Services
IT Value – Optimizing Investments in IT
Connecta has created a range of services in IT Value that help clients increase the value of their investments in IT successfully. These services are intended to design and launch the IT resources of the future. The ambition is to help clients ensure their IT operations run efficiently and as a business unit, with transparency, using quantifiable measures and with unequivocal goals and strategies. The prime consideration is to ensure a sharp focus on the current and future needs of business activities. Connecta works alongside clients right from strategy, standards, target parameters and requirements specification, to prioritizing and controlling the project portfolio. Connecta also conducts assignments intended to optimize technology environments and the effect of investments made in application architecture.
Clients in this practice area include Ericsson, northern European food provider ICA, Swedish national pharmacy corporation Apoteket, northern European financial services group Nordea and HP.
Advisory Services and Operational Support of Outsourcing
In an increasingly globalised and competitive market, corporations are continually reviewing their efficiency and regularly re-evaluating their core business, and the decision to outsource a process or business can be the result of such evaluation processes. With its experience of a substantial number of assignments and an impression of progress on the outsourcing market, Connecta has created and standardized a range of services encompassing advisory and operational support throughout the outsourcing process from strategic advisory services through business and process analysis and tendering to realigning and delivery. This offe- ring is targeted at existing and potential buyers of outsourcing services, and outsourcing service vendors. Clients include HP, northern European food provider ICA and northern European financial services group Nordea.
Change Management
All progress is about change, and Connecta’s consultants are trained to drive change – from strategy to updating after major reorganization and/or system implementation. Connecta adopts a structured approach to lead clients through change. We help define the values to be realized, and how the change should occur. We support preparations ahead of change, help managers lead activities and update the outcome of change. Our ambition is to help our clients’ managers to lead change processes themselves, while we provide support, through our experience and methodologies. Connecta has conducted major internal restructuring for clients over the years, necessitating fundamental change extending to everything from corporate leadership and management to working methods, culture and skills composition.
Change Management clients include Statoil, Sony Ericsson and Ericsson.
22
Connecta’s Services
Business Development
Business development is important for Connecta, and indirectly, for its clients. By developing as a business, we become a better supplier of consulting services. Our objective in this seg- ment is the same as we recommend, i.e. striving for constant progress and change.
Connecta works actively on business development, structuring these activities in two formats – Focuses and New Business.
Focuses are activities Connecta wants to develop because they are considered important to the company’s market positioning, simultaneous with us either needing to develop skills or integrate know-how already within the company’s various units. Our focuses are time-finite and have clearly defined developmental objectives.
In New Business, we generate, screen and develop business ideas that may lie within or outside Connecta’s operational scope. The purpose of new business is to create the right conditions for new business concepts quickly, that can visibly contribute to Connecta’s financial results. By nature, these concepts might not naturally fit into Connecta, and accordingly, business concepts may also result in activities outside the company – although also always with a clear synergy with Connecta.
Example Focuses Integration
One of the biggest challenges our clients face is to cope with the complexity of the variety of IT systems they possess. Large corporations often have hundreds of systems that interact to support business activities. This means changing systems to follow operations is problematic and costly, but there is a range of integration concepts and platforms intended to reduce this complexity. Our integration focus is our means of focusing and enhancing our integration skills, and to formulate clear offerings for the market based on strategic integration know- how interacting with our knowledge of integration platform technologies like Webmethods, Microsoft, IBM and SAP, where Connecta currently has formal partnerships. Connecta’s clients in integration include Tele2, Sony Ericsson and Telenor.
Telecom
Telecom is another of Connecta’s focuses. The company collaborates with Sweden’s telecom leaders when making strategic choices and implementing business-critical systems. With its rigorous understanding of the telecom sector, business logic and technology, Connecta is capable of addressing client challenges from several perspectives. Connecta has some 50 consultants with telecom experience. Segments where we are successfully running projects include sales and partnering strategies, sales and customer support, product management, supply chain management, order management and service fulfillment, billing and systems architecture, systems integration and system development. Connecta’s largest telecom customers are Ericsson, Sony Ericsson, Tele2, Telenor and TeliaSonera.
