ANNUAL REPORT 2007
CONTENTS
CONTENTS 2
JEEVES IN BRIEF 3
CEO’S STATEMENT 4
OPERATIONS, BUSINESS CONCEPT & STRATEGY 6
MARKET 8
BUSINESS MODEL & PARTNER STRATEGY 10
CUSTOMERS 14
CUSTOMER CASE STUDIES 16
MARKET OFFERING 18
PERSONNEL 22
ADMINISTRATION REPORT 24
RISK AND SENSITIVITY ANALYSIS 25
THE SHARE 27
FINANCIAL OVERVIEW 30
APPROPRIATION OF PROFITS 32
INCOME STATEMENTS 33
BALANCE SHEETS 34
CHANGE IN EQUITY 36
CASH FLOW STATEMENT 37
NOTES 38
AUDIT REPORT 49
BOARD OF DIRECTORS AND HOW THE BOARD WORKS
50
MANAGEMENT GROUP 51
HISTORY 52
AnnuAl GenerAl MeetinG (AGM)
The AGM will be held at 5.00 p.m. on Monday 26 May 2008 at Jeeves’ office, 6th floor, Kungsgatan 37, Stockholm, Sweden.
PArticiPAtion
Shareholders intending to participate in the meeting must be registered as a shareholder in their own name in the share register maintained by VPC (the Swedish Central Securities Depository) by no later than Tuesday 20 May 2008, and must notify Jeeves Information Systems AB of their intention to participate. Notification must be received by the company at the address below by no later than 4.00 p.m. on Wednesday 21 May 2008.
AGendA for the MeetinG
The AGM will consider the matters that are required under the Swedish Companies Act and the company’s Articles of Association.
finAnciAl rePorts in 2008 Q1 Interim Report 23 April 2008 Q2 Interim Report 25 July 2008 Q3 Interim Report 24 October 2008
to order finAnciAl inforMAtion
Financial and other relevant corporate information is published at www.jeeves.se. This information may also be ordered from:
Jeeves Information Systems AB
Box 1042, SE-101 38 Stockholm, Sweden Phone: +46 8 587 099 00
Fax: +46 8 587 099 99 E-mail: info@jeeves.se
investor relAtions contAct Bengt-Åke Älgevik, Chief Executive Officer Phone: +46 8 587 099 00
E-mail: bengt.algevik@jeeves.se
distribution
The 2007 Annual Report will be sent to all
shareholders shortly before the AGM. It will
also be available as a PDF file at www.jeeves.se,
under the heading “Corporate and IR”.
3
JEEVES IN BRIEF
Jeeves is a fast-growing Swedish supplier of ERP systems that has established itself in the European market.
Small and medium-sized growth enterprises
Jeeves’ three full-range ERP systems Garp, Jeeves Selected and Jeeves Universal are designed for small and medium-sized growth enterprises with 5-1,000 employees.
High value to business at low cost of ownership Jeeves’ ERP systems are characterised by high value to business and low cost of ownership. They are:
• easily integrated with other systems
• easily adapted to the customer’s unique processes
• easily and quickly upgraded.
Modern platform
Jeeves’ ERP systems are based on a modern technology platform.
Their unique design preserves all customer-specific modifications in every upgrade. The system offers multi-platform support for Microsoft Windows NT/2000/XP/2003, Linux, Unix and Microsoft SQL Server.
Attractive partner model
Jeeves’ business model is based on developing and packaging Jeeves products. Marketing, sales, delivery and support are adapted to local markets and specific sectors and provided to end-users through a highly qualified network of partners.
Highlights of the year
KEY FIGURES 2007 2006
Sales, MSEK 130.1 119.6
Operating profit, MSEK 18.4 10.9
Earnings after tax 14.8 8.2
Operating margin, % 14 9
Earnings per share after tax, SEK 5.0 2.7
Dividend, SEK 1.5 1
• Sales rose by 9 percent (28).
• Profits were the highest yet.
• Jeeves Universal acquired 97 new customers during the year.
• Garp acquired 90 new customers during the year.
• Jeeves continued to expand its international network of partners.
• The Group began recruitment of a new type of partner, Independent Software Vendors (ISVs), i.e. product owners of ERP systems.
• Jeeves Universal was launched.
• A new post in the Jeeves organisation, Services Director, was created and appointed.
N.B. The annual accounts are prepared in Swedish and translated
into English. Should any differences occur between the Swedish
and the English translation, the Swedish version shall prevail.
4 CEO’S STATEMENT
The year 2007 was another good one for Jeeves. Profits were the highest yet. We consolidated our market position and our international network of partners is growing. Over the next few years, we will continue to strive for growth by developing and packaging our products, accelerating expansion of our partner network and through acquisitions.
Jeeves reported pre-tax profits of SEK 18.4 million and our ope- rating margin was 69 percent higher than in the preceding year.
Earnings per share rose by 83 percent. Income totalled SEK 130 million, an increase of 9 percent over the figure for the previous year. Jeeves continues to record stable financial growth. We now have six years behind us in which we have reported profits in every single quarter.
In the past year, we focused hard on market-orienting the com- pany, and we now hold a very strong position vis-à-vis our biggest competitors: Microsoft, SAP, IFS, IBS and Lawson. In Sweden, there is probably no other ERP supplier who secures as many contracts as we do in our segment. Our customer base is expanding with the ad- dition of customers who represent a multitude of well-known brands.
In 2007, 187 companies chose an ERP system from Jeeves.
We have focused strongly on the Jeeves partner programme to expand our network of partners, and this is showing clear results.
We are recruiting new partners in Sweden and internationally, and we are also recruiting new types of partners. Jeeves is evolving from being a leading Swedish supplier
of ERP systems into an European player.
In line with market development
Jeeves is one of the most expansive bu- sinesses in ERP systems, a position that we intend to retain. Client companies in the market are changing rapidly. New strategies, new value chains and new structures are being developed at many enterprises. Flexible ERP systems are
needed to support these processes of change. Companies invest in a new ERP system either because they are outgrowing their existing system or because the old system is too expensive or inflexible.
Inflexible ERP systems that are difficult to upgrade or adapt to new operational needs are a major obstacle to efficiency in a business.
