In conversation with Dirk Lessing,
Dirk Knütter and Dirk Jurkowski
BY TEMEL KAHYAOGLU
(Published in The Produktkulturmagazin issue 1 2016)
Never mind that ever-present and domineering three-point stars from Untertürkheim. Focus instead on another global business founded there - in that liberating year of 1945 - and the truly important bit for today: that no fewer than three Dirks were involved in its recently delivered omni-channel project. Kaiser+Kraft, today operating under the umbrella of SDAX-listed and Stuttgart-based Takkt, is a flourishing company in business equipment. With over 50,000 items of office supplies and furniture on offer, from workbenches to complete prefab offices, it direly needed to omni-range all those mail orders all over the world.
Dirk Lessing, Chairman of the Board of Kaiser+Kraft Europa Gmbh, Dirk Knütter, Division Manager, Marketing Services and Dirk Jurkowski, Managing Director of Xtentio got it done. Our main man Temel Kahyaoglu met up with them.
Mr. Lessing, when did Kaiser+Kraft first enter the omni-range?
Dirk Lessing: Kaiser+Kraft recognized very early that also in B2B it had to move towards online and thus realized direct links to our major customers. In 2001 our first online store was launched. Multiple channels to communicate with our customers therefore are nothing new to us. However, an intelligent and customer-oriented approach, internally dubbed Multi Channel Plus, represents to us a development we can enlarge and accelerate.
What does Omni or Multi Channel Plus mean to your customers and which challenges does it bring to your business?
D. L.: Also in B2B customers today use virtually all available channels; ranging from classic print catalogues, which still - in contrary to the B2C mail order - occupies an important sales role, to online channels. Increasingly, mobile scenarios are also used in our business model. Here a major challenge is that our mail order customers - again as opposed to B2C - enjoy their own price and discount terms and demand, within all channels, specific room reservations, delivery tracking information, etcetera. To provide information across all these channels at once presents major challenges within our Multi Channel Plus Business.
When did you effectively implement your first big project?
D. L.: The first projects began in the late nineties. However, they were still focused on one channel; leaving room to optimization.
When and why did you decide to create everything new from scratch?
D. L.: The evermore necessary interconnection of channels made it clear that we could no longer continue to further develop on silos and their respective channels, systems and processes. This was the point at which we decided to start all over with a new concept.
Has the technical conception severely changed since then? Or were there only little course corrections which brought about significant impact?
D. L.: The analysis made it readily clear that especially the processes had to be completely rethought and redesigned. So they were not only small course corrections. However in the systems employed, it turned out we had indeed made the right choices in the past. Often they just were not introduced properly in order to also reach their full potential.
Mr. Knütter, what was your motivation to call in external support?
Dirk Knütter: We knew from past experiences that the necessary changes would hardly be brought about with internal impulses and forces alone. We needed external impetus, but also expertise on best practice practices. Thus, it was clear that things would not be capacitive without external support.
Which qualities made you turn to Xtentio as your consultant of choice?
D. K.: We had already been through early discussions with Xtentio in the initial phases of the project, but decided - also out of cost reasons - for the assistance of a single business consultant. After a few months we realized though that such a bandwith of know-how is hardly feasable in any individual. What was missing also was the assertiveness; because very quickly there would be a dependency created by the mandate size, resulting in K+K steering the consultant rather than vice-versa. Thus from the start, on the second attempt we showed up with Xtentio, which convinced us not only with their profound professional expertise but moreover with their absolute neutrality resulting in a freedom of choice as to the use of software and system integrators.
What internal divisions were involved?
D. K.: We have taken up, in the project, the entire information supply chain and modeled the process. Therefore, product management, IT and the entire marketing area were involved, of course across all media and channels.
How many resources have you planned for since Xtentio, Mr. Jurkowski?
Dirk Jurkowski: Xtentio represents a small team in this project; made up of a senior consultant as a responsible project coordinator and two technical project managers, who take up requirements and create concepts with the departments involved. In the implementation phase, tests and inspections are carried out and coordinated. To a project like the one at K+K, together with the service providers and internal employees, more than sixty people are involved. We are currently phasing out, the project being transferred to the line. We support K+K primarily in change management with our most senior consultant.
Mr. Knütter, what were the main pitfalls you had to circumnavigate in implementing this holistic project; where did you have to make essential course corrections?
D. K.: One of the biggest challenges at the beginning was to internalize that this is not just a sophisticated software project, but rather a cross-cutting change process with a high change management component. As a consequence, we have significantly intensified the activities related to the change management; which brought external assistance that helped us both with communication and change measures, but also for example in critical moderations. As regards the technical implementation - as is often the case - the devil was in the detail. Especially in the production of our print advertising, technical limitations have caused for a number of changes to our concepts. For the future I hope for agile methods; first results being built faster to make implementation checks of concepts early, if necessary to discard them.
Mr. Jurkowski, How important is process-based know-how in order to manage such a project successfully?
D. J.: Projects like these are not just realized by merely installing new software and integrating them into existing systems. Especially with K+K it was not foremost a question of introducing new software, but to make existing singular solutions across departments usable and effective. Because this gave rise to great challenges for the organization and its processes. K+K moves in a market where printed catalogues traditionally play a major role and will continue to do so. Parallel to these however, new channels and opportunities to inform clients about products are developing at rapid speed. Without procedural expertise, one cannot change from catalogue pages towards a target group-oriented multichannel commerce B2B. It is equally important to command the old processes and company motives as it is to have the know-how of the new omni-worlds to optimize. Accordingly, introducing these at the end of the line within the organization whilst not losing the employee; that is the real challenge.
