67
Fraunhofer IPK, Berlin Seminar on “Get Ready for an Innovation Explosion” Bangkok July, 24 th 2014 Prof. Dr.-Ing. Holger Kohl Director Corporate Management Fraunhofer IPK Berlin – Germany Benchmarking The effective tool for the Innovative organization

The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Embed Size (px)

Citation preview

Page 1: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Seminar on “Get Ready for an Innovation Explosion”BangkokJuly, 24th 2014

Prof. Dr.-Ing. Holger KohlDirectorCorporate ManagementFraunhofer IPKBerlin – Germany

BenchmarkingThe effective tool for the Innovative organization

Page 2: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Agenda

What is Benchmarking2

4 Intellectual Capital

3 Introduction to BenchmarkIndex

The Fraunhofer Gesellschaft1

Page 3: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

The Fraunhofer-Gesellschaft

Fraunhofer is the largest organization for applied research in Europe.

Our Customers:

Industry

Service sector

Public administration

Page 4: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Fraunhofer is the largest organization for applied research in Europe

66 institutes and independent research units

The majority of the more than 22,000 staff are qualified scientists and engineers

An annual research volume of €1.9 billion, of which €1.6 billion is generated through contract research. More than 70 percent of this research revenue derives from contracts with

industry and from publicly financed research projects. Almost 30 percent is contributed by the German federal government and the

Länder governments in the form of institutional financing.

International collaboration through representative offices in Europe, the US, Asia and the Middle East

Page 5: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

66 institutes and independent research units

more than 22,000 staff

Budget ca. 2.2 billion €

The Fraunhofer-Gesellschaft Main locations of the Fraunhofer Institutesand Research Institutions in Germany

Page 6: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

BostonPlymouth

East LansingSan José

NewarkMaryland

Cambridge

LondonVancouver

Santiago de Chile

Salvador

São PauloCampinas

Sydney

Dubai

Bangalore

Jakarta

AmpangSingapore

Beijing SeoulTokyoSendai

Cairo

Jerusalem

Brussels

Porto

Vienna

Bolzano GrazBudapest

Wrocław

Gothenburg

Thessaloniki

Glasgow

Paris

Southampton

Subsidiary Center Project Center ICON / Strategic Cooperation Representative / Marketing Office Senior Advisor

87,5 Mio €

(2012, without subsidiaries, without licensing)

International activities and revenues worldwide

>10 Mio € 8-10 Mio € 6-8 Mio € 4-6 Mio € 2-4 Mio € 1-2 Mio € 0,5-1 Mio €

Stellenbosch

Page 7: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Fraunhofer international activities

Page 8: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Page 9: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Fraunhofer Representative Offices and Senior Advisor in Asia

Representative Office KoreaJoowahn Kim

Representative Office IndiaAnandi Iyer

Representative Office BeijingXiading Han

Representative Office JapanDr. Lorenz Granrath

Representative Office IndonesiaDr. Ida-Bagus Kesawa Narayana

SeoulBeijing

Bangalore

Tokyo

Jakarta

Ampang

Senior AdvisorMalaysiaDr. Ahmad B. Ibrahim

Page 10: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Production Technology Center - Berlin

Quality ManagementProf. Dr.-Ing. R. Jochem

Virtual Product CreationProf. Dr.-Ing. R. Stark

Corporate ManagementProf. Dr.-Ing. H. Kohl

Production SystemsProf. Dr. h. c. Dr.-Ing. E. Uhlmann

Medical TechnologyProf. Dr.-Ing. E. Keeve

Fraunhofer-GesellschaftInstitute for Production Systems and Design Technology (IPK)

Assembly Technology and Factory ManagementProf. Dr.-Ing. G. Seliger

Industrial Automation TechnologyProf. Dr.-Ing. J. Krüger

Machine Tools and Manufacturing TechnologyProf. Dr. h. c. Dr.-Ing. E. Uhlmann

University of Technology BerlinInstitute for Machine Tools and Factory Management (IWF)