Our perception is that the market is tending to demand the types of value added in the areas where we are a strong player, such as flexibility and upgradeability in an ERP system as well as the importance of a low cost of ownership. We are in line with market development, and it gives us great satisfaction to see proof of this by constantly gaining new customers. We are also winning more and more major customers from large competitors.
Foundations for growth
A major challenge for Jeeves is to maintain our international growth.
In the long term, Jeeves aims to generate growth in four areas. This is being realised by ongoing establishment of Master Partners in Europe, who in turn recruit partners in the local market. We will re- cruit new types of partners, such as Independent Software Vendors (ISVs). We are also working on providing Jeeves ERP systems on several platforms, which will attract new target groups. All this effort is paying off in the form of higher international sales. In addition, we are scanning the market for attractive investment prospects to provide the scope for faster growth in Europe in our segment through acquisitions.
Development of partner model
At Jeeves, we have been working on a Master Partner concept for some years – a model for international expansion in selected
markets. The concept is based on a local market organisation with sound knowledge of local markets for recruitment and support to partners. Our first venture in France has delivered highly satisfactory results. Between start-up in May 2005 and year-end 2007, we progressed from 1 to 20 partners and from around 10 to 60 customers. Establishment of the Master Partner concept in France confirms that our model for establishing ope- rations in new countries is successful. We are in discussion with operators in several countries, which will lead to the establishment of more Master Part- ners. Another partnership format that is figuring more importantly in our expansion is the Independent Software Vendors (ISV). These are companies that own, develop and sell ERP systems, but often find that their customer base demands a more modern solution.
Here, Jeeves ERP systems come in as a replacement for the existing system.
Higher level of product packaging
To deliver higher value to the customer and to ease recruitment of new partners, Jeeves has worked intensively on the development and packaging of Jeeves Universal. The new version features an extensive set of tools that support continuous change in the
2007 was another good year for Jeeves
Jeeves is one of the most expansive
businesses in ERP systems, a position
that we intend
to retain.
5
CEO’S STATEMENT
customer’s operations, including process flows, reports, train- ing material and implementation methodology. The new product enables our partners to deliver customer solutions that heighten efficiency and boost profitability in an even more cost efficient way.
Our partners’ profitability and loyalty
The loyalty of Jeeves’ partners is critical to our growth and inter- nationalisation. We must defend our partners’ profitability. When recruiting new partners, it is important not only to emphasise the excellence of our product, but also to get the message across of how our partners succeed in doing good business with Jeeves.
Partner development is supported by our customer events, part- ner conferences and international partner meetings to facilitate the sharing of experience between customers and Jeeves and between partners. We have started laying out the platform for an “eco-sys- tem”. We are conducting more training programmes together and we have improved policies to manage international transactions.
The result will be improved performance of the “eco-system”. But we are still just on the starting-blocks.
Personnel
In my meetings with co-workers and partners throughout Europe, I am receiving a clear signal that we are on the right track and that the actions we are taking are creating a very high level of com- mitment and a sense of loyalty. This, in turn, will make us an even more attractive business partner. The increasing number of highly experienced people looking for jobs within Jeeves and our partners is a proof of our success.
We have earned large profits that we intend to share with our personnel. We therefore established a clearly performance-linked incentive programme during the year. Our hope is that this will stimulate the interest of Jeeves’ personnel in our business and how we perform. In addition, we hope that it will enable us to attract new staff.
In conclusion, I would like to thank colleagues and partners for the excellence of their work in 2007, and I look forward to growing together with them and with profitability, high standards and strong commitment.
Stockholm, April 2008
Bengt-Åke Älgevik
CEO, Jeeves Information Systems
6 OPERATIONS, BUSINESS CONCEPT & STRATEGY
Operations, business concept & strategy
Business concept
“Jeeves develops flexible, innovative and cost-effi- cient ERP systems for companies wishing to conti- nuously develop their business processes. Jeeves’
ERP systems are implemented by certified partners striving for the highest standards of service and long- term business relationships.”
Our customers share a need for ERP systems that can be adapted to their business; they want to avoid adapting their business to the systems. Over the years, Jeeves’ partner strategy has proved suc- cessful and will play a significant role in our future expansion.
Vision
“Jeeves will be one of Europe’s leading ERP system suppliers in the SME segment.”
Jeeves holds a strong position in the SME segment in Sweden, in trade, manufacturing and services. In Europe, we have scope to strengthen our position, although not at the expense of profits.
Goals
Jeeves’ long-term goal is to become one of the leading ERP sys- tem suppliers in Europe.
The overall financial goals are:
• Annual growth of 15-20 percent
• An operating margin of 10 percent or more.
Goal attainment
Over the past five years, Jeeves has reported growth averaging 27 percent per year. In the same period, the operating margin has averaged 12 percent.
Strategies
Since start-up in 1992, Jeeves has consistently operated in line with five major strategies:
Growth
Jeeves will grow organically by developing sales in existing and new markets and by acquisitions to further secure its market position.
In the future, international expansion will assume a more important role in growth.
Profitable growth
Jeeves aims to achieve an operating margin of at least 10%, com- bined with major investments in products and market expansion.
Market development via partners
Market development, sales and delivery are conducted exclusively via skilled, experienced partners. To Jeeves, it is vital that both partners and end-users see Jeeves as their first choice for ERP systems. Jeeves’ partner model is one of the most important suc- cess factors.
Up-to-date products
Jeeves offers flexible solutions with broad functionality designed for simple adaptation to customers’ operations. To this end, Jeeves focuses consistently on creating products with a very high degree of technical innovation, as well as broad and mature functionality.
Jeeves’ ERP systems are based on smart technology architecture that makes for simple upgrades to new versions; they are also open and integration-friendly.
Motivated personnel and partners
Motivated, creative and skilled personnel and partners are the driving force behind Jeeves as a business and partner. Jeeves’
business model relies on the ability to develop strong business relationships with the company’s different partners. Commitment and enthusiasm among our personnel are crucial to our success.
Jeeves offers user-friendly, high-tech products. This also demands a
great deal of expertise, creativity and experience from the personnel.
KORT OM JEEVES 7
“Jeeves will be one of
Europe’s leading ERP
system suppliers in the
SME segment.”
8 MARKET
Market
Businesses of the future will need efficient and dynamic organisations. This, in turn, will bring increasing demands on the ERP systems required to deliver fast information for analysis and strategic decisions to business management. The ERP system’s capacity for regular re-adaptation to support critical processes and business development is fundamental. Flexibility is the key to success.
