Casting a Wider Net

Profitable overseas expansion

‘Traditional’ trading partners in the US and the Eurozone make up the majority of British overseas trade – which today stands at some 64% of total exports. But developing economies may provide an as-yet untapped source of revenue for many British manufacturers. The potential (and the reluctance to invest in these markets) has been the subject hot debate in the past few months, with many industry commentators weighing in with their opinions…

Jim O’Neill, the economist accredited with coining the “BRIC” acronym, told the EEF manufacturing conference in March, that while Europe will remain Britain’s biggest export destination, the country could not “afford” to maintain these links at the expense of emerging markets. He said “While our position with EU and Eurozone is of number one importance, we should not get blindsided as that being the key thing for our export future. Our big future for exports this decade… is going to be other parts of the world, particularly China.” Mr O’Neill said he believed that western economies still “underestimate the scale of the growth” of the BRICs together with the next big four emerging markets of Indonesia, Mexico, Turkey, South Korea. He concluded: “This decade, those eight countries will contribute as much to the dollar value of world GDP as that of the US and euro area put together, twice.”

It seems however, that British Manufacturers are making a few tentative steps into these markets, with The Independent reporting that British companies have more than “doubled their exports to the fastest growing emerging nations in a bid to cash in on the rapid expansion in the developing world”. Figures released by The Office for National Statistics showed that exports to Brazil, India, China, Russia and South Africa more than doubled from £12.7bn in 2007 to £27.1bn in 2012. This means that the BRICS now account for 5.56% of total UK exports, compared with just 3.34% in 2007.

What’s holding us back?

Manufacturing firms are reluctant to invest in emerging economies is another point for debate. A viewpoint put forward by Martin Weale, a member of the Bank of England’s Monetary Policy Committee, is that businesses have been suffering from “heightened uncertainty” about the economic outlook which may have been “putting them off” making investments in overseas markets. In a speech at the Warwick Economics Summit, he argued that a lack of confidence has been blamed for the relatively low levels of business investment since the end of the recession, and this explanation could be extended to manufacturers’ overseas ambitions. He says “The costs which need to be incurred in entering new markets are a deterrent, not because businesses expect new sales not to be worthwhile he said, but because … at a time of heightened uncertainty, the risks involved may be putting them off,” he said.

Despite this reluctance to invest, the recent flurry of positive news stories coming from UK Manufacturing sector means that overseas growth is firmly back on the agenda. The EEF Executive Survey 2013 puts “Increasing Demand for products in Emerging markets” at number 2 in their top 5 of manufacturing opportunities – just behind “the commercialisation of new technology and product development”.

Preparing for expansion

Of course any company considering entering a new market must not only ensure that they there is the right level demand for their products, but that the business has achieved a level of operational readiness that allows them to fully exploit new market opportunities. Preparing the company from an operational perspective is something that can be ably supported by the implementation of robust ERP system designed handle the demands of a truly global operation.

One recent success story is that of SPP Pumps – a manufacturer with British heritage – who are making it big on an international stage. SPP Pumps is a multi-award winning engineering firm who design and manufacture industrial pumps for a global client base and their equipment is found across all continents – covering a diverse range of industries. In 2008, the company opted to implement SAP, with the firm’s Managing Director, Graham Terry saying: “A defining characteristic of SAP is that it supports a global, growing business. Companies that are seeking to develop new service lines or explore new markets will find that SAP gives them the scope and the flexibility to do this”. Since the SAP implementation SPP have cited numerous benefits of SAP within a global context including:

  • Improved financial processes with “Up-to-date financial information combined with extensive reporting and drill-down capability gives us a fast, comprehensive view of what’s happening across the global operation”.
  • Improved business planning: “A clear – and often overlooked – benefit of SAP is its potential; we can confidently plan our future knowing we have the supporting systems in place to facilitate international growth”.
  • Improved productivity and expansion without adding extra headcount: “The implementation of SAP means that we can now effect major international expansion without having to increase operational headcount to cope with the additional volume of work.”

With the right technologies in place you can equip your people with the tools needed to support international business growth. For a deeper understanding of how technologies such as SAP ERP can increase your chances of success when competing in a hypercompetitive global market please contact us.

Top 5 Problems Companies Seek to Address with Big Data

The Big Data trend is sweeping across every industry – and companies everywhere are keen to learn more about the subject so they can better understand what it can do for their business.