Industrial Information TechnologyProf. Dr.-Ing. R. Stark

Quality ScienceProf. Dr.-Ing. R. Jochem

Joining and Coating TechnologyTemporary Administration: Prof. Dr.-Ing. R. Stark

Micro Production TechnologyProf. Dr. h. c. Dr.-Ing. E. Uhlmann

Joining and Coating TechnologyProf. Dr.-Ing. Michael Rethmeier

Automation TechnologyProf. Dr.-Ing. J. Krüger

Page 11: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Facts and Figures 1986 IWF and IPK move into PTZ 517 employees (scientists, service and students) More than 70 test areas and 7 special laboratories on about

7 100 m² Budget of 24,6 Mio. Euro in 2009 Spin-offs and start-ups by 12 % of former staff members

Mission and Goals Fundamental research and education as well as applied

research and development Optimization of industrial processes – from the product idea

through to product development, design and manufacture Fast transfer of R&D results into practical applications Cost-effective and environmentally friendly solutions for

SME

Production Technology Center in Berlin

Page 12: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

München

Holzkirchen

Freiburg

Efringen-Kirchen

FreisingStuttgart

PfinztalKarlsruheSaarbrücken

St. IngbertKaiserslautern

DarmstadtWürzburg

Erlangen

Nürnberg

Ilmenau

Schkopau

Teltow

Oberhausen

Duisburg

EuskirchenAachen St. AugustinSchmallenberg

Dortmund

PotsdamBerlin

RostockLübeck

Itzehoe

Braunschweig

Hannover

Bremen

Bremerhaven

Jena

Leipzig

Chemnitz

Dresden

CottbusMagdeburg

Halle

Fürth

Wachtberg

Ettlingen

Holzen

Oldenburg

Freiberg

Paderborn

Kassel

GießenErfurt

Augsburg

Oberpfaffenhofen

Garching

Straubing

Bayreuth

Bronnbach

Prien

Tools and Practices for implementing successful innovation

Corporate Planning and Logistics

Management of Innovation Systems

Balanced Scorecard

Process Management Knowledge Management

Information Centre Benchmarking

Corporate Management

Management of Intellectual Capital

Page 13: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Established in 1994 as first Benchmarking Centre in Germany

Partnership with numerous companies

Founding member of the Global Benchmarking Network (GBN)

Founding member of the European SME Benchmarking Network (ESBN)

Experience trough initiating and conducting BM-Projects in industry, the service sector and the public sector

Information Centre Benchmarking (ICB)

Page 14: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Homepage of ICB - www.benchmarking.fhg.de

Page 15: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

IZBBenchmarking-

Network

ESBN SME Development

Network

GBN Global Benchmarking

Network

Information Centre Benchmarking (ICB) - Networks

Page 16: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK

>>Valley of Death<< of Innovation as a challenge for innovation systems

Government

Basic Research and Invention

Enterprises and founding investors

Prototypes, Demonstration

and Market Analysis

Venture Capitalists

Early Commercialization

Creditors and investors

Market Entry and Growth

Typical

Investors

Core

Activities

Ava

ilab

ility

of

Cap

ital

>>Valley of Death<<

Page 17: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer

Universities perform excellent scientific

research

Research cycle

Innovation cycleRTOs bridge the

innovation gap with technological R&D

Innovativecompanies createnew products

Intensive exchange with society

Societal challenge as future markets - being ready for global competition

Fraunhofer’s position in the German Innovation System

close cooperation with universities, every Institutes Director is also Professor at this University

close cooperation with Max-Planck-Institutes

collaboration with international centers of excellence

professional R&D services to industry

demand driven research combined with scientific excellence

autonomy of institutes combined with simple corporate rules

working in networks

research services for SME as well as industry (~50/50)

Research services for high-tech companies (>3,5 % R&D) as well as non R&D- intensive companies (0-3,5%)*

Close affiliation with industry through Fraunhofer advisory boards

* euqally important factor in national innovation avtivity;see O. Som (Fraunhofer ISI): Innovation without R&D, Springer 2012