Market for ERP systems
ERP systems are the IT systems that businesses and other orga- nisations use to control and follow up their operations. The ERP systems market comprises:
• Sales of licences
• Maintenance
• Hardware
• Consulting and training services.
Customers are drawn from practically all types of enterprises, from different sectors and with needs that vary in complexity. The market is generally divided into three segments: small enterprises (5–50 employees), medium-sized enterprises and corporate groups, and large subsidiaries (50–1,000 employees) and major enterprises groups (> 1,000 employees).
Jeeves develops and markets ERP systems. Sales are targeted at companies in the SME (small and medium-sized enterprise) seg- ment, but also include sub-systems for major corporations. Jeeves has a broad offering of products that are designed for customers in trade, manufacturing and services.
Stable demand for ERP systems
Current growth in the market for ERP systems is stable at a high level. Jeeves’ most important market – Europe – shows the highest value increase and a growth rate of approximately 7.7 percent in 2004–2009, according to Gartner. A survey in Sweden in 2008 by the Radar Group indicates that sales in the Swedish market, including services, will total roughly SEK 9.2 billion in 2008, an increase of 7.5 percent on the preceding year. The forecast for 2009 is 6 percent.
Over the next few years, in excess of 1,750 businesses with more than 50 employees will replace their ERP systems in Sweden, according to the Radar Group. Sales in the Nordic market as a whole are expected to total SEK 22.4 billion. These investments are primarily driven by demands for improvements in operational and employee efficiency, which are relatively independent of the econo- mic cycle. Against this background, Jeeves anticipates that growth will remain stable, despite a downturn in the general economy.
Competition
With a large number of players, the global market for ERP systems is fragmented. Some offer ERP systems covering the majority of an enterprise’s functional areas, such as inventory management, purchasing, production, sales, financial management and HR (Human Resources). Suppliers in this category include SAP, Oracle and Microsoft, as well as Jeeves and Lawson. Other, more niche- based, suppliers concentrate on specific functional areas such as Customer Relationship Management (CRM) and Supply Chain Management (SCM).
Small enterprises need packaged solutions for rapid implementation.
Medium-sized enterprises consist of either a) enterprises and small subsidiaries that need to optimise their business flow or b) large sub- sidiaries that need to optimise their own organisation and integrate with their corporate group.
Major enterprises need different ERP systems for different business processes, but also sub-systems capable of meeting demands for integration, flexibility, adaptability and rapid implementation.
> 1,000 employees
> 500 users
Major enterprises
51-1,000 employees 25-500 users
Medium-sized enterprises
5-50 employees 5-25 users
Small enterprises
Jeeves focuses on
the SME segment
9
MARKET
customers are second- and third-generation buyers. Customer demands on suppliers have increased, the sales process is often long and purchasing decisions are being made at higher and higher levels in organisations.
ERP systems are increasingly business critical Many companies are using old ERP systems that are not meeting their demands for improving business efficiency. To be able to alter their operation, these companies need to develop or replace their ERP systems. Jeeves has identified several important factors that influence decision-makers in their choice of ERP system.
Capacity for development
During change, when customer needs determine how enterprises alter their business processes, the capacity of the ERP system for expansion and adaptation will become an increasingly important competitive factor. An ERP system must be capable of being de- veloped simply and at low cost to meet changes in an operation’s needs, when the business grows organically or through acquisi- tions. Many older ERP systems limit the company’s freedom to act, since the system tends to restrict the business process rather than facilitate it.
Standardisation and customisation
Modern ERP systems allow for standardisation and customisation.
To offer customers competitiveness and to enable differentiation, ERP systems must be adapted to the customer’s unique business processes. At the same time, however, the focus in less business- critical areas should be on standardisation and simplification to keep costs down.
Scope for integration
The ability to deliver the right information to the right person may be vital to an enterprise’s decision-making ability. The ERP system’s capacity for integration with other systems is significant. To all operators in the ERP sector, it will become ever more important to offer users access to applications and functions via the Internet, including Software as a Service (SaaS).
Measuring Key Performance Indicators (KPI)
The ability to use the ERP system for measuring Key Performance Indicators, performing analyses and planning is essential in enabling management to identify and fully utilise their company’s develop- ment potential. The ERP system is a critical prerequisite for suc- cessful growth in expanding businesses.
Europe
In Europe, SAP, Microsoft, Sage and Oracle dominate the market.
Jeeves ranks among the 25 biggest suppliers of ERP systems and, according to Gartner, is one of the fastest-growing suppliers of full-range ERP systems in Europe. In the swedish market we also compete with Lawson, IBS and IFS.
Continued consolidation
Today’s ERP system solutions are becoming increasingly complex.
Product development, marketing and delivery are expensive. The high costs have led to consolidation of the market. SAP, Sage, Oracle, Infor and Microsoft, for example, have grown by acqui- ring competitors. In 2007, mergers took place between IBM and Cognos, Oracle and Hyperion and SAP and Business Objects. A survey by the 451 Group shows that 85 percent of all developers at enterprises are expecting further acquisitions – especially in sector and product niches.
Another way for ERP system suppliers to cut costs is partnership in various forms. Traditionally, ERP system suppliers have had the direct relationship with the customer, and thereby control of the whole value chain. The alternative is a channel strategy, whereby partners sell, deliver and maintain the ERP system, providing greater efficiency and a stronger customer offering, while cost and business risk are shared among several parties. Jeeves has been perfecting this approach for many years. Competitors such as IBS, IFS and Lawson are increasingly moving in this direction, but it requires changes in the established delivery organisation.