Gartner, as you might expect, is very much at the forefront of bringing fresh insight into the subject. And it seems from a survey report they released earlier this year that there is good reason for this. Even though the Big Data concept has really only taken hold in recent times, their research suggests that 64% of organisations are now planning to invest in Big Data solutions within the next two years (news that is almost certain to keep Big Data in the headlines for several years to come!).

Although actual adoption of Big Data technologies in the here and now is still in its infancy (8% according to the Gartner research), there are a wide range of business challenges that have the potential to be transformed. In this post, we take a look at the top 5 business problems that are highlighted as areas which companies are looking to address through Big Data solutions.

1. Enhancing Customer Experience
There’s a growing body of research which suggests that businesses who invest in understanding their customers better can outperform their peers by a significant margin – and Big Data technologies can play a pivotal role in this understanding.

The entire Big Data concept as it relates to customer-centricity lies in taking multiple sources of information, aggregating it, and using it to produce real-time business insights that deliver improved insight into customer behaviours. One of the early adopters of Big Data is the retail industry. As an example, by using Loyalty Card data combined with other sources of information, retailers can quickly track and record what their customer’s habits are. This helps them to predict which discounts or promotions would have the most likelihood of enticing them back to their store. The result? Improved customer retention, increased add-on sales and improved brand awareness. Retailers with more advanced mobility enhanced systems can even run these types of discounts and promotions when the customer enters their shop, helping to increase average transaction size with real-time offers.

2. Process Efficiency
Achieving process efficiency is the Holy Grail for both manufacturing and service organisations alike. However, this has been difficult to achieve in the past since there was no way to capture huge, disparate data sets for processing and analyses. A simple activity like month end closing used to produce financial statements is a great example of an onerous, iterative challenge experienced by many organisations. This is simply because of the lack of tools and technology available to process huge sales data multiple times, from many different sources and data feeds. This leads to an inability to aggregate and allocate costs being incurred through various sources and to crunch the numbers to produce figures under the various heads in financial statements. Appropriate use of Big Data technologies can reduce the time taken to perform month end closing activities from days to hours!

3. New Product Development
In their 2013 Innovation Monitor report (*subscription req’d), the British Manufacturers’ Association – EEF – revealed that 75% of manufacturers believe that speed to market is more important than it was in the past.

A key factor that’s driving this need for speed is that in today’s global marketplace product lifecycles are shorter. Competition from previously low cost manufacturing bases has started to intensify, with companies in these countries increasing their own levels of innovation in order to move up the value chain. As these competitors start to innovate more so the product lifecycle is shortened as technical edge is lost to other, newer ideas.

Deploying applications that can analyse Big Data sources can help build an overall picture of consumer demand and help identify market gaps that might be filled with a new product or business service innovations In addition, having an iterative, constant flow of real-time data means companies can be increasingly responsive in adapting their product developments to the needs of the market today – and they can gain that all important first-mover advantage when taking new products to market.

Another key advantage is that product development also requires a certain amount of time in research labs – be it a physical product or software. Big Data technology can potentially help in simulating various outcomes during the development phase or in analysing various test results quickly which of course allows for course correction actions before it’s too late.

4. Targeted Marketing
Gaining the tools needed to analyse Big Data stores means companies can more quickly and efficiently segment and analyse patterns, trends and sentiments that help them better understand buying behaviours. For example, banks and financial institutions are using insights gleaned from daily transactions, market feeds, customer service records, location data and click streams to create new business propositions and improve their go to market strategies.

Access to this kind of information means an opportunity to make better targeted marketing approaches – much faster than ever before. In a recent Guardian article on the subject of Big Data, Matthew Bayfield, group director of data for marketing agency Ogilvy EMEA said: “The new way of thinking about [data] is more like trying to read the river, you’re trying to spot patterns. There are numerous pots of information that exist in a digital ecosystem that [companies] can tap into to try and understand more about the consumer and what the consumer wants.”

The greater the visibility of data, the greater the opportunity to market successfully. And, with more and more consumers using digital technologies, the more important a solution that addresses that challenge becomes.