Page 18: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Agenda

What is Benchmarking2

4 Intellectual Capital

3 Introduction to BenchmarkIndex

The Fraunhofer Gesellschaft1

Page 19: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Innovation

National Wealth

World standard products

Competitive productionprocesses

Intellectual Capital

Human CapitalUse technology

Structural CapitalManage technologyRelational Capital

Communicate technology

BenchmarkingIntellectual Capital

Statements

Development of Economy - Innovation System

Page 20: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

1993 2000 2006 2008 2010

1. Mission and Vision Statements

1. Strategic Planning 1. Strategic Planning 1. Benchmarking 1. Benchmarking

2. Customer Satisfaction2. Mission and Vision

Statements2. CRM 2. Strategic Planning 2. Strategic Planning

3. TQM 3. Benchmarking3. Customer

Segmentation3. Mission and Vision

Statements3. Mission and Vision

Statements

4. Competitor Profiling 4. Outsourcing 4. Benchmarking 4. CRM 4. CRM

5. Benchmarking 5. Customer Satisfaction5. Mission and Vision

Statements5. Outsourcing 5. Outsourcing

6. Pay-for-Performance 6. Growth Strategies 6. Core Competencies 6. Balanced Scorecard 6. Balanced Scorecard

7. Reengineering 7. Pay-for-Performance 7. Outsourcing7. Customer

Segmentation7. Core Competencies

8. Strategic Alliances 8. Strategic Alliances8. Business Process

Reengineering8. Business Process

Reengineering8. Change Management

Programs

9. Cycle Time Reduction9. Customer

Segmentation9. Scenario and

Contingency Planning9. Core Competencies 9. Strategic Alliances

10. Self-Directed Teams 10. Core Compentecies10.Knowledge

Management10.Mergers and

Acquisitions10.Customer

Segmentation

Source: Bain & Company - Management Tools and Trends 2011

Top 10 Management Trends and Practices 1993-2010

Page 21: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Benchmarking is a systematic and continuous process, where the own performance is measured and compared with Best Practices in order to identify improvement potential.

Common Definition of Benchmarking

BestPractices

Benchmark

Participant 1“Best Practice”

P 3

Perf

orm

ance

P 2 P 4

Potential forimprovement=

Benchmark

Participant 1“Best Practice”

P 3

Perf

orm

ance

P 2 P 4

Potential forimprovement=

Page 22: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Benchmarking: Diagnoses vs. Medicine

Pizzazutaten Pizza(serviert)

Bestellwunsch

Bestellungdurch-geführt

Kunde(hungrig)

Service

backenvorbereiten servierenPizzarezept Zutatenbeschaffen

mit Kundensprechen

Bestellungaufnehmen

Bestellungweiterleiten

Servier-Auftrag

auslösen

Servier-auftrag

Service Küchenchef

Koch Ofen ServiceEinkauf

Küchen-abläufesteuern

Küchenchef

Pizzazutaten Pizza(serviert)

Bestellwunsch

Bestellungdurch-geführt

Kunde(hungrig)

Service

backenvorbereiten servierenPizzarezept Zutatenbeschaffen

mit Kundensprechen

Bestellungaufnehmen

Bestellungweiterleiten

Servier-Auftrag

auslösen

Servier-auftrag

Service Küchenchef

Koch Ofen ServiceEinkauf

Küchen-abläufesteuern

Küchenchef

Benchmark

Participant 1“Best Practice”

P 3

Perf

orm

ance

P 2 P 4

Potential forimprovement=

Page 23: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Major Types of Benchmarking

Structured by Benchmarking-Partners

Structured by applied Benchmarking Parameters

Structured by Benchmarking Object

Structured by Area of Application

Business Sectors Enterprises Framework Conditions

Product Strategy

Internal Branch oriented Branch independent

Indicators Business Processes

Process

Page 24: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Improvement potential – related to the type ofBenchmarking-Methods and Partners

External BenchmarkingGai

ning

Kno

wle

dge

on B

est P

ract

ices

Types of Benchmarking

Internal Benchmarking

Corporate orientedBest in Company

Trust orientedBest in Group

Competitive BenchmarkingBest in Competition

Branch orientedBest in Class

Branch IndependentBest Practice

Page 25: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Early application of the main idea

early 20th century

Henry Ford(assembly line)

First usage in other spheres1950 - 1970

Ohno Toyota(JIT)

Current BM Development1979 - 1999

Xerox(BM as a mgmt concept)