23 Connecta’s Services
Selected New Business Qube
Qube is an enterprise that is independent of Connecta, which provides efficient development and application maintenance for Connecta’s clients using a focused business model. The company is located in Latvia, enabling cost-efficient, high-quality engagements with cultural and geographical closeness and a high level of technology know-how. The company is 40%
owned by Connecta and 60% by venture capital firm Deseven Capital AB.
Nova
Nova is Connecta’s graduate trainee program, which it operates to develop the best con- sultants of tomorrow. Connecta selects a group of high-achieving students each year, who undertake a structured three-year program, which combines formal education with relevant consulting assignments, mentoring support and ongoing appraisal.
Connecta Öresund
Connecta Öresund is the result of Connecta’s business development strategy close to customers. To remain a strong partner for some of the company’s key clients, while also being an active employer for some of the market’s best consultants, in 2006, Connecta started up operations in southern Sweden. These operations are intended to be a reflec- tion of Connecta and benefit from the resources of the Stockholm office. The start-up is also intended to grow into a strong local player with sufficient critical mass to deliver Connecta’s services on this high-growth market.
Connecta’s Skills Segments
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Connecta’s Skills Segments
Connecta’s Skills Segments
Connecta’s consultants work in its skills segments, where they develop their specialist roles.
All our consultants possess broad-based business understanding, knowledge of the role of IT in business processes and in-depth skills in one or more specialist segments. This gives them the ability to combine strategy, business know-how and information technology to be able to help corporations and non-profit organizations on strategic and technological issues.
Connecta’s skills segments are also the foundation of our services offerings.
Development
With the aid of Connecta’s SCM, Telecom, CRM and Integration offerings, the Development skills segment has offerings focused on processes and technology. Its consultants are specialists in investigating, planning, managing and implementing complex system development projects.
This requires an understanding of the technological and functional complexity often involved when large corporations develop, swap or upgrade business-critical systems. In-depth know- how on the latest integration platforms and development environments are also essential.
Development’s consultants are experienced project managers, architects, systems developers, requirements and test managers. Development’s business development services portfolio encompasses requirements, test management, system development, system integration and IT architecture. Segments like Development focus particularly on, and accumulate knowledge of, integration, CRM-Siebel, Standards and Test Management and Telecom. Development is Connecta’s largest skills segment with over 145 employees.
Enterprise Applications
Enterprise Applications integrates Connecta’s specialist knowledge of standard ERP systems. We assist clients who are considering, or have chosen, ERP systems as the basis of their IT support. Our consultants are experts in their application segments, and apart from very thorough knowledge of system functionality, also have an intimate understanding of the business process each system supports. Enterprise Applications also harbors project and change management skills specialized on implementations of ERP systems, which is essential for client investments in ERP systems to be profitable.
Connecta has succeeded in dovetailing regular SAP consulting activities with more system development-oriented Java operations, very successfully exploiting the new opportunities SAP NetWeaver bring. In turn, this has resulted in many new exciting projects and engagements, in a completely new market segment for SAP and Connecta. In 2006, Connecta accredited the most SAP consultants in Sweden.
This skills segment has more than 115 consultants focusing on specialist services primarily on the SAP product portfolio, but also Baan, Movex, Siebel and Peoplesoft.
Management
Connecta’s management consultants operate mainly alongside clients’ senior business and executive managers, and take responsibility for strategy implementation and operational enhancements. They are experts in helping clients to reach well-considered decisions to resolve strategic business and management issues. Connecta’s consultants run these critical decision processes alongside clients’ decision-makers, and then assume operational responsibility for implementing the resolved change projects and measuring the results.
Business-driven system development in complex environments
Implements major SAP projects
Executive management advisory services
27 Connecta’s Skills Segments
The skills segment’s consultants also interact closely with Connecta’s other segments to ensure business is profitable, realize growth potential and other types of business benefit on the projects where they participate. The skills segment has some 50 consultants.
IT Management
IT Management has three main focuses: maximizing the value of IT, delivering effective outsourcing and improving IT departments’ internal efficiency.