5. Cost Reduction
We normally think of Big Data solutions as expensive, so you may be surprised to see cost reduction at 5th on the list. Even though the initial outlay for a solution can seem expensive, the benefits of deploying such technologies can help to reduce cost in other areas of the business. For example, eBay use SAP’s latest Big Data innovation – the SAP HANA Platform – to manage foreign exchange and improve the hedging process. By using analytics solutions powered by the SAP HANA platform, eBay gets a complete view of cash across its entire organisation – meaning they can drive proactive currency management, increase profitability, and improve operations. This has resulted in estimated savings of $40M per quarter from better decision making on currency hedges based on real-time data and trend analysis.

Invenio Business Solutions work with one of the most talked about Big Data products in the market today, SAP HANA. SAP HANA can analyse huge quantities of data in real-time, meaning companies can get instant answers to questions and use the insight to improve multiple areas of the business.

Invenio’s SAP HANA Lab allows us to create test scenarios that enable clients to experience what they can achieve using Big Data solutions before they embark on an implementation. For more details on how we can help you achieve success using Big Data, please contact us.

Survival of the Fastest

How new product and technological innovation is fuelling the growth of British manufacturing in a global market.

Captialising on the Latest Trends and Developments

Britain has a wealth of technical skills and knowledge and a strong history of innovation. And, if recent reports are anything to go by, British manufacturing firms are planning to capitalise on these strengths more so than at any other time in the past few years.

The recent EEF/NatWest Innovation Monitor report found that 71% of companies are planning to invest in innovation to export to new markets in the next three years with 73% of companies plan to bring new products to market in the next three years.

By harnessing employees’ technical abilities, and by developing strong research and development capabilities, manufacturers can use innovation to achieve a unique competitive position to help drive demand both in here the UK and globally to ensure export growth.

Manufacture ImageManufacturers are also keen to deploy innovation internally to reduce waste and improve efficiency in an effort to curb the rising costs associated with managing a UK-based operation. One example cited is “platforming” – which is a methodology aimed at producing products that share physical attributes so a production line can make as many products or components as possible. This type of innovation if successful will allow UK manufacturers to be competitive at large production volumes – something we normally associate with manufacturing in the Far East.

Need for Speed

One area that remains a challenge for British manufacturers is the speed of innovation. The Innovation Monitor report revealed that 75% of respondents think speed to market is more important than it was in the past, but that speed of innovation remains a top concern. Innovation is a difficult process, which requires significant resources and expertise. And selling into new markets has heightened some of the challenges that manufacturers face, particularly the need to deliver innovations quickly.

The need for speed emanates from the fact that product lifecycles are shorter. Competition from previously low cost manufacturing bases has started to intensify, with companies in these countries increasing their own levels of innovation in order to move up the value chain. As these competitors start to innovate more so the product lifecycles is shortened as technical edge is lost to other, newer ideas.

In summarising the need for speed Richard Halstead, a regional director at EEF, said “Speed is a key challenge for manufacturers because of the increased global competition and the demand from consumers for constantly evolving products. The number of countries now entering the global market has forced manufacturers into ever faster turnaround in developing new products which differentiate them from their competitors. Additionally some environmental legislation, the scarcity of raw materials and the demands of major customers in the aerospace and automotive sectors are all forcing companies to think faster on their feet. The boredom threshold of consumers also means that people are becoming conditioned to think in terms of having the latest product on a more regular basis (think mobile phones for example). All of the above means that product cycles which might previously have been decades or a number of years can often be measured in far shorter periods”.

Unfortunately innovating quickly proves to be a real challenge for companies. Innovation is a complex process with many obstacles that can hinder the speed of developing innovations. The EEF report suggests that many manufacturers are concerned about their performance. They say “Only 25% of manufacturers said their performance was good or excellent [in terms of speed of innovation], while 30% of companies said they thought their performance was poor, reflecting the ongoing challenge of hitting the moving target of customers’ demands and technological improvements from competitors”.

Addressing the Challenge

Given that speed is represents such a major challenge for manufacturers, it makes sense to deploy tools and technologies that can help speed up the innovation process – from idea to finished product. Solutions such as SAP can help manufacturers right across the product development lifecycle. SAP Business All-in-One, for example, supports the key processes for managing ideas, gathering requirements, and sourcing for suppliers, as well as a central structure for cost collection and documentation management. Transparent bill-of-materials (BOM) handling and product data management functions help turn a product specification into an engineering BOM that can be copied to create the production BOM. As a result, companies can launch innovative products quickly and cost effectively.

