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IT restructuring at software and telecommunication provider Unify

Case Study

Challenge

Unify was in the midst of a transformation from being a hardware-centric provider with direct selling to a software and services oriented company. The main cost drivers in this process were the IT costs, which had gotten completely out of hand. And what was more, drastic sales declines and losses of market share also made it difficult for Unify – the market leader – to adapt to the new competitive situation.

Success

Atreus helped Unify to keep to its IT budget in the ongoing fiscal year, and to realize a further planned reduction of the IT costs, and it ensured that the lower budget was adhered to in the following year. Indeed, by accomplishing an even bigger reduction of the operating expenditure, investments could be increased while still remaining within budget. Furthermore, Atreus also helped stabilize the IT organization and supported the ongoing integration process.

Interview with Olaf Horsthemke, head of HR at Unify

Why did you ask Atreus for assistance?

Our costs for the IT restructuring within our company-wide transformation had exploded. Although the company had been streamlined across the board for lower costs, IT announced that it was going to exceed its prescribed budget. This meant that the overall IT budget for the following year, which included a cost minimization of good 20%, was also in doubt. Atreus provided a Program Manager who radically reduced the IT expenditure within a year. 

Main goals of the project

  • Reduce the overall IT costs by 20% within 12 months
  • Coach the CIO and be ready to take over the CIO position on an interim basis if required
  • During the project, also assist with the IT post-merger integration with a global IT service provider
© sonjanovak – fotolia.com

You want to know what Atreus can do for you in a similar situation?
Contact Rainer Nagel, CEO.

+49 89 452249-400 Rainer.Nagel(at)atreus.de

The framework conditions for the IT restructuring were highly unfavorable…

Unify IT was trapped in its legacy and existing system landscape and couldn't see any levers for changing this state of affairs by itself. The department had been reorganized several times in the recent past and had a bad reputation within the company. Upon his arrival, the Atreus Manager found a highly complex application landscape in place, with country-specific SAP systems, extensive shadow IT and inadequate cost discipline and transparency. Within the IT management there was also a lack of coordination of activities, and the basis of mutual trust was damaged to some extent. In addition, within the course of restructuring measures, numerous IT and process know-how carriers had left the company. 

What approach did the Atreus Manager choose to remedy the situation?

His recipe for success was a procedure in waves, clear process ownerships and a strict and systematic implementation focus. He began by analyzing the IT cost structure and cost drivers, and examined planned cost-reduction measures (baselining). In order to expose further savings potential, he organized what he called "Idea Workshops". What resulted were several "waves" and topics such as headcount, local IT or supplier, etc.. Together with the IT management, he verified the identified potentials and then derived individual measures with varying degrees of stringency. He then agreed upon deadlines for the transfer of ownership with the responsible IT staff.

Despite the cost pressure in IT, the budget required to realize the essential digitalization projects was freed up by reducing the operational IT costs.

In his capacity as Executive Vice President and Chief Human Resources Officer, Olaf Horsthemke is responsible for all HR programs and processes at Unify, worldwide. Prior to holding this position he worked at Coriant, where he was in charge of the worldwide HR initiatives and the entire HR division. Before that he held various positions at Nokia Siemens Networks, including Head of Human Resources Europe. He began his career at Siemens, where he worked, for instance, in software development for private and public communication networks. He also worked in the HR department at Siemens as HR Consultant, Senior Manager and HR Business Manager for the landline division of Siemens Communications. 

Olaf Horsthemke, as Head of HR at Unify

In his capacity as Executive Vice President and Chief Human Resources Officer, Olaf Horsthemke is responsible for all HR programs and processes at Unify, worldwide. Prior to holding this position he worked at Coriant, where he was in charge of the worldwide HR initiatives and the entire HR division. Before that he held various positions at Nokia Siemens Networks, including Head of Human Resources Europe. He began his career at Siemens, where he worked, for instance, in software development for private and public communication networks. He also worked in the HR department at Siemens as HR Consultant, Senior Manager and HR Business Manager for the landline division of Siemens Communications. 

 

"We were able to keep to the budget in the ongoing fiscal year, and in the following year we realized the 17.1 million euro reduction of the operational costs as planned, thus also keeping to the planned budget. We increased the investments in IT transformation projects by 56%."

What were the actual activities implemented?

In "Restructuring Package 1", we executed immediate and short-term measures for stabilizing costs in the ongoing year. "Restructuring Package 2" was aimed at reducing the overall IT costs by 20% in the following year. Continuous tracking and reviewing at individual activity level also proved to be highly effective.

What successes was the Atreus Manager able to achieve?

Thanks to short-term measures with a recurring effect, we were able to keep to the IT budget in the ongoing fiscal year, and reduce it by a further 20% the following year. As the project budget was proportionately raised, this equated to a reduction of the operational IT costs by around a quarter within the space of one year. This meant that budget could be freed up for essential digitalization projects, and we were able to stabilize the IT organization as a whole. After replacing the incumbent CIO, the Atreus Manager helped the successor with his responsibilities.

You deliberately decided to have the project headed by an interim manager?

It was important to us that the project manager didn't only bring with him proven methods expertize, but also the necessary know-how in the field of IT restructuring. It was also crucial that the manager have a certain "political" neutrality within the company, and a thick skin for unpleasant responsibilities. The Atreus Manager also had experience with restructuring and with private equity shareholders. This made him a perfect fit for us.

Success factors of the project

  • Rapid identification by the Atreus Manager of the issues requiring adjustment
  • Ownership of the organization with clear responsibility for the execution
  • Clear communication of the goals by the top management
  • Resoluteness in the implementation and leading by example

 

  • Project communication: clear goals and clarity about expectations
  • Hard work: stringent definition and implementation of around 100 individual measures
  • Personal acceptance of the Atreus Manager

Atreus is the leading interim management provider in Germany and one of the largest in its field in Europe. We solve difficult operational management and transformation problems quickly and reliably. Contact us and find out how we can help you master your situation with management expertise that is available at short notice and that is the perfect fit for you.

Atreus is a co-founder of Globalise – the market’s leading and largest provider of international interim management. Accelerating change and delivering success. Worldwide. Structured as a global group of leading interim management firms, Globalise has the reach to support you in solving your company’s most important issues around the world.

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