Historic milestones in Benchmarking

Page 26: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Early application of the main idea

early 20th century

Henry Ford(assembly line)

First usage in other spheres1950 - 1970

Ohno Toyota(JIT)

Current BM Development1979 - 1999

Xerox(BM as a mgmt concept)

Historic milestones in Benchmarking

Page 27: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Early application of the main idea

early 20th century

Henry Ford(assembly line)

First usage in other spheres1950 - 1970

Ohno Toyota(JIT)

Current BM Development1979 - 1999

Xerox(BM as a mgmt concept)

Historic milestones in Benchmarking

Page 28: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Benchmarking ExampleCost Benchmarking

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Company A

production

best values =

Cost ReductionPotential for Company A:50% of the own administration costsby increasing efficiencyto the best value in thiscomparison (BU C)

weakest performance in this comparison

normalisation:- sold quantity- produced quantity

Page 29: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Just a few persons in charge areaccompanying the process

Example: Comparison and Measures

benchmarking-partnerautomotive industry

benchmarking-partnersemiconductor-industry

Page 30: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Best-Practice-Methods of benchmarking-partners for Lessons Learnt in project management

Identification of Best Practices by using process reference models

Page 31: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Intranet-based implementation of Best Practices Example: via Benchmarking – Process Assistant

Page 32: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Agenda

What is Benchmarking2

4 Intellectual Capital

3 Introduction to BenchmarkIndex

The Fraunhofer Gesellschaft1

Page 33: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

BenchmarkIndex:Benchmarking for small and medium-sized enterprises (SME)

Key-figure-based Benchmarking analysis(>100.000 Companies)

Page 34: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Main productivity-obstruction in Germany

74% Classical management errors

- 45% Poor planning and control

- 17% Lack of supervision and leadership

- 12% Lack of communication

As well as

- Lack of qualifications

- IT Problems

- Lack of working morale

Source: Czipin & Proudfoot Consulting GmbH

Productivity problems in SME‘s in Germany

The value creation in germany‘s SME‘scan be increased by € 200 billion!

Page 35: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Usage of resources / Knowledge of methods Limited financial resources Limited staff (project vs. daily business) Lack of benchmarking know-how

General problems of BM Data availability Skepticism from the opening to the outside

(especially competition) Barriers in minds („Not-invented-here-Syndrome“)

Motivation Positioning within the same industry Benchmarking requirements of the DIN ISO 9000:2000 /

QS 9000 / VDA 6.1. / TS 16949 Benchmarking as a precursor of the rating for SME‘s

(Basel II)

Initials situation of Benchmarking for SME‘sBarriers / Motivation

Page 36: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Makes you aware of the „performance gap” of your

current position and your goal.

Determines the „size“ of the gap between you and your

competition – with this information an action-plan can be

established.

Provides data on the relative performance compared to the

strongest and weakest enterprise within the database.

What is the BenchmarkIndex capable of?

Page 37: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Current Distribution of the BenchmarkIndex

UK

Ireland

Germany

NetherlandsPoland

CzechRepublic

Slovak Republic

Portugal

Spain

Italy

Greece

Austria

Australia

South-Africa

USA

UnitedArabic

Emirates

Singapore

South-Korea

Current Candidates :- Russia- Brazil- Croatia- Saudi Arabia- Kuwait- Bahrain

Lithuania

BiH

Malaysia

China - Beijing> 80.000 Financial Data> 22.000 Benchmarking-Data

Page 38: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Financials

Customers Processes

Learning & Growth

Business– current performance– vision & goals– strategy– plans

Structuring of the KPIs within the BenchmarkIndexBalanced Scorecard

Page 39: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Results analysis & Evaluation Stage Cause-effect relationships

CustomersCustomers

FinancialsFinancials

Learning & Growth

Learning & Growth

ProcessesProcesses

Page 40: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Causes-Effects-Relationship for measure „Total Turnover Grows“

Learning & Growth Perspective

R & D Expenditures [%]

New Products and Services [%]

CustomerPerspective Sales on new Products and Services [%]

Customer Growth [%]

Financial Perspective

Total Turnover Grows [%]

Cau

ses

Effe

cts

Process Perspective Product to Market [Months]

Page 41: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Stepwise Approach towards Best Practice