Market trends
Trends like globalisation, virtualisation, service-based architectures and rapidly changing markets will radically affect the entire market, say analysts such as Gartner and Forrester. The market for ERP systems is mature, and most customers in Western Europe today have considerable experience in procuring ERP systems. Many Market shares in Sweden – value of new licences
Visma 6 % SAP 24%
Other 8%
Jeeves 6%
Microsoft 6 % Oracle 8%
Lawson 17%
Agresso 17%
IFS 8%
Source: Radar Group
JEEVES ANNUAL REPORT 2007
10
Customer
1. Services 2. Licenses 3. Maintenance
Partner
1. Licenses 2. Maintenance 3. Services
Master Partner
1. Maintenance 2. Licenses 3. Services
Jeeves
Kund
1. Service 2. Licenser 3. Underhåll
Partner
1. Underhåll 2. Licenser 3. Service
Master Partner
1. Licenser 2. Underhåll 3. Service
Jeeves
1. Underhåll 2. Licenser
BUSINESS MODEL & PARTNER STRATEGY
Business model and partner strategy
The Jeeves business model has formed the basis of the company’s market strategy ever since start-up in 1992 and has been progres- sively developed and strengthened. It stems from the principle of allowing every partner in the value chain to concentrate on their foremost strength:
• Jeeves focuses on packaging and maintenance of the software, marketing as well as supporting partners. Jeeves continuously develops the software and ensures that partners have access to effective skills development and support for sales and delivery.
• In strategically important countries, Jeeves is represented by Master Partners. A Master Partners builds a local brand by establishing a network of resellers which it supports in their sales, maintenance and service of Jeeves ERP-system.
• Partners sell and deliver products and support local customers within a specific, clearly defined market segment. In Sweden and certain international markets, Jeeves operates directly via local partners.
Jeeves and the company’s network of partners focus to differing degrees on different tasks: product development, licence sales, implementation, maintenance and administration. As a result, the network constitutes an efficient value chain for reaching Jeeves’
customers. Every partner can focus on its market segment and adapt Jeeves’ ERP systems to its specific customer groups.
Jeeves’ business model creates unique value for customers, partners and for Jeeves. Work is distributed over a network of suppliers, each of whom focuses on their part of the value chain and does what they are best at. This creates substantial value, all the way from product development to sales, delivery and support.
Jeeves Partners – the real specialists
The Jeeves circle spans about 550 committed employees in locally based partner enterprises that can deliver and adapt products to the customer’s particular requirements, promptly and with great proficiency.
Jeeves Partners play a major role in the company’s growth and success. Jeeves Partners form the network of dedicated resellers who actively sell, deliver and service the company’s ERP systems to customers all over the world – in Sweden, the rest of Europe, North America, Australia and parts of Asia.
Jeeves Partners are experts – many have more than 10 years’
experience of Jeeves ERP systems. They also specialise in dif- ferent sectors and the business needs of those sectors. This offers Jeeves’ customers access to highly adapted ERP systems, in association with partners who have in-depth understanding of the company’s success factors.
Jeeves’ partner models
Jeeves has always worked with partners. As Jeeves has developed and acquired an international market focus, two primary models have been established for partnership collaboration: Jeeves Master Partner and Jeeves Partner. The way the models are applied de- pends on how strategically important the market is to Jeeves.
Income streams in the value chain
The illustration indicates the size of income streams for the respective player.
11
BUSINESS MODEL & PARTNER STRATEGY
Jeeves Master Partner
The Jeeves Master Partner model is used in strategically important countries where a strong, local organization has been found.
The local organization is called a Master Partner. Using their local market knowledge, the Master Partner builds up a network of part- ners. These receive assistance in their local language in the form of marketing, sales, technical support and training. Vis-à-vis their partners, a Master Partner takes on the roles that are assumed by Jeeves in the Swedish market, apart from product development.
Master Partners may either be totally independent of Jeeves, ope- rating under their own name, or they may be owned/part-owned by Jeeves and operate under the Jeeves brand.
Jeeves Partner
Our original partnership model, Jeeves Partner, is used above all in Sweden, where around 20 partners sell and deliver the various ERP systems supplied by Jeeves. Internationally, the Jeeves Partner mo- del is used in markets where we see good but limited potential for growth, or where Jeeves not yet has had the capacity to establish a Master Partner.
New types of partner
In 2007, Jeeves also began to recruit two new types of partners, ISVs (Independent Software Vendors) and VARs (Value Added Resellers).
ISVs – Independent Software Vendors are companies that own, de- velop and sell an ERP system. Many ISVs today base their offering on an outdated ERP system. Both the existing customer base and new customers will need a more up-to-date solution, but that often requires major investments. With the customisation options that Jeeves offers, Jeeves ERP systems are an excellent choice for an ISV requiring a replacement for its existing system.
VARs – Value Added Resellers are partners that elect to deve- lop their own packaged software based on, or specially built for, Jeeves’ products. Such products may then be sold by other partners if a VAR desires. Packaged Solutions Providers are an example of partners who build Jeeves-based solutions that can be sold by other Jeeves Partners.
Flexibility in partner strategy
VAR
Partner
Jeeves
ISV
Customer
Customer
12 BUSINESS MODEL & PARTNER STRATEGY
Growth with Master Partners
Jeeves’ principal sources of income are licensing and maintenance (one-year contracts for new versions and support). Of the two, maintenance represents the most important income stream. At partners, income is dominated by licensing and service. When a Jeeves partner sells an ERP system, total income is shared bet- ween the partner, the Master Partner (if applicable) and Jeeves.
On average, Jeeves receives 10 percent of the final sales figure.
Jeeves’ income distribution
Jeeves is a growing enterprise. The investments made in product development and establishment of an international distribution channel, as well as in Master Partners, are long-term and return in the short term is limited. As a result, the company is balancing long-term investments with the shorter-term income flow in order to maintain continuous profitability alongside sound growth, in line with the company’s objective. Sales conducted directly via established partners today account for the major share of Jeeves’
sales and growth.
The Master Partner model is important in generating long-term growth outside Sweden. When a new market is developed with the aid of a Master Partner, the latter receives a larger share of income during a build-up phase. Normally, it takes 3-4 years before Jeeves can benefit from more substantial income. Once a Master Partner has succeeded in becoming established in a market, Jeeves can scale up licence sales with limited investments of its own in marke- ting and sales.
Partner model generates value for all parties
Jeeves’ offering to partners
Jeeves has a highly developed and packaged offering for its Partners. This offering creates effective and profitable conditions for Partners to take Jeeves’ products to the market.
Jeeves’ attractive partner programme offers partners support throughout the process of establishment, marketing, sales and customer care. During the establishment phase, it is important for the partner to quickly learn how to sell and deliver Jeeves’ products efficiently and with a high standard of service. We offer training pro- grammes to both sales personnel and consultants, together with an advanced product that is packaged for efficient sales and delivery.
