CLIENT

C. & G. Carandini S.A. is a company founded in 1919 with years of experience in the industrial and technical illumination sector. Since 2000, it has belonged to the Acuity Brands industrial group with headquarters in Atlanta which employs more than 15,000 workers all over the world. Carandini’s influence market is mainly based on the sale of illumination solutions in the Spanish, Portuguese and French markets.

SITUATION

Carandini has information in two non-linked databases. On the one hand, a SQL Server with its own CRM management system, customized for managing the commercial area. On the other hand, it has its own AS-400 and ERP for the operating and financial management.

The objective was to exploit the information of the two platforms to keep all the departments informed.

The main challenges faced were:

• they had too much information fed into the system and this gave them little visibility of the business;
• the database queries were complicated and they had difficulties maintaining the information,
• they lost a lot of time formatting and preparing reports in Excel format,
• there were a lot of departments totally unaware about their management

SOLUTION

To resolve the entire reporting problem, they started a tool assessment process. Out of all the tools, they assessed, for example, Crystal Reports or Hyperion; they found that most of them involved a lot of parameterization making the tool unfeasible for Carandini. Furthermore, another barrier for making this decision had to do with the price, which in some cases entailed a too pricey investment.

According to Sergi Muñoz, Carandini’s Director of Controlling, the key reasons that lead them to chose the DataCycle Reporting solution were ( in order of importance):

• Having the user interface in Excel considerably minimizes the training costs for all the users, only having to focus on the training of a very small group (designers and administrator). Furthermore, the fact that the user interface is in Excel also greatly minimizes the technological impact when implementing a new tool in the company and contributes to the acceptance of the new system.
• Easy parameterization
• Price
• Immediate implementation
• Results straight away

In its implementation, the DataCycle Reporting solution has been taken to the majority of the organization’s departments: Commercial, Finance, Operations, Controlling and IT. Amongst all the reports that have been automated, the following can be highlighted: order input and output, warnings on critical orders, order portfolio status, sales statistics for the commercial area, budget control reports or effects portfolio control reports, amongst many others.

DataCycle Reporting provided them for example with these improvements:

Account Management: When an invoice has exceeded the due date, the system sends, automatically, a report that alerts the rep that the client has not paid it yet. Before there was only proof in the Finance Dept., and now the reps can help the Finance Dept. to reclaim payments from their clients and they are aware of a fact that they did not know before, and furthermore can help them in negotiations.

BENEFITS

Thanks to DataCycle Reporting, Carandini has achieved significant time savings by generating the reporting, automatic information introduction by department and by employee and a total alignment in the objective control needs and priorities between departments.

In short, these are some of the benefits the solution has provided the company with:

Savings in communication times, thanks to the distribution of automated reports that the users directly receive in their electronic mail.

It improves the time for responding to any problem, with the automated distribution of reports and alerts that alert the users of deviations and unexpected events.

Unification of information criteria. Before, there could be different results from the same information. Now DataCycle Reporting integrates the data from all the systems in Excel templates in an automated way ensuring that the information the users receive is homogeneous.

The island of “privileged” information have been broken, thanks to the capacity for spreading the information en masse and everybody is informed of the management of their area, whilst before only a small group of persons had the information.

Increase in the quality of information entered in the system.

CONCLUSIONS

According to Sergi Muñoz, Carandini Director of Controlling: “The improvement in the management has been so significant that we consider not receiving information for more than three days a very critical situation”

Sometimes we hear in our consultancy actions that it is not a good moment to start certain projects for a Company as they are undergoing changes: (1) New Board of Directors, (2) Strategic changes, (3) Recent merger, (4) Changes in systems, ...and this is true for many types of projects, except for the Balance Scorecard project.

With a few exceptions, building and finishing a Balance Scorecard during processes of change is a good decision. We can find the reason for this in the current definition of what a Balance Scorecard is and what it is used for:

A Balance Scorecard:

1. Is a management tool

2. It is integrated with strategic planning, with the decision processes and performance analysis of a company.

3. It is used to monitor the execution of strategic and operating plans

4. Through the tracking of key objectives, projects and indicators

The Balance Scorecard contemplates several perspectives of the plan to be carried out: (1) Financial, (2) Market and clients (3) Internal business processes (4), their competences and knowledge (5) Our current business culture (6) Our information systems, (7) The projects necessary for activating the change, (8) The results expected from this change, (9) The partial intermediate objectives during the change.

Therefore, A Balance Scorecard is a tool for executing the change and measuring its progress. We only have to define that the plans the Balance Scorecard manages be precisely the change plans. The definition process of an Balance Scorecard requires following a very methodical and logical structure, where the important key points are set and very healthy discussions are held on the details of the execution, in other words a theoretical plan will be converted into practicable plan for the Company’s present reality.

Strategy maps are diagrams that draw a company or department’s strategy, and we could say that they are the strategy’s “plans”, which like building plans are used to discuss, communicate and check the suitability and adjustment of the strategy before carrying it out.