Identified GapsIdentification

of causesAction Plan

Figure I

First level question I

First level question II

Figure III

Figure IV

Figure II

Page 42: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Step 2

Step 1

Step 3

Step 4 & 5

Step 6Annual

Repetition

Financial Perspective

Process Perspective

Completion of questionnaire

Data Transfer to the worldwide biggest Benchmarking Database for SMEs (>100.000 Companies)

Validation of Data

Report and Action Plan

CustomerPerspective

Learning & Growth

Perspective

Procedure of the BenchmarkIndex (1/2)

Page 43: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

A standardized questionnaire about enterprise data is filled out with support by an

“Advisor” within the enterprise.

The “Advisor” verifies and validates the data to eliminate errors and ensure comparability.

The data is sent to the central database and is compared within the industry (SIC-Code).

The data is evaluated and a report is generated.

A consultant presents the report and assists in developing an action plan.

The process should be repeated after about one year.

Procedure of the BenchmarkIndex (2/2)

Completion of questionnaire

Validation of Data

Data Transfer to Database

Report Action Plan

AnnualRepetition

Page 44: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

BenchmarkIndex Results – Graphic (Example)

Page 45: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Strengths / Weaknesses analysis using detailed Key

Performance Indicators (KPI)

Utilization of the KPI‘s for the development / expansion of

an internal controlling-system

Classification of the enterprise within the industry

Industry trend-developments

By a combined interpretation of single KPI‘s of the report,

inefficient management techniques can be uncovered

E.g.: Duration of accounts payable / receivables

Conclusions on creditor / debtor management

or on an already existing loss of discounts

Evaluation results of the BM-Report

Page 46: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

1. Is the company making enough money?(Example)

Financial Perspective

Customer Perspective

Learning & Growth Perspective

Process Perspective

Page 47: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Profit Margin too low?Profit Margin too low?

Company is not making enough

Money!

Company is not making enough

Money!

Return on Capital or Assets too low ?

Return on Capital or Assets too low ?

Results analysis & Evaluation Stage (Example)Financial Perspective

Net Profit Margin [%]

Return on Capital Employed [%]

Return on Net Assets [%]

Return on Total Assets [%]

Fixed Costs as a Percentage of Sales [%]

Staff Costs as a Percentage of Sales [%]

Page 48: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Nr. Activity Reason Responsibility Finished

1 Quality Gates Scrap Rate < 2% Production depart. December, 31st, 2014

2 … … … …

3

4

5

6

7

8

9

10

11

12

Development of an Action Plan

Page 49: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

International BenchmarkingCountry Comparison

Direct Employees/Indirect Employees (#)Results:- Concerning the Overhead, the weaker SMEs have 2.5 times indirect employees compared to the Best SMEs.

- Not optimised Business Processes could increase the effort of the Management tremendously.

Austria Germany Greece Ireland Italy Portugal UKSpain

Source: Cranfield University: Closing The Gap report

Page 50: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

International BenchmarkingCountry Comparison

Results:- More then 50% of the SMEs do not have any R&D-Expenditure at all„Order Production - no Innovations“.

- Only the upper 25% of the Germany, UK, Ireland and Austria have R&D Expenditure per Turnover of more than 1%.

R&D Expenditure / Turnover (%)

Austria Germany Greece Ireland Italy Portugal UKSpain

Source: Cranfield University: Closing The Gap report

Page 51: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

International BenchmarkingCountry Comparison

Results:- 25% of the SMEs do not generate any Income with New Customers, new Products or on new Markets

- The upper SMEs generate already 15% of their Turnover with new Income

- Germany is the best country among this comparison in terms of generating New Income

Total New Income / Turnover (%)

Austria Germany Greece Ireland Italy Portugal UKSpain

Source: Cranfield University: Closing The Gap report

Page 52: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

BenchmarkIndex £38 million increase in profit

56% increase in productivity

75% users would recommend to others

77% businesses report BI helped them make changes

93% advisers satisfied with overall service

Source: Cranfield University: Closing The Gap report

a proven track record of successexample: UK

Page 53: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

ProductDevelopment[Program Manager]

Policy[board]

Strategic Implementation[Project Manager]