Jeeves income flows with Master Partner
Jeeves income flows with traditional Partner
Establishment of a Master Partner is a long-term investment, in which the return accruing to Jeeves, in the form of licence income, only becomes sub- stantial after about three years. In its other partnership operations, a tangible return is obtained as soon as in the first year.
Others 1%
Licences and maintenance 86%
Consulting services and training 13%
Income distribution 2007
1 2 3 4 5
Underhåll Ackumulerat Licenser
Ackumulerat
Licenser Underhåll
1 2 3 4 5
1 2 3 4 5 6
No of customers Maintenance Licenses
0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0
1 2 3 4 5 6
No of customers Maintenance Licenses
1 2 3 4 5 6
Antal kunder Underhåll Licenser
0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0
1 2 3 4 5 6
Antal kunder Underhåll Licenser
1 2 3 4 5
Underhåll Ackumulerat Licenser
Ackumulerat Licenser Underhåll
1 2 3 4 5
1 2 3 4 5 6
No of customers Maintenance Licenses
0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0
1 2 3 4 5 6
No of customers Maintenance Licenses
1 2 3 4 5 6
Antal kunder Underhåll Licenser
0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0
1 2 3 4 5 6
Antal kunder Underhåll Licenser No of customers
No of customers
Year
Year
13
BUSINESS MODEL & PARTNER STRATEGY
Strong and clear branding, as well as lead generation tools, are essential in managing effective lead generation. Jeeves provides a manual on communication of the Jeeves brand. It also includes various ready-made campaigns and messages for use by partners.
Sales activities require a high level of skill and an effective demon- stration environment. Jeeves offers various types of expert as- sistance as support in the sales process. Jeeves has a number of ready-made environments for conducting standard demonstrations, and helps partners via a programme for effective management of major customers. Jeeves’ future plans include the launch of more advanced services to support partners’ customer solutions.
Effective channel expansion
Jeeves’ training function – Jeeves Competence Centre (JCC) – conducted a total of 108 partner training days. Jeeves Academy, a trainee programme in association with a number of Jeeves’
Swedish partners, was conducted at the end of 2007. A total of 19 recent university graduates qualified as Jeeves consultants.
Another Jeeves Academy is planned for 2008, in collaboration with various partners. In addition, the first Turning Jeeves programme will be conducted in 2008. This is a skills development programme designed to train experienced ERP consultants in the Jeeves system, and thereby “transform” them, quickly and effectively, into successful Jeeves consultants.
Master Partners Partners
Jeeves partners in Europe
14 CUSTOMERS
Customers
In 2007, more customers than ever chose a Jeeves ERP system. More and more companies value the Jeeves approach, with solutions and projects that quickly reach completion, with minimal consultancy input. When customers choose a Jeeves ERP system, the persuasive arguments are a quick return on their investment and the low overall cost of ownership.
Strong at home
Jeeves holds a strong position in the Swedish market, where the company has successfully attracted expanding enterprises via its ERP system concept. Alongside its partners, Jeeves is a well-known and established supplier of ERP systems in trade, manufacturing and services. In specific niches, such as textiles and ready-to-wear clothing, Jeeves has a market leading position with Garp, based on the system’s module for variant management. In specific customer segments, such as suppliers to the automotive industry and Injection Moulding, Jeeves Universal (formerly Jeeves Enterprise) offers competitive industry solutions developed by Jeeves Partners.
International expansion
As Jeeves’ customers have increasingly grown in size, with more complex processes and in many cases global operations, Jeeves Universal has been developed and localised for additional inter- national markets, notably in Central Europe. One example of this is the company HL Display – Jeeves maintains the latter’s ERP system in around 20 countries. Customers in the Swedish market still account for a dominant share of the total, but the number of international customers has grown, and will continue to grow as international Partners produce results.
ERP systems for SMEs
Jeeves’ ERP systems are designed for customers across the entire SME segment, and to meet different demands from different customer categories, Jeeves has adjusted it’s offering to meet the specific requirements of the small as well as the medium-sized enterprises.
Jeeves Universal for medium-sized and large enterprises
Jeeves Universal is mainly supplied to medium-sized enterpri- ses, corporate groups and subsidiaries. To these customers, it is imperative that the system is flexible and readily adaptable to the
company’s business processes, now and in the future. In major corporate structures, it is vital for the system to be simply integra- ted with the other systems used in the group. Low cost of owner- ship is a highly important issue, since customers will be seeking ERP systems with a long service life. Jeeves Universal has been on the market for 14 years, and Sweden still accounts for the majority of its customers.
Garp or Jeeves Selected for small enterprises In the small enterprise segment, sales are primarily to companies in Sweden and Norway. Through its Garp ERP system, Jeeves has secured a strong position in this segment. Garp is designed for small enterprises with an expressed ambition to expand and develop their business. They seek a solution based on a standard system that is also adaptable to their specific requirements. Small enterprises need short start-up times for system installation, simple updates and close proximity to support and service.
Drawing on its experience from Garp, Jeeves has created a strong offering for small enterprises. Jeeves Selected for small enterprises will be launched in 2008, built on the same platform as Jeeves Universal. This will make it simple to switch from Jeeves Selected to Jeeves Universal to meet changing business demands.
At the same time, Jeeves Selected will be an attractive option for corporate groups with small subsidiaries, where the parent com- pany uses Jeeves Universal. New sales of Garp are ongoing, and for Garp’s customer base, maintenance and development of the system will continue, along with support and service.
Small enterprisesLarge-sized enterprises
KappAhl Lindex
Alfa Laval
SSAB SOS Alarm
Medium-sized enterprises
Bewator NetOnNet Papperskedjan
Finndomo Securité Tylö
Anovo Nordic CDG Sandberg Textilia Tvätt Brunngård Group
Röhnisch
Värnamo Sängkläder
IRE Möbel Lideco Segers
Fristad Express Grytnäs Gräv Trailerservice
Trade Manufacturing Service
Some of Jeeves’ customers
15
CUSTOMERS
Loyal customers
Jeeves’ flexibility, upgradeability and low cost of ownership have engendered strong customer loyalty, to both Jeeves Universal and Garp. Since the company was established, only a few customers have left Jeeves. In the same way, Garp has a large number of customers who have stayed with the system since launch. Garp’s longest-standing customer has been using the system for 23 years.
If a customer leaves Jeeves Universal or Garp, it is generally be- cause of changes in corporate circumstances, such as acquisition, merger or closure.
