Operational excellence focuses on how we can better use our resources, plan matters better and avoid mistakes. We are currently assessing the best practices of
operational excellence that exist within our company and intend to implement them across the group, whilst still taking into account the differences among the various operating clusters.
The operational excellence programme has been divided in six main components: (a) project management and project execution, (b) cash and working capital management, (c) procurement processes, (d) tender processes, (e) risk management, and (f) governance and control.
a. Project management and project execution
As a project driven company, project management and project execution are key for realising a healthy project profitability. Within our company, there are differences on how projects are managed and executed (e.g. means of ensuring the most appropriate project manager is working on
a particular project, selection of the optimal team for a project, selection of the right sub-contractor(s), accurate planning and logistics for the project), and this will remain so in the future. However, in particular in view of the industrial trend of increasing complex projects, assessing and rolling out internal best practices to improve project management and project execution is an advantage which can benefit all business units. In the beginning of 2012 we started a programme for developing and training senior project managers. We will continue to focus on improving project management and project execution, and will reinforce project management programmes and continue to assess and implement best practices. Furthermore, we will start global account management for key customers that are active in multiple locations (and who are serviced by multiple operating clusters or divisions within the group), so that our largest customers are managed centrally.
b. Cash and working capital management
Within project businesses, cash and working capital management are of great importance. Since 2010 working capital requirements have been increasing. We will enhance our working capital and cash management with specific attention to customer billing and invoice payment procedures and tighten
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e. Risk management
Risk management is an important element in the daily business of a project driven company. Due to the recent findings, we decided to accelerate our process of strengthening and improving our GRc policy under the direct responsibility of the Group Director GRc. In February 2013, with the assistance of an external adviser, we started a review of the company’s existing risk management procedures and systems. That review indicated that the development of the risk management and internal control infrastructure had not been commensurate with the increase in complexity and size of our company that resulted from the growth of the company over the last years. We are therefore strengthening our risk management policy, e.g. by enhancing our tender procedures and appointing a Group Director GRc who will also be directly responsible for risk management.
f. Governance and control
We already had several internal rules and regulations in place in the fields of governance and compliance. Since February 2013, we are reinforcing the quality and effectiveness of our governance and control mechanisms, changing the role of the Board of Management, adopting other governance measures and strengthened the financial and legal function. In this process, we will be advised by external experts. II. ORGANIC GROWTH
We envisage realising organic growth through the following four components: (a) focus on recurring revenue streams, (b) multi-service, multi-site offerings, (c) capitalising on acquisitions and (d) scaling technologies across the Group.
a. Focus on recurring revenue streams
We apply a continuous focus on securing recurring revenue streams (i.e. revenue streams from a customer who keeps returning for various services and recurring work such as multi-year maintenance contracts). We believe that leveraging our diverse customer base and contract portfolio contributes to attractive recurring revenue streams across all of its operating segments. We envisage to provide additional services to existing customers within a certain business segment, introduce new services to existing customers across business segments, and try to secure a sustainable recurring revenue stream from new customers.
b. Multi-site/multi-service solutions
As set out above, we perceive an increasing trend among our customers to outsource a wide range of technical services and seek multi-site/multi-service solutions, due to increasing technical complexity of their systems, cost pressures and a desire to devote more attention to their core businesses. We believe that these outsourcing trends create attractive growth opportunities. We have positioned ourselves to benefit from these trends through using our wide range of multi-technology competences, logistical expertise and our dense local network in key geographies. This allows us to provide a local or multi-national ‘one-stop-shop’ service offering to our customers for multi-site/multi-service offerings.
c. Capitalising past acquisitions
We acquired numerous companies over the last years. For many of these acquired companies the integration process has been completed or is in an advanced stage, allowing us to benefit from synergies post acquisition. For certain other acquired companies, integration will need to commence. For a number of more recent acquisitions, we have accelerated the integration processes, mainly through sharing best practices on execution, technology and organising back offices efficiently.
d. Scaling technologies across the Group
We envisage to increasingly leverage our customer relationships and knowledge across the Group in order to unlock additional growth potential, e.g. by sharing customer relationships, competences, notable experience or specific know-how across our company. We assessed the extent to which this approach could be used most effectively given market outlook and potential profitability. In the light thereof, we identified the following four markets in which its clusters, divisions and business units could share know-how and experiences:
■ ■ Green technologies ■ ■ Water technologies ■ ■ Data centres ■