Benchmarking Realization[BenchmarkIndex Advisors]

Strategic Framework„BenchmarkIndex“ Germany

Information Policy, Strategy,Management

Page 54: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Concept for an Enterprise Support Center

Development Center for Competitiveness & Innovation

Innovation Support

Engineering R&D Services Energy

Efficiency Process

Optimization Management

Systems

Best Practice Transfer

Visiting Programin selected areas QM HRM Market Analysis Performance

Management Advisory Board Auditors

Funding Systems for

SMEs Integration in

international clusters

Direct support for Integration of Strategic SMEs

International R&D Programs

Performance Analysis

BMI Strategic

Planning Innovation Audit Cluster

Monitoring

Best Practice Award

Factory / Cluster

BMI Data for Best

Factory Award

System

Annual Ceremony

Thai TOP 20

Export Support

Quality Requirements

Packaging Legal Issues Tariffs Matchmaking

with strategic industry clusters

Consultant Register(external and internal)

Assessment Tool for funding applications

Funding Support

Page 55: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Instrument Aim Tasks Results

Innovation Support

Provision of technology expertise to SME

‐ Collection of specific SME requirements and Needs‐ Provision of workshops and training courses for SME‐ Technology trend scouting‐ Support SME to find the right local consultant

‐ Annual SME requirements and Needs Report‐ Organized Workshops and training courses‐ Thai Technology Trend report

Performance Analysis

Monitoring competitiveness along Thai

‐ Benchmarking Index Analysis‐ Intellectual Capital Statement (ICS) for Thai‐ Technology Data collection (e.g. ISO certification), ‐ Auditing companies 

‐ Up to date benchmarking Index for Thai clusters

‐ Annual Report about Thai ICS and conclusions‐ Technology Application Report

Best Practice Transfer

Support local cooperation to Increase Knowledge about best practices

‐ Organize visiting programs inside ASEAN Region‐ Organize visiting programs abroad‐ Organize Best Practice Transfer Workshops supported 

by an advisory board

‐ Annual summary of Visits‐ Executive summary of Best Practice Transfer 

workshops

Best Practice Award

Increase Visibility of Thai in terms of  Best Practices

‐ Top 20 companies in Thai will be selected, indicators coming from benchmarking index and specific analysis 

‐ Organize Award Event

‐ Annual TOP 20 Ranking Journal  of Companies in Thailand

‐ Award Event

Funding Systems for SME

Support SME to implement new technologies

‐ Organize Information workshops regarding international funding opportunities

‐ Support financing of SME technology investments

‐ Information workshops‐ Monthly report for funding opportunities‐ Philippines SME support programs 

Export Support

Improve export possibilities for local SME

‐ Provide guidelines for exporting to specific countries‐ Provide contact persons in other countries‐ Administrative and legal support through consultants

‐ Export Guidelines annually updated

Consultancy Register

Provide excellent consultancy resources to SME

‐ Establish a qualified list of consultants for each topic‐ Provide consultancy training and certification for 

applying specific instruments (e.g. benchmarking index)

‐ Consultants list – updated‐ Training and certification of consultants

Concept for an Enterprise Support Center

Page 56: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Agenda

What is Benchmarking2

4 Intellectual Capital

3 Introduction to BenchmarkIndex

The Fraunhofer Gesellschaft1

Page 57: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Why Measuring Intellectual Capital (IC)?

Microsoft Corporation 1978

Would you have invested? The organizational value

consists of tangible and intangible assets, which are mostly undocumented in traditional accounting systems

Investors (Rating according to Basel II) demand plausible evidence of corporate values. Companies in knowledge-intensive fields have difficulties in proving their value to investors.

Legal regulations commit organisations to legitimate their intangible assets. (Austrian UOG, IAS 38, DRS 12 and 5)

Page 58: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

National IC Report: Average Impact of Intellectual Capital on Business Success

5,1

6,3

7,1

8,1

0 1 2 3 4 5 6 7 8 9 10

Source: Survey Results „Knowledge Economy Germany“, Fraunhofer IPK 2010 (N=1.000)

Human Capital

Structural Capital

Relational Capital

Tangible Resources

Page 59: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

What is an Intellectual Capital Statement?