From the four typical perspectives from the Kaplan and Norton model in a strategy map, the fourth is normally called “Learning and Growth Perspective”, “Impulse Perspective” or “Potentials Perspective” amongst other names and is the most important perspective, as they are foundations on which all the strategy are based on. It is structured in:

I. Human Capital: The team, their skills, motivation, and knowledge and talent we have.

II. Information Capital The information the people have available for working with. Often related to IT and technology.

III. Organizational Capital: The organizational processes we have, leadership, habits, etc.

Well then, it is in the first point “Human Capital” that the competences play an important role. We will first see that it is not necessary to assess the Human Capital of all the company (that will be HR’s job). What we are really interested in is seeing which work post families are relevant for the strategy we are defining. Given a specific strategy, we can normally find 3 or 4 large families, representing the key part of all the available HR. They could be for example: sales team, marketing, customer services and technical service, in a hypothetical customer oriented strategy.

Once the families of strategic posts have been detected, which competences are needed are assessed, either because we do not have them or because we do and must promote them.

What is a competence? Competence management tries to define what behaviours and skills make a person better in their job to obtain business objectives. These behaviours or skills are called competences.

To continue this example, perhaps due to a specific growth strategy, the sales force:

1. Were lacking analytical capacity

2. Did not have a method

3. Did not have communication with other work teams

The second competence (method) is found in a low or inexistent level and we must therefore introduce it. The first and third competences must be promoted, in other words, the competences have levels and we can define: which level currently exists, which level is necessary and therefore the gap that needs to be covered. The grading is typically between 3 and 5 levels, for example: (1) Inexistent (2) low (3) medium (4) good and (5) excellent. It should be pointed out that it is important to describe a competence properly, as well as the different levels we are talking about, with sufficient examples and in writing, so that people are clear about what we expect from them. The way to strengthen competences is different and includes such broad tools as coaching and training.

Competences make people become a member of the strategy and show them that to obtain their objectives they must improve some skills, habits and behaviours . Competence management is a project related to the Balance Scorecard in the sense that it develops strategic competences that are needed to carry out the strategy and it offers very interesting benefits such as communicating to people what is expected from them, help to promote them, creating a defined and positive framework to discuss how to improve, and relates all of this with strategic plans.

When the execution of the strategic plan is specified and subsequently the indicators are detailed captured in an electronic format, we have the first result of the entire project: a Balance Scorecard with indicators calculated depending on the period we are in. Nevertheless, the project does not end here. We could even say that the real project has only just started, as the real objective is to execute the strategy and see how much it has progressed, and it is not merely automating some indicators.

We hear often that one of the risks of this type of projects is that they flag in time, and the Balance Scorecard often becomes just another report in the company’s reporting. It is important to put the Balance Scorecard report in a continuous use and improvement process, fully integrated with other existing processes in the company such as strategic planning, operative planning, reporting and management control, regular operation with board of directors tracking meeting, continuous improvement, etc.

In our case, when we finish the technological implementation, we tackle the consultancy to determine a usage policy that fits the company’s modus operandi. We establish a process with three different phases:

• Analysis phase (understanding)
• Discussion phase (decision approval)
• Improvement (decision execution)

The first phase includes the individual analysis by each head and level, of their Balance Scorecard, looking at trends, red lights and projects with delay. The result is a series of comments on the situation observed and list of improvement actions.

The second phase is the monthly tracking meeting, organised by roles taken on by the attendants during the meeting and a structured improvement presentation and approval process.

The third phase is the planning and execution of the decisions taken, the tracking of which is carried out in the following monthly meeting.

All companies have a strategy, more or less formalized, some with 3-5 year strategic plans, others with management plans and others with operating budgets. In any case, there has been a construction process (formulation) of the strategy, where, probably, more than one person has been involved. Furthermore, the strategy must be communicated to many more persons and from top to bottom, so that it becomes a feasible strategy.

Whether in the strategy formulation process or in the process of communication to the company, a very simple conceptual tool exists to assist in both cases: strategy maps. They are very simple to understand diagrams that draw the strategic objectives and the causal relationships between them, in other words, which objectives we must first promote to then be able to promote other objectives. They are diagrams that effectively communicate the structure of a strategy and furthermore force the team defining the strategy to find answers that prove that the strategy is consistent and realistic.

The strategy map shows strategic objectives such as:

1- Increase sales

2- Increase distributors

3- Efficient visit plan execution

4- Keep target clients

5- Reduce order processing time

6- Efficient execution of the strategic system plan

And these objectives classified in 4 big areas or perspectives on the diagram:

1- At the top, we have the Financial perspective, with the objectives related to the economic results we want to obtain, EBITDAs, Sales, Expenses ... and in some way reflects the economic value we offer the company’s shareholders.

2- Just underneath, we have the Customer perspective, with all the objectives related to client winning, retention, cross-selling, satisfaction,... and furthermore clearly defines the value proposal to the client, in other words, why are they going to buy from us or continue to buy (we have already talked about the value proposal in another bulletin).

3- Underneath, we find the Internal Business Processes perspective, with all the objectives that when attained will realize the client’s perspective. They are internal process objectives such as operations, commercial processes, marketing, R&D…

4- Finally, we have the Learning and Growth perspective that expresses if we have sufficient human capital, information and technology capital, and organizational capital to carry out the previous three perspectives.

Finally, we must add that the strategy map has become one of the most important tools to detail and execute a strategy, and it often forms part of a Balance Scorecard project, where the map is defined first and then its tracking is automated with indicators.