Transcript Avaya-Tenovis 2005

AVAYA-Tenovis in France
Best in France Case Study
May 2005
By group BJ2 : Ms. Jiyoon AN, Mr. Pedro V. ALMEIDA, Mr.
Guillaume RAOUX and Mr. Mame D. SY
Executive Overview
• What's AVAYA-TENOVIS
business
• AVAYA-TENOVIS products
and clients
• Why did AVAYA-TENOVIS
come to France
• Do company values fit the
French culture?
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Constraints in France
Adaptation to France
Key Constraint Costs
Key Benefits of France
Essential Advice
AVAYA-Tenovis
• AVAYA
– US Corporation headquartered in New Jersey
– Founded in 2000
• TENOVIS
– Headquartered in Germany with European operations
– TENOVIS settled in France in 1990
• AVAYA-TENOVIS
– AVAYA acquired TENOVIS in 2004
• Business
– Global Communications Solutions (51% of revenues*)
• Development and commercialization of communications
products and applications (hardware and software)
– Global Services (49% of revenues*)
• End-to-end Voice network services : Planning & design,
implementation, management and maintenance of networks
* 2004 revenues : $4.069 billion
Key figures
• World
– FY04 revenues of $4.069 billion and profits of $291 million
– Global Workforce : 20,000 including 16% in R&D
– N°1 worldwide for Telephony over Internet (24% market share)
• Europe
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Workforce : 5500
FY03 revenues of $890 million
N°1 in Europe for Contact Center solutions (30% market share)
N°3 in Europe in voice lines shipped*
• France
– Workforce : 200 including 25% in R&D
– N°3 in the French Voice telecoms market
– Financial figures : only AVAYA consolidated statements are
available
* 2004 annual reports quoting Industry Analysts
Company products
• TENOVIS historically held production in France
– Will stop by end of 2005 and centralized in UK, US and Asia
• Lack of flexibility in work legislation,
• Higher labor cost
• Re-alignment on AVAYA Group production standards and strategy
• Service offerings in France : Sales of products, applications
and services in :
– Internet Telephony
– Mobility
– Contact Centers
Company's clients
• Corporations, GOs, NGOs,
– SNCF, AGF, Hospitals, Hotels (Sheraton), …
• 200,000 customers in Europe
• Clients perception of AVAYA in France
– Low awareness in Administrations and NGOs
– Good technology
– Higher prices than competition
• French presence required to address the 3rd market in Europe
– Covers France and North Africa
– Adjusts commercial methods to cultural specificities
– Close proximity to better service the clients and relay clients
requirements
Main competitors in
France
• Traditional telecom manufacturers
• Digital and analog Voice Systems
– Alcatel, Matra, Siemens, Nortel
– Alcatel and Matra : 80% of the market share in France
• IP telephony
- Cisco, Alcatel, Nortel
Why it came to France
• International growth through Acquisition
• TENOVIS
– Large customer base across Europe (200,000)
– Presence in France
• Key Presence in France maintained
– France is 3rd market in Europe
– Cultural differences
– 50 people in R&D
Company values
• Core Values : Velocity, accountability, customer
values, innovation, diversity
• Performance-based culture outcomes
– Competitive, rewarding, innovative environment on the
leading edge
– AVAYA to be consistently acknowledged as the best
company to work for
– Best-in-class people, productivity, processes
– Unparalleled values for AVAYA and its stakeholders
Company values
• AVAYA faced the French conservatism, opposing
– Velocity and customer-oriented driven business
– Velocity and innovation
– Diversity and global standards
• AVAYA-TENOVIS objectives
– Create a Franco-American culture
• French based commercial and legal methods
• AVAYA based corporate human capital practices
– Recruitment of international profiles
Constraints in France
• Constraints anticipated before coming to France
– Labor laws and flexibility : difficulty in the lay-off process
– “French market has to be dealt with the French”
• No American expatriate in France
– Language translation costs : for all documents and products
• Constraints discovered
– Non dynamic relations between the US HQs and the branch
• The majority of the employees do not speak English
• High costs of translation and English training
– High cost of adjustment to the French fiscal and accounting
rules
– Lobbying barrier : difficulty for an American company to
establish and maintain relationships with GOs
Adaptation to France
• AVAYA-TENOVIS Human capital Practices
– Recruitment/Selection
• Favor international profiles
• Prove the additional revenues expected from the recruit
• Favor young managers with personality traits that fit with
AVAYA Values
– Compensation based on Performance
• AVAYA principles of compensation and performance
appraisal
• Bi-annual individual performance appraisal
• Compensation curve :
– 20% outstanding : salary Increase + Bonus
– 70% satisfactory : Salary Increase + NO Bonus
– 10% unsatisfactory : No Salary Increase + NO Bonus
Adaptation to France
• AVAYA-TENOVIS Human capital Practices
– Management Development
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On-line Talent Management Tool
Long-term Individual development plan
Bi-annual Leadership performance appraisals
Year-long coaching and feedback
– Work organization and Communication Policies :
• outsource none core business : industrialized activities,
administrative and legal processes
• favor direct communication between management and
employees
• Simplified organization (near flat)
• Favor personnel development based on Performance appraisal
– Training : English for everyone
– Work environment : open-spaces
– Few American expatriates
Key Constraint Costs
• Competitive costs to coming to France
– Low salaries compared to Northern Europe
– Communication constraints (language,
infrastructure communication costs, etc.)
– Integration of French managers into global
organisation (does it cost more to use French
managers than managers from other cultures)
• Uncompetitive costs to coming to France
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Social charges
Day-offs
Cost of language translation
Indirect cost due to lack of communication
between French Managers and the HQ
Key Benefits of Being in
France
• Quality of the workforce
• Market growth potential
• Better capture customer needs
Essential Advice
• AVAYA believes that only a “French”
company can operate in France
– French-oriented customer interfacing
– American Management Style
We Thank
• Mr. Gilles Paris,
– CEO
– E-mail: [email protected]
– Tel: 01.40.94.78.00
• Mr. Olivier COUSTON
– Sales Director
– E-mail: [email protected]
– Tel: 01.45.15.64.53
• Mr. Renaud MORELET
– Finance Director
– E-mail: [email protected]
– Tel: 01.40.94.78.00
• Mme Patricia LORREYTE
– HR Director
– Tel: 01.40.94.78.00
Bibliography
• References
– Websites
• www.avaya.com and www.avaya.fr
– Corporate Information, Annual Reports
– Document
• AVAYA-TENOVIS Performance Management
• Appendix : questionnaires
Our Team
• From HEC School of Management - Paris
MBA Program
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Ms. Jiyoon AN
Mr. Pedro V. ALMEIDA
Mr. Guillaume RAOUX
Mr. Mame D. SY