Definition Intellectual Capital Statement (ICS): An Intellectual Capital Statement is an instrument for the focused description and development of the Intellectual Capital in an organisation.

It shows the interdependencies between the organisational aims, the business processes, the Intellectual Capital (IC) and the business success and describes these elements by means of indicators.

Intellectual capital (IC) is defined as “existing knowledge of an organisation that contributes to future success” and is subdivided into three categories: Human Capital (HC), e.g. qualification, leadership, motivation

Structural Capital (SC), e.g. innovation, knowledge transfer

Relational Capital (RC), e.g. relations to customers, partners

D

Page 60: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

The InCaS Framework: ICS Structural Model

Business environment(Possibilities & risks)

Business processesBusiness-

Strategyknowledge

Vision Businesssuccess

Knowledge processes

Otherresources

Initialsituation

Humancapital

Structuralcapital

Relationalcapital

Intellectual capital External

impact

Measures

Organization

Page 61: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Standard IC Factors

Human Capital Professional Competence Social Competence Employee Motivation Leadership Ability

Structural Capital Internal Co-operation and Knowledge Transfer Management Instruments IT and Explicit Knowledge Product Innovation Process Optimisation and Innovation Corporate Culture

Relational Capital Customer Relationships Supplier Relationships Public Relationships Investor Relationships Relationships to Co-operation PartnersPatente

Page 62: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

Intellectual Capital Statements (ICS) - Toolbox

Page 63: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

© Fraunhofer IPK 2014

SC-4A

SC-1SC-2

SC-3

SC-4

SC-5SC-6

SC-1A

SC-3ASC-5A

SC-6A

SC-4B (Best in Class)

0%

7%

13%

18% 56% 93%

Average Assessment

Rel

ativ

e In

fluen

ce

SC-4

SC-4A

SC-4B (Best in Class)

no need for action

develope

analyse

stabilise

IC Management Portfolio (Sector Service, N=27)Structural Capital

SC-1 Internal co-operation and knowledge transferSC-2 Management instrumentsSC-3 Information technology and explicit knowledgeSC-4 Product innovationSC-5 Process optimisation and innovationSC-6 Corporate culture

Structural Capital

Intellectual Capital BenchmarkingFinding Best in Class Performers

SC-4A Company A

SC-4B Company B (Best in Class)

SC-4 Ø Sector Services

Page 64: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Impact of ICS on Financial Analysts’ Assessment of Future Earnings Potential

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Positive Neutral

Neutral

Neutral NeutralNegative

Case A Case B

With intellectual capital report

Without intellectual capital report

With intellectual capital report

Without intellectual capital report

Positive Positive

Negative

Page 65: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Summary of Results in IC Benchmarking Report

Structural Capital - ViewYour assessment compared to your peer group based on standard IC Factors (N=42)

82,50

70,00

86,67

23,33

90,00

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Internal co-operationand knowdege transfer

Managementinstruments

Information technologyand innovation

Product innovation

Process optimisationand innovation

Corporate culture

Internal co-operation and knowledge transfer

(SC-1)

Management Instruments(SC-2)

Information technology and innovation

(SC-3)

Product innovation(SC-4)

Process optimisation and innovation

(SC-5)

Corporate culture(SC-6)

Page 66: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

Main Results of the German ICS Pilot Project

Efficient method to start IC Management in SMEs.

Intellectual Capital Statements (ICS) were implemented in 50 SMEs from different regions and sectors.

Guideline for ICS implementation in German and English language published, more than 40.000 copies distributed.

Software “Wissensbilanz-Toolbox” available since July 2006, more than 20.000 copies distributed.

Financial Times and Commerzbank Award 2005 for one of the first 14 Pilot-SME

30 Roadshows for entrepreneurs with more than 1.000 participants.

More than 200 users and trainers trained

www.akwissensbilanz.org

Page 67: The effective tool for the Innovative organization Get Ready for an... · Analysis Venture Capitalists Early ... innovation gap with technological R&D Innovative companies create

Fraunhofer IPK, Berlin

© B

ild: F

rau

nh

ofe

r IP

K/K

on

stan

tin

Heß

Thank you for your kind attention.