Costs are the determinative factor
According to a survey, by Radar Group, of 253 Swedish compa- nies, the cost of an upgrade is one of the most crucial individual factors considered when a business decides to upgrade its ERP system. In a comparison of the IBS ASW, IFS, Jeeves, Movex and SAP systems, Jeeves entailed the lowest upgrade cost per user.
Jeeves stores all adaptions made to the standard system in a sepa- rate database. When the system is upgraded, all adaptions made to previous versions are automatically included into the new version of the system. This significantly reduces the cost for an upgrade.
An upgrade of most of the competing systems includes reprogram- ming of all customisations made previously, which is expensive as well as time consuming.
0 25,000 50,000
Movex 27,000
2 000 SAP R3 IFS IBS ASW Jeeves 45,000
30,000 35,000 SEK
Source: Radar Group
Cost per upgrade and user
“Our customers are SMEs that have grown and developed using our systems – many of them for more than 10 years.”
Customer base
Garp Jeeves
New customers 2007 90 97
Installed base 2 048 1 783
16 CUSTOMER CASE STUDIES
SCA Packaging has it all wrapped up with Jeeves
DElIVERING CUStOMER bENEFIt
In the past: 11 systems, partly developed in-house and on an outdated platform, operational worries and lack of integration, difficult to upgrade.
Now: Modern and efficient operations support that integrates the operation and reduces the number of applications, at lower total cost of ownership.
No. of users: 325 users (initially) Using Jeeves
since: 1997
SCA Packaging Sweden had used an ERP system, developed in-house, for a long time before the system’s shortcomings became obvious. The decision to implement Jeeves made SCA Packaging a more competitive company with heightened information ma- nagement efficiency.
SCA Packaging works throughout the whole packaging chain, which includes design and production of packaging as well as improvements to customers’ logistics. SCA Packaging Sweden has used the Jeeves ERP system in limited parts of its operations for several years.
Jeeves has already implemented, developed and provided sup- port for solutions that handle ordering, warehousing, invoicing and purchasing in three SCA Packaging divisions. The company is now expanding its use of the Jeeves solution to encompass the entire business.
Integrate the employees with the operation
SCA Packaging Sweden needs a system that integrates the opera- tion and offers coordination benefits in all units – as well as controlling the entire process, from design to finished product.
The Jeeves solution is now process-optimised to support SCA Packaging’s business. The information flow from a business enquiry/
request via graphics, design and calculation to customer orders, now takes place based entirely on processes in Jeeves.
“The fact that we’ve now grouped our processes in one single system means that we can maintain a much higher service level.
Our operation is integrated and our employees are integrated in it,” says Håkan Andersson, IT manager at SCA Packaging for the past 10 years.
Operations support in several areas
Production is one of several fields in which Jeeves’ ERP system benefits the company. The solution has enabled SCA Packaging Sweden to implement system integration within several production areas. The ERP system is now linked to the 100-metre long cor- rugated cardboard making machines.
“In the Jeeves solution, we’re directly connected to these large corrugated cardboard making machines. When we receive an order, it’s registered in the ERP system and then goes directly to the right machine,” explains Håkan Andersson.
The unloading procedure is another business process that is efficient with Jeeves. SCA Packaging makes 200 million square metres of corrugated cardboard per year, but it’s impossible to have such large warehousing facilities. As soon as the product is fi- nished, it leaves the factory and is delivered to customers or stored at forwarding agents.
“We have equipped the forwarding agents with handheld com- puters that communicate with Jeeves and show what needs to be delivered as well as reporting what has been delivered,” says Håkan Andersson.
Cooperate close to the customer
With its partner SYSteam, Jeeves has worked to achieve IT support changes throughout SCA Packaging Sweden. The first step was to develop a prototype to evaluate whether there was support for a system based on standard systems.
“In order to focus on developing cost-effective system support for all the customer’s business processes, you need close coopera- tion and a flexible solution that can adapt as the operation’s needs evolve,” says Anders Gidlund from Jeeves’ partner SYSteam.
Cost-effective coordination benefits
Anders Gidlund points out that with Jeeves in his portfolio he can feel confident in telling a customer, “Together we can find out how you run your business and what system support you need to optimise it.”
“Jeeves’ cost-effective solutions guarantee a dynamic develop-
ment opportunity at low cost of ownership. Other ERP systems may
perhaps also be able to deliver comparable operations support,
but definitely not at the same low cost of ownership,” emphasises
Anders Gidlund.
17
CUSTOMER CASE STUDIES
Tylö warms up with help from Jeeves
New growth objectives called for a new IT platform. With a full-range, flexible and upgradeable ERP system from Jeeves, Tylö has become a much more productive and cost-effective company.
Tylö is the world’s leading manufacturer of sauna, shower and steam bath systems, with a strong brand. The company’s success is based on Tylö offering products and services of the very best quality. The company has a strong entrepreneurial culture and has been family- owned since the 1940s. Exports account for just over 75% of total production. Sales are conducted in more than 80 countries in every part of the world. A focus on growth was sharply boosted when a new Board was appointed at Tylö in 2004. Since then the company has maintained a goal-oriented focus on development of production and of products. But new growth objectives called for a new ERP solution based on a flexible IT platform – which is where Jeeves came into the picture.
System solution for a growing company
Today, Tylö works in an entirely new way to generate growth. One prerequisite for this is that the organisation has the IT-based ope- rations support it needs. To achieve its goals, Tylö replaced its old ERP system two years ago with Jeeves to obtain a comprehensive system that is both flexible and upgradeable. Four options were assessed: Movex, Jeeves, Axapta and an upgrade of ASW, before Tylö chose Jeeves.
“With Jeeves, Tylö is significantly more productive and cost- effective. The company can now accelerate its organic growth via more efficient control of order processing, and we also gain support in developing new products through Jeeves’ various processes,”
explains Emil Tambolas, IT manager at Tylö for the past nine years.
“In the two years that we have had Jeeves, many new functions have been introduced for better support to users in their daily work.
We have also further-developed the system to suit our operations as we have grown and evolved,” he adds.
At Tylö they say they have benefited more from Jeeves in two years, than in six years with their previous system. Tylö’s sales rose from SEK 260 million last year to SEK 335 million this year.
