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  • TietoEnator was created in 1999 when the Finnish based company Tieto and the Swedish based company Enator merged on 7 July 1999. With 13,000 employees and annual net sales of EUR 1.3 billion, TietoEnator is a leading supplier of high-value-added IT services in Europe. The Group operates in more than 20 countries; in addition to Europe also in USA and China. TietoEnator specialises in consulting, building and hosting its customer’s core business systems in the digital economy. A major part of all products and services in this society are produced, distributed and consumed digitally via data networks. TietoEnator is playing an active role in building this global society.
  • presentation Page 1 TietoEnator © 2003

    1. 1. Acquisition Integration - TE Way Jaakko Parkkinen , Vice President TietoEnator The First Baltic IT Cruise November 21-23,2004
    2. 2. <ul><li>Created in 1999 by a merger of Tieto and Enator </li></ul><ul><li>Annual net sales exceeding EUR 1,3 billion </li></ul><ul><li>Close to 14.000 employees in more than 20 countries </li></ul><ul><li>Strong Nordic platform </li></ul><ul><li>Global solutions spearheads </li></ul><ul><li>Listed on Helsinki and Stockholm Exchanges </li></ul>TietoEnator
    3. 3. TietoEnator
    4. 4. TietoEnator acquisitions during 1-9/2004 <ul><li>Name Country Type BA Net sales MEUR </li></ul><ul><li>Ki Consulting Sweden Acquisition T&M 90.0 </li></ul><ul><li>Inveos Germany Acquisition B&I 17.5 </li></ul><ul><li>Jons-Medical Finland Acquisition P&H 0.4 </li></ul><ul><li>Octel Finland Outsourcing P&N 20.0 </li></ul><ul><li>Respons Norway Acquisition P&H 3.1 </li></ul><ul><li>TE Support Estonia JV/outsourcing P&N NA </li></ul><ul><li>Doctorex Finland Acquisition P&H 1.3 </li></ul><ul><li>Ilmarinen Finland JV/outsourcing B&I for TE 14.0 </li></ul><ul><li>Tekla Finland Acquisition P&L 8.8 </li></ul>
    5. 5. TietoEnator acquisitions in Baltic counties <ul><li>TIETO CORPORATION STOCK EXCHANGE RELEASE 15 JUNE 1998 13.00 PM 1 (1)  </li></ul><ul><ul><li>Tieto acquires Latvia's largest financial software company </li></ul></ul><ul><ul><li>Tieto Corporation has acquired a majority holding in KONTS SIA, a high-technology company in Latvia specializing in payment card systems. The company holds a leading position in the Latvian market for payment card systems as well as 60 customers in eight countries in the former Soviet Union. Konts was set up in 1992 and it operates in the capital Riga. Its net sales in 1997 totalled FIM 6.6 million and it has 62 employees. In the first stage 51.6 % of the shares of Konts will be transferred to Tieto, which will acquire the remainder in the next three years. The sellers are …. </li></ul></ul><ul><li>TIETOENATOR CORPORATION PRESS RELEASE 20 MARCH 2002 12.30 PM 1(1) </li></ul><ul><ul><li>TietoEnator buys Estonian Softshark AS </li></ul></ul><ul><ul><li>TietoEnator has acquired the entire stock of Softshark AS. Softshark, totally owned by its founders, is one of the leading software suppliers to the Estonian banking and finance market. The acquisition strengthens TietoEnator's position as the largest information technology partner of the Baltic banking and finance business. </li></ul></ul><ul><ul><li>Softshark employs 13 people and … </li></ul></ul>
    6. 6. Question to be answered <ul><li>Define: What is the ambition level of integration ? </li></ul>
    7. 7. What is TE Way? <ul><li>The TE Way represents the minimum level of consistency and common guidelines within TietoEnator: our common way of doing business. </li></ul><ul><li>Even though there are different prerequisites within various competence and focus areas in the organisation, the TE Way identifies the common Guidelines and the lowest common denominators we have within the entire corporation. </li></ul><ul><li>It is important that every part of the organisation has the best-suited business models, relevant competence etc to reach its specific goals. </li></ul><ul><li>However, to reach our common goals we need to have a certain amount of consistency within the organisation . </li></ul><ul><li>This minimum level of consistency and our common Guidelines to reach those goals is represented in the TE Way. </li></ul>
