Annual Report • Feb 15, 2013
Annual Report
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ANNUAL REPORT
| Solteq and year 2012 in brief | 4 |
|---|---|
| CEO´s review6 | |
| Key figures | 9 |
| Grocery and special retail, HoReCa | 10 |
| Wholesale, Logistics and Services | 14 |
| Service Business and Maintenance Management | 18 |
| Project Services 22 |
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| Continuity Services 26 |
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| Personnel 30 |
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| 30 years with Solteq30 | |
| Look towards the future: Solteq in 2014 | 37 |
| Management 38 |
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| Information for investors 40 |
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Solteq is the leading provider of software services to the wholesale, retail and service sectors in Finland. Solteq's solutions help money and goods move from end to end in the supply chain.
Solteq offers long-term partnership and the widest range of services in the market, from the optimisation of the entire supply chain to the management of consumer customer information. Our technologyindependent solutions help our clients manage their business operations as efficiently and comprehensively as possible.
Solteq was established in 1982. In 2012, the company celebrated its 30th anniversary. The jubilee year was marked with various kinds of events with both clients and partners. Solteq also had the honour or ringing the closing bell at the NASDAQ Stock Exchange in New York. Since 1999, the company's shares have been quoted in NASDAQ OMX Helsinki.
Solteq's goal is to grow in a profitable way and pursue an active dividend distribution policy. Solteq's headquarters are located in Tampere and the other offices in Helsinki and Lahti.
In 2012, Solteq's financial situation improved on the previous year: the turnover was EUR 39 million and profit EUR 2,7 million. The profitability percentage was 7,0%.
On 19 March 2012, Solteq purchased Aldata Solution Finland from Aldata Solution Oy at a purchase price of about EUR 8.3 million. The corporate acquisition strengthened Solteq's position as a service provider for the wholesale, retail and service sectors: the client base expanded, the product offering increased, and the operations expanded to the hotel and catering sector.
Solteq's goal is to be a good employer and a reliable partner which invests in long-term relationships. The merger and new recruitments increased the number of personnel to 270.
Solteq Plc's reported segments are Grocery and Special Retail, HoReCa; Wholesale, Logistics and Services; and Optimisation of Supply and Service Processes.
Solteq's ownership base expanded: The share of Pension Fennia increased to 14.7 percent and the share of Varma Mutual Pension Insurance Company to 4.3 percent.
Solteq's 30th anniversary year was in many ways extremely significant for the clients, the owners, the personnel and the whole company. It showed that we had made strategically right operative and strategic decisions and were going in the right direction. Operatively we should have been better in certain areas, but this leaves us an excellent basis for further development. We will continue the development work in 2013 to reach a phase in which we will be able to take new steps forward.
In the light of pure figures, the 30th financial year of our company was reasonably good, successful in certain areas. In addition to a corporate acquisition, we also grew organically by 8,5 %. We can be satisfied with this development: it shows that we have focused on the right things in the various sectors. The operating profit level that we achieved is in the right direction, and compared with the previous years, the development has been positive. During the past two years, we have made right decisions, and this will create a basis for flexibility in the cost structure. In view of reaching the next percentage units, the improvement of the operating profit will be more challenging than before, but we will continue our efforts.
Since the establishment, going public in 1999 was the most significant step forward and change in Solteq's history – until last year. The purchase of Aldata Solution Finland Oy was the next milestone in the series of significant events in our history. It made
"The purchase made us the only Finnish company that focuses on solutions for the wholesale, retail and service sectors."
us a larger company, but in view of our strategy and our clients, it also made us a special company. The purchase made us the only Finnish company that focuses on solutions for the wholesale, retail and CEO'S REVIEW
service sectors, providing the clients comprehensive solutions that cover the whole supply chain from purchasing to store functions, digital commerce and client relationship analyses. Our service offering makes it possible to have all the services via one partner, Solteq.
As the result of a directed share issue, Solteq's ownership structure also changed in 2012. In terms of continuity, we got excellent new owners: Pension Fennia and Varma Mutual Pension Insurance Company. For us, it is important that leading Finnish pension insurance companies have decided to become part owners in our company.
One of the focuses in 2012 was the improvement of client satisfaction. The client satisfaction survey that we carried out showed overall improvements. Good feedback on successful client projects and enhanced cooperation with the clients encourage us to continue making improvements. I am not quite satisfied with the client satisfaction level yet. In the future, we need to be clearly the most sought after partner in the wholesale, retail and services sectors, an example for the others. In 2013, we will continue towards this goal by taking special measures.