The target group is IT managers; consultants work on evaluating IT and infrastructure alongside their business partners. Assignments often revolve around implementing methodologies that rationalize working methods and make the quality of IT measurable and goal oriented. The skills segment uses ITIL, integration, project automation, project management of infrastructure projects and the organization of critical IT deliveries such as support functions. Its consultants have substantial experience of working on outsour- cing issues such as strategy, procurement, transition and related activities. Most of IT Management’s consultants have lengthy consulting and line management experience from other companies. The skills segment has some 50 consultants.
Microsoft
Connecta and Microsoft extended their collaboration further in 2006, and as a result, on 1 January 2007, Connecta started a new skills segment focusing on Microsoft solutions.
Connecta invested in skills enhancement and increased its number of accredited consultants from 30 to 45 in the financial year, while also delivering many solutions based on Microsoft technology which function as excellent references. Connecta has been a Microsoft Gold Certified Partner since 2004, and in 2006 the partnership moved to a strategic level, where Connecta and Microsoft run joint business and projects.
Consultants in the Microsoft skills segment are specialists in integration, portals, digital channels and infrastructure, application development, process and workflow development.
Apart from this initiative favoring Connecta’s clients, it also attracts the market’s most highly skilled consultants. Connecta’s goal is to be Microsoft’s best partner in Sweden, to make our clients more competitive using innovative Microsoft solutions and for Connecta to become the first choice for specialist know-how on the Microsoft platform. This new skills segment will give Connecta the opportunity to realize this objective.
Öresund
Consistent with its strategy of growing with and following its clients, Connecta opened an office in the high-growth Öresund region in late 2006. The start-up conforms to Connecta’s regular organic growth strategy.
The regional market is expansive, as is apparent in the labor market. The office will reflect Connecta’s normal services offering focusing on SCM, CRM and IT Management – until the office is big enough to offer know-how from all our skills segments.
Maximizing the value of clients’ IT investments
Enhancing client competitive- ness with innovative Microsoft solutions
Our new initiative on the expansive Öresund regional market
Connecta’s Brand
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Our clients are companies that what to enhance their competitiveness. We work together to implement change when our clients cannot go on as before. The consequence is that entrenched routines and attitudes must be abandoned, which often triggers resistance, obstacles and frustration that make change difficult, costly or delayed. This is where Connecta fits in, and performs when following routines or models isn’t enough, and where successful change can appear impossible – but also imperative.
Our intent to deliver unique solutions and stretch ourselves to set a higher standard for what consultants can achieve is summarized in our tagline:
Not for routine assignments.
But when it looks impossible.
This way of expressing our desired market positioning will be the foundation of, and interweave, all our future corporate communication.
New Graphical Image
In 2006, Connecta took another step in the process to strengthen its brand by reviewing its market communication. We proceeded from the following formulation: “we are what we do”, which reflects the fact that we’re not everyday consultants, but instead, the company that solves problems others think are insoluble. And because we’re not like all the others, our graphical image need not conform to the ingrained or predictable.
The fact that our brand really is the total of what we do is reflected in a new logo, which can be viewed as a summary of all the assignments we have conducted alongside our clients.
Connecta’s Brand
Connecta’s Brand
Connecta’s Website Our new logo
31 Connecta’s Brand
Our logo also symbolizes the fact that we don’t merely help clients implement change, but we also change in the process. This is why the logo includes an element of change and the non-routine, which means people encounter a new and slightly different version of Connecta’s logo each time they see it.
Unexpected colors and a non-traditional layout are also a part of Connecta’s new way of communicating.
Visualizing our Projects
We’re proud of the assignments where we have solved what, basically, are impossible problems together with clients. We want to highlight such projects in our communication, because they’re the best proof that we are positioned on a solid foundation of unique know-how and genuine experience. We follow the consistent principle: actions speak louder than words.
To visualize our solutions, we’ve created photographic images that we use as ‘ice- breakers’ in all possible contexts. For example, only very few consulting practices would dare to put, say, a picture of a cow in a fridge, or an Indian chief on their business cards – only the ones who really are different. As we implement more apparently impossible projects, new images will be created.
The following pages showcase a selection of the solutions that we think best illustrate what we can accomplish.
Event invitation
Business card
Brand book
Advert
Our Projects
In this section, we showcase a number of the most
exciting projects we’ve conducted with our clients.