    8. 8. TE Way
    9. 9. TE Way <ul><li>The TE Way constitutes of the Guiding Principles, Policies, Guidelines, Forums and Business System. </li></ul><ul><li>In order to make the TE Way clearer and easier to access we have gathered all policies, guidelines and forums into one common structure. </li></ul><ul><li>The purpose is to make it possible for you to quickly find the policies and guidelines you need - or through checking the different Group Forums see whom to contact in, your own Business Area representative, or maybe someone at Group Functions. </li></ul>
    10. 10. Guiding Principles
    11. 11. The TE Way areas are: <ul><li>Group Governance </li></ul><ul><ul><ul><ul><ul><li>Group Governance Policy defines the overall principles of role allocation between the Group and BA's, and related principles. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Strategic Management Terminology Policy manifests the harmonization of key strategic terminology within TietoEnator Group. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Group Knowledge Management Guideline defines the values and principles of managing organizational knowledge in TietoEnator. </li></ul></ul></ul></ul></ul><ul><li>Security </li></ul><ul><ul><ul><ul><ul><li>Operational security aims at business continuity in all circumstances </li></ul></ul></ul></ul></ul>
    12. 12. The TE Way areas are: <ul><li>Risk Management </li></ul><ul><ul><ul><ul><ul><li>By the word &quot;risk&quot; we mean uncertainty about the future performance. The uncertainty arises from external forces, accidental events or internal decision-making. A risk is not automatically a negative one, since the outcome can also be positive </li></ul></ul></ul></ul></ul><ul><li>Finance & Treasury </li></ul><ul><ul><ul><ul><ul><li>Each company is required by the law to have a proper management of finances. The monetary processes always reflect the real processes of the company. This management is not just a mandatory must, it should also been seen as a function which assists the organization to meet its targets </li></ul></ul></ul></ul></ul>
    13. 13. The TE Way areas are: <ul><li>Legal </li></ul><ul><ul><ul><ul><ul><li>TietoEnator is a global group of companies acting in several jurisdictions and in many continents. Monitoring and protecting TietoEnator's legal interest plays an important part in the daily business of the TietoEnator Group. </li></ul></ul></ul></ul></ul><ul><li>Human Resources Management </li></ul><ul><ul><ul><ul><ul><li>The policies describe a consistent view on managing HR in TietoEnator. The guidelines are strong recommendations on how to act in order to reach the ambition level in the specific areas of the guideline. </li></ul></ul></ul></ul></ul><ul><li>ICT Infrastructure </li></ul><ul><ul><ul><ul><ul><li>Information/knowledge sharing and development of ICT Infra </li></ul></ul></ul></ul></ul>
    14. 14. The TE Way areas are: <ul><li>Communications & IR </li></ul><ul><ul><ul><ul><ul><li>Communication is an important - in fact critical - tool for reaching our objective - to become the world-leading provider of high-value-added IT-services in selected customer industries. Without a clear, consistent and structured communication with our target groups - our customers, our employees, our shareholders and the media and society at large through different channels, ranging from the Focus intranet to how we use our logotype, we will never reach our goal. </li></ul></ul></ul></ul></ul><ul><li>Mergers & Acquisition </li></ul><ul><ul><ul><ul><ul><li>Acquisitions have been and continue to be one way for us to grow and to implement our strategy. We aim at strengthening the market position, our capabilities and our offerings. The present TietoEnator is the outcome of many acquisitions or similar kind of transactions, and our procedures and experiences definitely are an asset. </li></ul></ul></ul></ul></ul>