Broad functionality
In the past, Tylö’s order backlog stretched 12-16 weeks into the future. Today, it is just 1-3 weeks; everything is delivered on time and the heightened efficiency has helped sales to rise by 10-15% a year.
Jeeves’ functionality has made it possible for Tylö to achieve enhanced control of inventories, manufacturing and planning. The
employees now have an overview of what to prioritise and when to do it.
“We can always give customers correct delivery information, and we have nearly everything in stock,” says Mr Tambolas.
Tylö uses most of what Jeeves ERP system offers such as pro- duction, order processing, inventory control, invoicing, service and project management.
E-commerce launch in record time
With Jeeves solution, Tylö has also been extremely active in product development. It has launched products with help from Jeeves at a pace not previously possible. In the winter of 2007, a B2B project was initiated and online trading started. The e-commerce module took just a month or so to go live.
“It’s totally amazing, because we looked into it with our previous system and it was totally inconceivable to complete such a compre- hensive project in such a short time. But the Jeeves solution helped us achieve it,” says Emil.
Complexity sets tough demands
Manufacturing of Tylö products takes place in a factory in Halm- stad, Sweden, and another in Finland. Historically, the company’s philosophy has always been to manufacture its products in-house. Its products therefore involve a high degree of processing, the majority of which is performed in Tylö’s own factories. This sets tough de- mands on logistics, planning and purchasing. Tylö needed a system that could be used in all parts of its operations.
“Our system support for the business used to be poor and our large inventories used to tie up a lot of capital,” explains Emil.
The company developed its functionality with Jeeves 9.2 and is now waiting for the next version. “But to us it feels like we are con- stantly upgraded,” concludes Emil Tambolas.
DElIVERING CUStOMER bENEFIt
In the past: Weak system support with limited flexibility to grow. Tied up capital in inventories.
Now: Broad functionality supporting growth and profitability.
No. of users: 80 Using Jeeves since: 2006
18 MARKET OFFERING
Jeeves for SMEs
ERP system to grow with
Jeeves’ offering caters for the entire SME (small and medium- sized enterprise) segment. One important category in this segment is growth enterprises. These enterprises often expand fast and need a solution that is easy to use from the start and covers basic requirements in different areas such as sales, logistics, production, business administration and services. As these enterprises grow, so does the complexity of their business and therefore also the demands for increased functionality, scope for integration with other systems at subsidiaries, suppliers and so on. In the experience of many customers, this has often forced growth enterprises to replace their entire ERP system, an exercise that is both expensive and difficult in a growth phase.
Jeeves has adapted its market offering to meet the needs of both SMEs and growth enterprises. Today, Jeeves offers three complementary ERP systems.
Jeeves Universal and Jeeves Selected
Jeeves Universal is designed for medium-sized enterprises and subsidiaries that need to integrate with their parent company’s operations, and major enterprises with more than 500 ERP system users. Jeeves Universal customers have complex operations based on several different business processes, which affects their need for adaptation and integration. Jeeves Universal is a modern ERP system in which the customer’s operations and processes guide the way in which the system is structured. Jeeves Universal inclu- des a wide range of options for adaptation. The system offers a role-based user interface that integrates information and application support from the ERP and other systems with the specific role in the operation. The user benefits from powerful support in perfor- ming his or her duties.
Market offering
Installation of a Jeeves ERP system will quickly yield a return on the time and money invested, and over time Jeeves offers the lowest cost of ownership. Customers also benefit from a mo- dern system that supports and keeps pace with the company in its development.
Jeeves Selected, to be launched in spring 2008, targets small enterprises with an ambition to grow and expand their business.
It is the first step into the Jeeves world. A step that enables use of the same basic technology and system architecture as the more advanced Jeeves Universal, but with fewer applications, and certain limitations in flexibility. When the expanding enterprise then takes the step to adopt the larger, higher-functionality system, a smooth progression is assured, since the building-blocks of the two systems are the same. The customer grows “seamlessly” into the larger suit, at the pace required by the business.
Garp
Garp is designed for small enterprises with 5-100 employees. It is mainly targeted at manufacturing and trading companies and is a full-range business system with a large number of optimised business flows, from customer and supplier relations, logistics and production to annual accounts.
Continuous development of Jeeves ERP systems
Jeeves is constantly developing its customer offering. In autumn 2007, Jeeves Universal was launched as a replacement for the Jeeves Enterprise system. Jeeves Universal introduced the role- based user interface and a structure that supports a process-based approach at customers.
Jeeves Selected strengthens the offering to small, growth enter- prises who are seeking a more standardised form of ERP system and who in the long term want to be able to switch to Jeeves Universal easily. Initially, Jeeves Selected is available for customers in trade and distribution and will later be developed for companies in manufacturing and service.
Garp is a system that offers broadly-based and highly-developed
functionality. The program is continuously developed and maintai-
ned to meet the needs of Garp’s extensive existing customer base.
19
VISION & StRAtEGY
Management functions
PRODUCt DEVElOPMENt
Product, Product range, Services
bUSINESS DEVElOPMENt
Marketing and Sales
MAKE PRODUCt AVAIlAblE
Logistics, Production, Services
SUPPORt PROCESSES
Business Administration and Infrastructure
CEO CFO
Production Director Sales and Marketing Director
Purchasing Director Services Director
Product Manager Commissioning Engineer
Marketing Assistant Sales Developer Key Account Manager
Material & Production Planner
Production Personnel Purchaser
Warehouse Personnel Supply Chain Manager Project Manager Project team Member Service technician
Finance and Accounting Assistant
MARKET OFFERING
Role-based user interface – Jeeves adapted to user’s role
Enterprises today are increasingly organising themselves around
their processes. Jeeves Universal is tailored to the user’s role in the
company’s process. With Jeeves ERP systems, every employee is
associated with a role in the system in which the functions, flows
and information required are defined and easily accessed. The
system is easily learned and user-friendly, and at the same time it
enhances the efficiency of every employee. Jeeves divides the roles
into the above processes.
20 MARKET OFFERING
Jeeves = major value to business at low cost of ownership
Jeeves’ objective is that the value to business delivered should always exceed the ownership cost significantly. This equation is based on an important characteristic: flexibility. Jeeves’ customers should be able to live with and expand with their ERP system solu- tion for many years, which is why the system must be flexible.