Connecta solution # 1 – Change Missionaries
Imagine you’ve got an idea that means you can take control over your material flows and ensure growth in an extremely competitive sector where an effective supply chain is the key to success. But simultaneously, you know that this will mean
you need to re-engineer your entire supply chain from the ground up. And that just one component not arriving on time will cause huge delays and losses. In that case, would you still go ahead with your idea?
Connecta solution # 8 – Business Detectives
Imagine that at each year-end you receive an invoice from a supplier. The amount is much larger than you expected. When you ask the supplier what you got for your money, you don’t
get an answer, but are expected to pay anyway. If that sounds strange, it’s because it is. But it’s still a reality for many business areas in companies with high IT costs.
Connecta Solution # 9 – You Guessed Right
Keeping a major retail chain stocked with goods isn’t an exact science. In fact, many logistics chains that put goods on shelves build in hefty safety margins. But these margins imply extra
costs in the form of capital tied-up, transport costs, human resources, and the list goes on …
Connecta solution # 7 – Speed Poker
It all started with a phone call: “we’ve got a problem with our system” and ended in a global project involving over 100 people.
The aim was to exploit a temporary market opportunity, which subsequently proved extremely lucrative.
Connecta solution # 3 – Growing Pains
Swapping an old mainframe system for state-of-the-art standard packages is one of the hardest things a company can do. Tailored code tends grow and proliferate over the years until all a company’s
operations are literally locked in. But sooner or later, businesses need to break out, and call in a ‘bad guy’.
Connecta Solution # 2 – A Better Nose for Business As anyone who’s been in new business knows, schmoozing new clients costs money. But when the contract is signed and the champagne corks are popping, that cost is soon forgotten.
What’s worse is when the client chooses another supplier –
despite you putting your heart and soul into your proposal.
That’s when it’s time start thinking whether you might have worked a little bit smarter.
Human Resources
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Human Resources
Connecta’s Human Resources
Connecta is a knowledge business; its skilled and committed professionals are the key to its success. The company works actively to create a strong shared corporate culture based on the values of personal leadership, ambition, team spirit, honesty and integrity, coupled with good health and a work-life balance.
Hiring – Continued Growth
Hiring and growth remain priorities and a considerable number of highly qualified profes- sionals joined Connecta in the year. Connecta conducted a series of strategic hiring programs targeting highly experienced consultants. Much of the hiring in the year was from recommendations from Connecta’s existing staff, which enabled the company to grow on an increasingly competitive labor market. 151 people were hired in 2006, and thus, employee headcount increased by 27% in 2006.
Skills Enhancement
Connecta’s skills enhancement is a unique way of transforming its vision and strategies into practical daily activities. Many Connecta professionals chose the company because they wanted professional and personal progress. To be increasingly value controlled, Connecta is focusing aggressively on education and training, directed by our vision. Connecta’s training packages are run by our managers and consulting managers in tandem with external consultants.
Connecta’s joint skills enhancement builds on a few simple principles, such as Connecta’s view of personal leadership and experience-based skills training. Connecta has run leader- ship training packages since late-2002, and over the years, virtually all employees have taken the company’s consulting and leadership seminar training package.
Apart from leadership training, managers are trained in Connecta’s project management philosophy, business acumen and business development in-house. Connecta’s training packages rate highly in the employee surveys we conduct regularly. All employees have regular appraisal interviews and individualized development plans. Connecta uses mentor- ship to help develop its consultants and corporate culture.
Finally, there are training packages intended to make employees more prepared to take responsibility for self-learning on assignment. Dedicated internal and external training packages then provide the specialist know-how necessary for employees to deliver our specialist offerings.
Health and Work-life Balance
A healthy balance between work, family and leisure are important for employees to feel good and make progress. Connecta works actively on creating the right prospects for well-being, high performance and high work attendance. The health sphere is in constant development in Connecta’s Health Forum. The company also has a social network focusing on sport, outdoor activities and culture. Connecta’s Health Strategy utilizes health-related activities including keep-fit, circuit training, massage, health checks, counseling, ergonomic reviews, stress training, Weight Watchers, quit-smoking programs and flexible working- hours. In recent years, Connecta has focused on health-related activities, which has paid off;
sickness absence has been in a positive trend, reducing from last year to 2.93% (3.21%).