There are other, indirect, areas in which software solutions can help. Solutions for Human Capital Management (something we’ll explore in a later article) can help to improve activities such as workforce productivity and performance – two areas which can positively impact the speed of innovation. And analytics can give you much deeper insight into a range of key performance indicators that can help inform your business planning in order take advantage of any emerging trends.

To find out more about how Invenio helps manufacturers use technology to increase the chances of success in today’s hypercompetitive global market contact us.

The Role of Technology in Pharmaceutical M&A

In a recent blog post, The Wall Street Journal reported that Pharmaceutical companies are “continuing to boost global M&A volumes this year”. In a similar vein, an article from Forbes suggests that we can “expect to see big pharma grow their drug pipeline through M&A”. In this post, we take a look at the underlying trends driving this recent uptick in Pharma M&A activity, and how technology can help (or hinder!) a smooth integration process.

Underlying Trends Driving M&A Activities
Mergers & Acquisitions have become a rule rather than an exception in the pharmaceutical industry globally. The last decade saw mergers and acquisitions top US $ 690 Billion. Merger deals peaked to 180 in 2007 against 40 in 2000 – with four companies alone accounting for an acquisition ‘bill’ of US $ 250 Billion +.

There are many factors driving this activity, both then, and now. These include:

The need to shore up revenues. The number of drugs coming of patent in 2014/2015, will put some 46% of revenues of the top pharma companies at risk, say global management consulting firm, AT Kearney. In addition, regulatory pressures also contribute to revenue risks – developments and approvals are being closely scrutinised, and pricing and cost containment measures are being instituted. In the face of this situation, ‘big pharma’ – pharmaceuticals businesses with deep pockets – are on an acquisition spree as a route to bolster pipelines and increase revenues.

The need to internationalise. With demand for treatments from emerging economies growing fast, pharmaceuticals need to take steps to globalise in order to serve this growing segment. To cater to this growing demand we have seen Private Equity firms merge portfolio companies based on geographic spread considerations. A case in point is European Private Equity firm Cinven, which merged two of its portfolio companies – Mercury and Amdipharm. The merger has resulted in the creation of AMCo – a new entity with a global footprint.

Synergy Considerations. The sales force in pharmaceutical businesses often need specialist training – especially in the case of products that treat rare and uncommon diseases. It is not uncommon for mergers to be centred around a similar product portfolio in order to capitalise on these skills with a recent example been seen in the acquisition of ViroPharma by the Irish Pharma major, Shire.

Spreading Risk. A merger often serves to increase the portfolio of the acquiring company across new product groups. This helps reduce dependency on a particular product group enabling the acquiring company to reduce the risk associated with being a one product group focused company.

In addition to these core drivers, there are of course other factors can also play a key role including:

Impact of M&A on organisational processes
A by-product of any M & A activity is the deep impact it has on organisational processes. Existing processes are modified, and new processes come to be. Depending upon the drivers for the merger, different technology challenges need to be addressed:

  1. Transformation of ‘custom’ processes to ‘best practice’ processes. Many businesses – specifically home-grown, family-owned companies – tend to have business processes which do not fit into the workflows and processes prescribed by many software products available in the marketplace, and this can throw up many challenges in harmonising processes across the newly merged entities.
  2. Globalising existing processes. When Pan-European businesses merge with those that have a North-American focus it throws up its own set of challenges. A pharmaceutical business with its manufacturing base in the UK is suddenly confronted with having to monitor its products across a global supply chain in new regions and territories. This is especially relevant for the pharmaceutical industry in the context of the stringent and varying quality control requirements.
  3. Bringing an element of uniformity. Businesses that merge often have some fundamental process differences – for example year-end closing which means that the merged entity will need to migrate to a uniform year-end closing.

The role of technology
Cultural and process changes eventually do find their way into the IT systems that a business has – but the length of time this takes, and the degree of success in which this happens can vary very considerably. Very rarely does one find similar IT systems between the merging entities and, for this reason, it is important to have an IT system that firstly lends itself to the pharmaceutical industry and secondly can be quickly customised to fit the merged entity in terms of mapping new processes in their entirety. Clearly a fit between a software system and a business is as much about the appropriateness of the software solution as it is about an implementation partner who understands pharmaceutical business processes to effect a quick implementation.