Jeeves is flexible as it is easily adapted to an operation’s require- ments, simple to update to new versions, and integrates smoothly with peripheral systems.
Easy to adapt
All companies aim to be unique and more successful than their competitors. It is important that the ERP system is easily adaptable to support the customers’ unique and differentiated business proces- ses. The way Jeeves is structured means that customer-specific adaptations can be performed very easily. This adaptation work is often a rapid process requiring limited consultancy input, while minor adjustments can be made by the customers themselves. The adaptions do not need to be re-programmed when performing future upgrades.
Easy to integrate
An ERP system must be long-lived and must be able to commu- nicate with a series of different systems and products during its lifetime, for example at other subsidiaries or with other peripheral systems. Jeeves ERP systems are designed for effective integra- tion with practically all the most-used products in the market. This compatibility is thanks to Jeeves’ unique architecture, based on openness and standards.
Easy to upgrade
Jeeves is unique in that you can store all adaptions made for the client separately from the standard system. This enables you to easily upgrade the system without re-programming previously made customizations. As a result, Jeeves’ customers often choose rapid implementation of the latest version of the system in order to always have access to the latest functionality.
With many other ERP systems, the upgrading process involves so much work and cost that many enterprises steer clear, and keep an older version of their system. As a result, they restrict their capacity for development of their processes and their business.
Value to business quickly exceeds cost of ownership
The overall effect of the above characteristics is that Jeeves’
solutions offer a very low total cost of ownership (TCO). Jeeves’
customers only need to spend a fraction of the time and money that users of competing systems spend on system adaptations and upgrades. With a modern ERP system that supports and keeps pace with the company’s development, this means that the value to the business significantly exceeds the cost of ownership. With Jeeves ERP systems, customers obtain a quick return on their investment!
Customers’ need for freedom of choice determine the choice of technology
Customers’ need for freedom of choice and need to improve their way of doing business determined Jeeves’ choice of technology.
The choice of platform, architecture and program code at a funda- mental level has considerable impact when customers ultimately use the system. In Jeeves ERP systems, every building block is selected for its potential to create flexibility for the customer and adaptability to specific requirements.
Platform-neutrality is the goal
Jeeves ERP systems function with the most commonly used platforms in the market, Microsoft and IBM. Jeeves Universal, Jeeves Selected and Garp are all platform-independent and will be available to run on both Windows and Linux in the future. This of- fers great freedom of choice for customers and partners who have already chosen their platform.
Jeeves ERP systems Upgradeability Flexibility
Major value to business
Low cost of ownership
21
MARKET OFFERING
Multi-layered architecture offers flexibility
Jeeves has from the outset been developed for ease of adaptation and upgrading. The system’s architecture is built in a way that makes it easy to carry out adaptations and upgrades of the system, which sets Jeeves apart from several of its competitors. Most ERP systems in the market are source code based. This means that any adaptations that the customer wants must be implemented in program code. When an upgrade is required, these adaptations have to be re-programmed in the new version, a process that is not only time-consuming but also costly. Adaptations in Jeeves are never made in components supplied by Jeeves, but are stored and described in a site repository. Adaptations are managed by a separate reference directory that is left intact during upgrades. A new version is installed simply and adaptations are re-introduced automatically without manual intervention by “copying” code from the previous version to the new one.
Modifications are simple. As a result, customers can afford to adapt their system continuously, so that it always meets the organisation’s actual needs.
Up-to-date, open technology
Jeeves ERP systems are based on open standards and increa- singly on open source components. This means that technical applications can be developed jointly with enterprises and organisa- tions, in what is known as communities. To facilitate integration with other systems and to avoid inflexible interfaces, modern, standard technologies are deployed.
Portals and Web interfaces
To make it easy for users to access the information maintained in
the ERP system, Jeeves offers portal solutions and Web inter-
faces. Web interfaces can be configured to allow for creation of
B2B systems, in which selected information is collected from the
system by a customer’s external partners. Portals may be used
to offer customers and suppliers a selection of information from
different systems via a common workspace (comparable with the
Windows Desktop). This information may be from Jeeves, other
ERP systems, Business Intelligence tools or system tools such as a
calendar. The information can be tailored to the requirements of the
particular customer or supplier.
JEEVES ANNUAL REPORT 2007
22 PERSONNEL
Personnel
With goal-oriented and committed personnel, Jeeves continues to grow as an enterprise.
New and creative thinking makes us a partner that is constantly developing and delivering innovative solutions.
Corporate culture and leadership
Right from the start, Jeeves has been driven by an entrepreneurial spirit. Openness and a positive attitude characterise the Group.
Morale is high and our people are “hungry” to constantly improve our products and market offering.
Leadership at Jeeves is characterised by a flat organisation with an open dialogue between management and personnel. All members of staff take part in performance appraisals with their immediate superior, during which personal goals, training require- ments and other issues are discussed.
In Jeeves’ expansion, the structure of the company’s organi- sation has also developed, although not at the expense of the creativity that is the company’s hallmark. Our work processes have been strengthened, partly through further refinement of the quality assurance system.
Jeeves is a knowledge-based enterprise in which the experience and expertise built up by its personnel over many years have strongly contributed to the company’s success. Several members of staff also have experience of other ERP systems from earlier employment.
Number of employees
The total number of employees in 2007 averaged 91 (102), of whom 30 (31) were women. Staff turnover increased during the year to 17% (4 percent). Most departures took place in the first half of 2007, above all as a result of strong demand for skills in the IT sector. The situation stabilised in the second half-year, and through recruitment our range of personnel is now fundamentally in phase with the organisation’s needs, even though certain positions have yet to be filled.
The majority of Jeeves’ personnel has an academic back- ground. The average cost of training per employee was approx- imately SEK 73,000. Value added per employee was around SEK 955,000 in 2007.
HR statistics 2007 2006
Total number of employees (31 December) 91 104
Number of women 30 30
Number of men 61 74
Average age 39 40
Value added per employee kSEK 955 kSEK 783
Training cost per employee kSEK 73 kSEK 84
Personnel per function
Utveckling Produkt Marknad Services Ledning/
30,0
12,1
10,1 8,5
30-50 50-
56,7
17,3 16,7
Develop- ment
Products Marketing Services Management/
Admin.
32,0 30,0
12,1
7,1 9,5
30,0 30,0
12,1
10,1 8,5
30,0