What different sorts of technical expertise are there?
D. J.: Our knowledge of various projects in shipping and industry of course helps us cover a wide range of systems. Therefore we are able to advise our customers to the extent that integrator concepts remain also technically feasible. But for a project of such complexity and magnitude, it is hard to bundle all. So it is a clear advantage when one can draw from a broad spectrum of knowledge consulting teams. In addition to the fundamental horizon of experience - leading a major project - the associated change management can be addressed with our specialized consultants; for example, the conversion of the print process with in-depth specialist knowledge. Work of the other teams - both on the client side as well as the integrator and software side - can, by the same methods of all the concepts, be viewed holistically, the interaction then works perfectly.
How much time does the implementation take in total?
D. J.: To define new processes, individual systems and to bring them to the start, was the first part of the project. The significantly longer and more challenging part was the change of the processes. This, of course, without stopping the company working. So it had to function virtually simultaneously. Overall, the project is planned for three years, until all essentials are changed.
What does it mean for a consultancy like yours to scale up resources significantly over such a short term?
D. J.: Because we focus on key features of the technical design, process optimization and project management, integration companies and software houses take up the actual implementation tasks, all clearly structured and planned. An extreme and short-term upscaling to say 15 or more of our staff in a project was not needed. Real challenges arise not from us or the integrators, but usually from the customers. Often the projects for the resources required externally are planned in detail. The staff days required internally often are not, or only partially, determined. Xtentio begins at a very early stage to determine our internal resources and to make them known in the relevant areas. When commissioned externally for over a thousand days, it is highly unlikely less would be required internally. This time-span must cover the customer’s employees in addition to their actual line type. Development is such that the customer will be in the position to realize the project.
What about the acceptance of an external project management with respect to existing service providers who may have before implemented parts themselves?
D. K.: Acceptance came quickly. Professional project management for a project of this magnitude ultimately serves existing service providers just as well. Firstly, all project participants benefit from a transparent planning process which indeed has processed their input. Secondly, experience from similar projects has taught our external project management to identify too ambitious or too cautious planning and reflect on these.
What about the costs, Mr. Lessing? Did you have to revise the budget or was everything implemented in the dimension as you had planned at the beginning?
D. L.: Projects of this size and duration and indeed complexity are initially very hard to estimate and therefore difficult to plan and to budget. Additional taxation may mean revisions. However, the biggest challenge in the project phase was always to solve the internal staff bottlenecks.
The introduction of new technology usually requires a paradigm shift among users. How difficult is it to implement such changes?
D. L.: Very difficult. The change of organization and processes alone already represents an enormous challenge for the staff and the management. Such transformation will only succeed if the change is supported from the top of the management and it also needs to be understood as there are also uncomfortable changes to decide upon and act through.
From your present situation Mr. Knütter, what are, to other companies, the key ‘dos and don’ts’ when venturing out to a comprehensive information supply chain project?
D. K.: The wrong approach would be to understand supply chain projects as merely software or IT. Of course it does not work without these elements, but these are only a part of such a project and probably the easier ones. On the ‘to do list’ according to me is foremost, to have a professional project management, equipped with a strong mandate in the company and to have the required time for resourcing. An external support has proven very positive in this field. Another ‘do’ is to make the new processes transparent and to define and address the changes in an active manner. This can be done in many ways, be it through one-on-one conversations, presentations or ongoing written communication. If the expertise to deal with such changes is not already present in the company, external support eases the process. The vain hope of a too readily adopted ‘already solved’ on issues of high voltage definitely belongs to the ‘do not-list’.
Mr. Lessing, how do you assess future market developments, particularly with regard to changes in customer behavior, new market participants and the ongoing digitization of many sectors of the economy?
D. L.: Customer behavior is constantly changing. New shopping platforms, digital exchange formats; they come, stay and go. The challange to a customer-oriented trading company is to respond flexibly based on a well-functioning technological base. The same applies to whatever changes new market players - as Amazon recently brought about in the US - may introduce. Digitization lowers the entry barriers for companies considerably, but we believe that we are very well situated in our complex assortments as they require a greater need for advice and continue to enjoy strong customer loyalty. For consumables this sure looks different, but I believe that we are now very well positioned to meet these challenges and hence chances may arise from both the market and customer behavioural changes.
Dirk Lessing has been Chairman of the Board with Kaiser+Kraft Europa GmbH since 2012. As CMO he was in charge of marketing, e-commerce and purchasing until the end of 2013. Since 2014 he is also a member of the management board of Takkt AG responsible for K+K Europa GmbH.
Dirk Knütter has been Vice-President at Kaiser+Kraft Europa GmbH since 2008 for e-commerce and since 2014 also for print. Before, he was CEO of tms development GmbH and leading the e-business department at pharmaceutical wholesaler Andreae-Noris
Dirk Jurkowski has been Managing Director of Xtentio GmbH since 2013 and is responsible for the introduction of ISCM for projects with key accounts. Among other things, he has brought along 15 years of experience in project management and consulting from working at e-pro solutions GmbH.
Xtentio GmbH supports companies through its integrated ISCM-analysis and guidance followed up with project management during the configuration of their digital transformation.
KAISER+KRAFT EUROPA GmbH
Picture credits © Frank Teuber/KAISER+KRAFT Europa GmbH; Xtentio GmbH/Herr Mirko Plha