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Bringing corporate performance management in house – implementing a CPM solution at Imperial Tobacco Austria
So that the staff at Imperial Tobacco Austria Marketing Service GmbH in Vienna could perform their corporate performance management tasks themselves, they decided to set up a corporate performance management department and implement new software for that purpose – and, in doing so, they remained faithful to the “minimax” objective of the parent company, Imperial Tobacco.
Starting from scratch
Founded in 2006, Imperial Tobacco Austria has been steadily expanding its presence in Austria. At first, its activities were focused exclusively on sales. The Austrian team consisted of a few sales representatives.
The corporate performance management tasks were performed by the German company, Reemtsma, another company in the British Imperial Tobacco Group. This company produced the monthly statements and the consolidated reports, as well as the cost and revenue plans, for the Austrian company.
By the time Ms Véronique Dautriche joined the company as Finance Manager in Vienna in mid-2009, the team had grown to twenty. Ms Dautriche’s stated objective was to set up new corporate performance management at Imperial Tobacco Austria Marketing Service GmbH, i.e. to remove it from Reemtsma in Germany and to establish it in Vienna. In this context, a suitable software solution was to be introduced as a means of support. Up to that point, there was neither an IT department nor a locally-based corporate performance management specialist at the Vienna subsidiary of the Imperial Tobacco Group. The software was to be chosen and introduced, and the corporate performance management implemented, entirely by Ms Dautriche. This made her project manager, software purchaser and user all in one. “In my very first few weeks, I had already identified Corporate Planner as a software solution that would match our specifications exactly,” Ms Dautriche describes the beginning of the selection process. However, her being convinced by the software was not enough. The selection and the investment had to be cleared by what is known as Group IS approval. This meant preparing a detailed investment request with a description of the functionalities, a consideration of alternatives and an investment appraisal, and submitting it to the group’s IT managers. With the help of Michael Blazicevic, Head of the Corporate Planning Competence Centre in Vienna, Ms Dautriche assembled all the required information. The group management then approved her suggestions for purchase and implementation.
Down to work
Together with the CP consultant Markus Müllner, she immediately took up the challenge of depicting the company’s structures and activities in the software. The company’s special focus on marketing and sales activities had to be suitably implemented in the typical Corporate Planner tree structures. “With good spirits, extremely clear methods and ever prompt implementation, the implementation stage was great fun,” Véronique Dautriche remembers with enthusiasm. The hierarchy levels in the data structures do not only display the costs and sales figures by cost type. What is more important to Imperial Tobacco Austria Marketing Service GmbH is the breakdown of the values according to project, such as a product or market launch or the investment activities in a specific distribution channel. Using the master-client method, a master template was built for the costing (a contribution margin analysis), and this was then transferred to all brands and product variants. The master tree structure for project management is based on the same principle. The marketing budget, structured according to the brands as well as cost centres, is planned and analysed.
Corporate performance management in action
The actual data are imported from the external financial accounting program BMD by way of *.csv/*.xls files. The monthly statements and the group reports are created in a cost centre structure (cost centre hierarchy / overhead costs) on the one hand, and in a project structure (project hierarchy / marketing costs) on the other. The balance sheet and the P&L are drawn up in IFRS format and in that of the Austrian Commercial Code. Corporate Planner makes possible what could not be done in Excel anything like as quickly: a monthly integration of the actual data, in each data stream, for every project or cost centre. Within just under an hour, the corporate performance management specialists at Imperial Tobacco Austria had the budgets for internal calculations and for group reporting ready, which are updated each month.
After a brief implementation period of just four months in total, Ms Dautriche had achieved her objective. Her new department is running smoothly and has taken over the corporate performance management tasks for Imperial Tobacco Austria – even without the support of an IT department, which was not brought in house in Vienna until a year after the software was up and running. At the same time, she succeeded in keeping to the group’s objective of reducing costs and maximising benefits.
About Imperial Tobacco Austria
Imperial Tobacco Austria Marketing Service GmbH is part of the Imperial Tobacco Group, the fourth-largest tobacco group in the world. With an overall market share of around 18 per cent, Imperial Tobacco Austria is the third-largest and the fastest-growing tobacco company in Austria. Since 2006, the company has grown from just a few sales representatives to what are now 40 employees. Imperial Tobacco Austria’s product range includes the cigarette brands JPS, Gauloises, West, Davidoff, Ernte 23 and Peter Stuyvesant, as well as a wide range of rolling tobacco products.