    15. 15. Policies <ul><li>Overall intentions and directions of mandatory character, expressed by the top management of the Group </li></ul><ul><ul><li>Carefully chosen </li></ul></ul><ul><ul><li>Crucial </li></ul></ul><ul><ul><li>Enforceable </li></ul></ul><ul><ul><li>Supervised by GF </li></ul></ul><ul><ul><li>BA Policies - Overall intentions and directions of mandatory character, expressed by the top management of each BA - Not in contradiction with Group Policies </li></ul></ul>
    16. 16. Policies - examples: <ul><li>Annual Decision-Making in Subsidiaries </li></ul><ul><li>Brand Policy </li></ul><ul><li>Communications Policy </li></ul><ul><li>Strategic Management Terminology </li></ul><ul><li>Treasury Policy </li></ul><ul><li>Decision Making Policy </li></ul><ul><li>etc. </li></ul>
    17. 17. Guidelines <ul><li>Recommendations strongly backed by the top management of the Group </li></ul><ul><li>Fabric of Group Knowledge Management (KM) - Good / best practice catalyzing, creation, sharing - Top-down, bottom-up, learning-loops - Process development </li></ul><ul><li>BA Guidelines - Recommendations backed by the top management of each BA </li></ul>
    18. 18. Guidelines - examples: <ul><li>Press & stock-release Guideline </li></ul><ul><li>Transfer Pricing Guideline </li></ul><ul><li>Acquisition Tax Checklist, Guideline </li></ul><ul><li>Profit Distribution Guideline </li></ul><ul><li>Treasury Guideline </li></ul><ul><li>etc. </li></ul>
    19. 19. Forums <ul><li>Internal institutions of various disciplines and processes for </li></ul><ul><ul><li>assisting Group Policy enforcement </li></ul></ul><ul><ul><li>assisting awareness creation & dissemination of Group Guidelines </li></ul></ul><ul><ul><li>cross-BA information & knowledge transfer </li></ul></ul><ul><ul><li>catalyzing, managing & governing cross-BA co-operation </li></ul></ul><ul><ul><li>improving level of professionalism in process development </li></ul></ul>
    20. 20. Ways of Integration <ul><li>First entrance in Market </li></ul><ul><li>No synergy </li></ul><ul><li>No country companies exits </li></ul><ul><li>Addition to existing business </li></ul><ul><li>Add to existing legal structure </li></ul><ul><li>Minimal Integration meaning </li></ul><ul><li>TE Brand </li></ul><ul><li>TE Business System </li></ul><ul><li>TE Corporate Planning, </li></ul><ul><li>Reporting, Forecasting </li></ul><ul><li>Management support </li></ul><ul><li>Fast maximal Integration meaning </li></ul><ul><li>Minimum + </li></ul><ul><li>all other according to TE Way </li></ul>LIGHT HEAVY
    21. 21. 1. Matters to be agreed before signing: <ul><li>Matters that shall be agreed in the shareholders agreement in case there is an earn out between the buyer and seller: </li></ul><ul><ul><li>board members </li></ul></ul><ul><ul><li>issues that cannot be decided without acceptance of minority or majority </li></ul></ul><ul><ul><ul><li>material changes in the sphere of operations of the Company </li></ul></ul></ul><ul><ul><ul><li>organizational structure </li></ul></ul></ul><ul><ul><ul><li>compensation principles of employees </li></ul></ul></ul><ul><ul><ul><li>principles relating to loans to employees </li></ul></ul></ul><ul><ul><ul><li>strategic decisions relating to product development and human resources </li></ul></ul></ul><ul><ul><ul><li>standard conditions of client agreements </li></ul></ul></ul><ul><ul><ul><li>budgets </li></ul></ul></ul><ul><ul><ul><li>dividents </li></ul></ul></ul>