The central pillar of our strategy is ensuring continuity. Ensuring continuity in our clients' operations, in the development of our solutions,
Repe Harmanen, CEO, Solteq Plc
for our personnel, and for other stake holders continues to be a matter of honour for us. Continuity is understood and adopted well in the Solteq community. Everyone at Solteq recognises its importance, and it is great to see that it has turned into concrete activities during the past year. We talk about it, we make it happen and we live it. Continuity is important, we appreciate it and we need it. As last year itself gave us possibilities for new forms of continuity in our operations, I can truly state that last year was the year of continuity for us.
The implementation of the strategy we published at the beginning of 2011 has proceeded well. We have taken the measures we have chosen when the time has been right, and the work continues. Strategic work is never completed – it develops all the time. We took the measures we had decided on more than two years ago and successfully reached intermediate goals. In autumn 2012, we performed an internal audit on the state of the strategy and on necessary readjustments owing to the merger. Minor readjustments were defined for the coming years, but as the merger process with Aldata Solution Finland complied with the strategies of both the companies, no significant changes needed to be implemented.
The integration process of Solteq Plc and Aldata Solution Finland Oy was completed successfully in accordance with the original plan by the end of 2012. The operations and practices were harmonised, and Solteq Retail Oy was merged with Solteq Plc at the end of the year. We reached the objectives set for the integration extremely well.
In addition to client satisfaction, important tasks for us in 2013 will be making the future happen and bringing new solutions to the market. We already started the work in 2012, and I believe that we will proceed well in the first half of the year 2013.
We all know what the economic situation in Finland and Europe is at the moment. The classical problem
beginning of 2011
has proceeded
well."
of forecasting the future is especially difficult right now. I, however, believe that we should not give way to pessimism but act on the basis of the information that is available. Readiness for change and prompt action play the key role. Expecting difficulties without knowing what the difficulties are inevitably leads to stagnancy. On the other hand, closing your eyes to realities is as dangerous.
We will not wallow in negativity but look towards the future with optimistic eyes, full of determination. We will develop the structure of our operations in such a way that we will always have the best possible reaction speed, preparedness and possibilities, and we act accordingly.
As to 2013, our estimate is that Solteq's turnover will be 40-43 million euros and profit 6-9 %.
I would like to thank all our clients, our personnel, and our partners for excellent cooperation during the past year. Our promise for 2013 is that we will be a better partner for all our stakeholders and continue our shared journey with them. Our success depends on our stakeholder groups.
Repe Harmanen CEO
| 2012 | 2011 | |
|---|---|---|
| Software services | 61 | 64 |
| Licenses | 32 | 30 |
| Hardware sales | 7 | 6 |
| EUR million | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|
| Turnover | 8,8 | 10,4 | 8,5 | 11,2 |
| Operating profit | 0,9 | 0,4 | 0,5 | 0,9 |
| Financial period 1.1.-31.12. | 2012 | 2011 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|
| Revenue, MEUR | 39,0 | 27,1 | 27,0 | 28,6 | 30,4 |
| Increase in revenue, % | 43,7 % | 0,5 % | -5,4 % | -6,0 % | 8,8 % |
| Operating profit, MEUR | 2,7 | 1,5 | -4,3 | 1,5 | 1,5 |
| % revenue | 7,0 % | 5,4 % | -16,0 % | 5,1 % | 4,8 % |
| Profit before tax, MEUR | 2,4 | 1,3 | -4,5 | 1,3 | 1,1 |
| % revenue | 6,2 % | 4,7 % | -16,6 % | 4,7 % | 3,7 % |
| Return on equity, % | 21,2 % | 16,0 % | -48,7 % | 9,6 % | 9,0 % |
| Return on investment, % | 20,8 % | 13,1 % | -29,3 % | 9,1 % | 9,0 % |
| Equity ratio, % | 37,2 % | 34,2 % | 30,6 % | 47,2 % | 43,6 % |
| Staff (on average) | 270 | 211 | 233 | 240 | 266 |
Solteq serves it clients throughout the supply chain from logistics to store operations, customer service, point-of sale operations and loyal customer management.
The clients of Solteq's new Business Unit Grocery and Special Retail, HoReCa vary from large retail chains to small independent stores, for instance daily consumer goods chains, speciality goods chains representing several verticals, and a large number of car dealers", says Petri Lindholm, Director of the Grocery and Special Retail, HoReCa Business Unit.
In spring 2012, Solteq purchased Aldata Solutions Finland. The deal significantly strengthened Solteq's profile as a system provider for the wholesale, retail and service sectors.
"Now Solteq's systems cover the whole supply chain and related operations", Lindholm states.