SAP is one of the few solutions that fits the pharma business model well. The core product represents a 65 -70% fit into a pharmaceutical model. The remaining 30-35% can very easily be customised to suit business needs. In fact, companies like Invenio have built SAP Pharma accelerators that enable virtually every type of pharmaceutical business go live in SAP quickly, and with minimum disruption. And this is exactly what’s needed when you want to realise the benefits of a newly merged entity.

If you would like to find out more about how Invenio and SAP can help you ease the process of a merger integration please contact us for more information.

Invenio Debuts on the Deloitte Technology Fast 500 EMEA

deloitteReading, UK – 3 December, 2013. Invenio today announced it that has debuted on the Deloitte Technology Fast 500 EMEA 2013 – a ranking of the 500 fastest growing technology companies in EMEA. Rankings are based on percentage revenue growth over five years, during which, Invenio grew 482%.

Invenio’s Managing Director, Partho Bhattacharya, credits much of Invenio’s success to its ethos of close collaboration with its customers in creating solutions that reduce cost and improve processes. He said, “A key objective for us as a business is to help our customers get more value from technology that they have already invested in. By helping our customers build out on that investment, Invenio will continue to realise sustainable, profitable, business growth”.

The Technology Fast 500 list is compiled from the Deloitte EMEA Technology Fast 50 programmes, nominations submitted directly to the Technology Fast 500, and public company database research. To qualify, entrants must have had base-year operating revenues of at least €50,000, and current-year operating revenues of at least €800,000.

David Halstead, Deloitte UK and partner in charge of the Deloitte Technology Fast 500 EMEA programme concluded “Because Deloitte Technology Fast 500 EMEA measures sustained revenue growth over five years, being one of the 500 fastest growing technology companies in EMEA is an impressive achievement. Making the Deloitte Technology Fast 500 EMEA ranking is a testament to a company’s commitment to technology and, with its 482% growth rate over five years, Invenio has proven that its leadership has the vision and determination to grow in difficult conditions”.

To download a copy of the press release please click here.

Media Contact:
Leanne Cobb
+44 (0)330 440 1800

Invenio joins the G-Cloud Programme for Specialist Cloud Services

Invenio are pleased to announce that their application for the UK Government’s G-Cloud programme has been approved. The programme, currently in its 4th iteration, will enable Invenio to deliver a range of services in the “Specialist Cloud Services” category. The G-Cloud is an initiative designed to make the process of procurement easier for UK Public Bodies. The primary aims of the GCloud are:

  • To achieve large, cross government economies of scale.
  • To deliver ICT systems that are flexible and responsive to demand in order to support government policies and strategies.
  • To help Government bodies take advantage of new technologies in order to deliver faster business benefits and reduce cost.
  • To meet environmental and sustainability targets.
  • To allow government to procure in a way that encourages a dynamic and responsive supplier marketplace and supports emerging suppliers.

DfT Id templatesThe G Cloud online portal allows participating government organisations to buy pre-approved cloud-based digital services, thereby helping to circumvent the need for lengthy and costly procurement processes. Since its inception, the model has gained significant participation from the UK SME community, many of whom have previously avoiding participating in public sector tendering exercises due to a lack of internal resources. In a recent statement regarding the G Cloud, the Minister for the Cabinet Office, Francis Maude said “Our reforms to government technology are designed to ensure the best possible service for users at the lowest cost for taxpayers. To make this possible we need a truly competitive marketplace. SMEs are a source of innovation and a crucial engine for growth. We will continue to knock down the barriers that have prevented them from winning public sector work in the past. G-Cloud is a simpler, faster and cheaper way for the public sector to buy digital services. It allows companies of all sizes to benefit from our digital by default approach to government. I’m delighted that so many SMEs have won representation in this new iteration,” Being part of the G Cloud means that Invenio can assist public sector bodies in procuring a range of services more efficiently and cost effectively. Invenio is a Gold SAP Partner and a UK based SME specialising in SAP Consulting, Implementation and Support services, for both ‘on premise’ and ‘cloud’ based implementations. Our Public Sector practice is led by experienced SAP veterans with extensive experience in Public Administration and in providing tax and revenue management solutions to Central, Federal and Local Government Agencies worldwide. The team also includes experienced SAP Tax consultants with in-depth expertise in delivering projects to a growing public sector customer base. For more information you can visit govstore.service.gov.uk or contact us directly.