    22. 22. 2. Matters to be implemented from Day 1 <ul><li>TE Brand (transition plan) </li></ul><ul><ul><ul><li>Newly bought companies and brands will be incorporated into the </li></ul></ul></ul><ul><ul><ul><li>TietoEnator identity immediately or as an exception after approval by the Profile Group, within a maximum of two years . </li></ul></ul></ul><ul><li>TE Business System </li></ul><ul><ul><ul><li>The objective of Business system is to create a joint view in Banking and Insurance BU about the essential elements of business management and customer service. </li></ul></ul></ul><ul><ul><ul><li>Business system is a framework supporting the realisation of the selected business logic by providing the necessary guidelines and policies, business processes and tools. </li></ul></ul></ul><ul><ul><ul><li>B&I Management Group has the overall responsibility for the contents and development of Business system. </li></ul></ul></ul>
    23. 23. 2. Matters to be implemented from Day 1 <ul><li>TE Corporate </li></ul><ul><ul><li>Planning </li></ul></ul><ul><ul><ul><li>The planning on Group level consists of Strategic and Action Plans including key figures </li></ul></ul></ul><ul><ul><ul><li>Action Plans should be regarded as updates and specifications of the Strategic Plans </li></ul></ul></ul><ul><ul><li>Reporting </li></ul></ul><ul><ul><ul><li>Monthly </li></ul></ul></ul><ul><ul><ul><ul><li>Performance reporting + controller comments /9th working day </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Rolling forecasts / last working day </li></ul></ul></ul></ul><ul><ul><ul><li>Quarterly </li></ul></ul></ul><ul><ul><ul><ul><li>BA manager report </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Customer & country </li></ul></ul></ul></ul>
    24. 24. 2. Matters to be implemented from Day 1 <ul><li>Forecasting </li></ul><ul><ul><ul><li>support economic management and control </li></ul></ul></ul><ul><ul><ul><li>support communication with the financial market (Group level only) </li></ul></ul></ul><ul><ul><li>Objectives </li></ul></ul><ul><ul><ul><li>predict the outcome of coming 7-9 months </li></ul></ul></ul><ul><ul><ul><li>notice possibilities and problems earlier, be proactive </li></ul></ul></ul><ul><ul><ul><li>give as true picture as possible to board and financial markets -> credibility will increase </li></ul></ul></ul><ul><ul><ul><li>forecast should be the most likely outcome , not target setting </li></ul></ul></ul><ul><li>Management support </li></ul><ul><ul><ul><li>provide link to acquired company to TE </li></ul></ul></ul>
    25. 25. 2. Matters to be implemented from Day 1 <ul><li>Business Support Unit /Finance Administration: </li></ul><ul><li>General ledger </li></ul><ul><li>Accounts receivable </li></ul><ul><li>Accounts payable </li></ul><ul><li>Fixed assets </li></ul><ul><li>Treasury </li></ul><ul><li>IT Systems </li></ul><ul><li>Timetables </li></ul><ul><li>Financial Controlling </li></ul><ul><li>Reporting (Month, Interim, Annual) </li></ul><ul><li>Measures </li></ul><ul><li>Purchased 3rd party and internal services </li></ul><ul><li>Company X: </li></ul><ul><li>Profit responsibility </li></ul><ul><li>Invoicing </li></ul><ul><li>Time-reporting </li></ul><ul><li>Purchase invoice acceptance </li></ul><ul><li>Data Entry </li></ul><ul><ul><li>Travel information </li></ul></ul><ul><ul><li>Organizational data </li></ul></ul><ul><li>Business based reports </li></ul><ul><ul><li>Service profitability </li></ul></ul><ul><ul><li>Product version margins </li></ul></ul><ul><ul><li>Process & Quality information </li></ul></ul><ul><li>Analysis </li></ul><ul><li>Forecasting </li></ul><ul><li>Business Controlling </li></ul><ul><li>Strategy & Action Planning processes </li></ul>Finance responsibilities
    26. 26. Questions? <ul><li>... </li></ul>