Petri's team of about 100 experts work on store, restaurant, loyal customer, analysis and reporting systems. Some of the systems have been developed by Solteq is able to give retail operators a 360-degree view on the modern, multichannel consumer customer.
Solteq or Aldata, some by Solteq's partners, such as Microsoft.
As to Microsoft solutions, Solteq is the leading provider of the "Microsoft Dynamics AX for Retail" ERP System in Finland. Solteq's offering for the wholesale,
retail and service sectors also includes the Microsoft Dynamics Nav System.
Solteq also provides systems in the form of services, in which case the client pays a monthly fee for the use of the solutions and not for a full delivery project.
"We want to make the acquisition of systems as easy as possible for the clients. By offering systems as services, we are creating a new trend in the industry", Lindholm states.
We know the wholesale, retail and service sectors like our pockets
Solteq has more than twenty years' experience of the wholesale, retail and service sectors, and the company has enhanced its expertise all the time.
"Especially the retail sector is going through major changes in terms of both consumer behaviour and technology. First the online trade revolution and now the development of mobile technology has brought new challenges but also opportunities to retail operators. We know these changes well and are able to support our clients in adopting the changes and utilising them in their business operations",
Lindholm says.
The buying patterns of the consumer customers change with the new possibilities. Consequently, marketing must be more and more personal. Solteq is
Petri Lindholm, Division Director, Solteq Plc
able to give retail operators a 360-degree view on the modern, multichannel consumer customer.
"As we know the sector and the clients, their operational models, and their wishes and expectations, our dialogue with them is on the right level. As the solution provider, we know how to ask the client the right questions and vice versa", Lindholm continues.
In 2012, the turnover of the Grocery and Special Retail, HoReCa Business Unit was about 17 million euros.
"Owing to the general economic situation, the outlook for 2013 is not clear yet, but retail trade operators continue their investments at a fairly brisk pace", Lindholm concludes.
For Suomen Lähikauppa Oy (Finland's Local Store), the Finnish local convenience store operator known for its Siwa and Valintatalo chains, Solteq is the number one system partner.
Lähikauppa, the challenger of the two big daily consumer goods chains in Finland, has made major investments to develop its business operations. The development of the information systems has played an important part in the change process.
"For us, Solteq is the most important IT system provider: it is responsible for several critical systems such as point-of-sale, ERP and order systems", Janne Jakola, CIO of Lähikauppa Oy says.
We also utilise Solteq's solutions for optimising product displays, and one of the latest applications is the gift voucher service, which has been extremely popular among families with children.
Apart from information systems, Solteq also provides support and maintenance services to Lähikauppa. "For us, Solteq is the most important IT system provider."
Two Solteq experts work in Lähikauppa's premises, maintaining the systems and providing user support.
"Having its representative on site seeing how we operate helps the system provider get a better understanding of our business and develop the systems in accordance with our needs", Jakola continues.
"Having its representative on site seeing how we operate helps the system provider get a better understanding of our business and develop the systems in accordance with our needs."
In addition to user support on site, Solteq's Helpdesk helps the store staff during opening hours, whether it is about problems with the point-of-sale system or chip cards. The Helpdesk also helps the Lähikauppa staff in basic IT problems.
Part of Lähikauppa's systems requires renovation. What are the client's expectations towards the IT service provider when renovations are imminent?
"In addition to understanding our business, we expect that the service provider sits at the same table with us right in the planning phase and presents its own ideas concerning future solutions", Jakola concludes.
Janne Jakola, CIO, Suomen Lähikauppa
The corporate acquisition in 2012 made Solteq a full-fledged total solution provider for the wholesale, retail and service sectors. Solteq's solutions can be used to manage the whole supply and service chain.
Solteq's Wholesale Trade Logistics and Services Business Unit provides its clients with ERP and financial management systems, as well as optimisation, integration and reporting solutions that support them.
Solteq's ERP system offering (SAP, Microsoft Dynamics AX and NAV, as well as Solteq Merx) was complemented with Aldata's GOLD Solution. Shelf space and product selection management solutions are examples of the new solutions that the corporate acquisition added to Solteq's solution offering.
"Solteq's systems enhance the efficiency of stores' operations and help them serve their customers in better and more flexible ways than before. With this in mind, we will continue investing in the optimisation of the wholesale, retail and service chains", states Tiina Honkiniemi, Director of the Wholesale Trade, Logistics and Services Business Unit.
Especially in wholesale, retail and industry, we deal with a wide variety of clients every day. Most of our clients are B2B companies. We also have clients from other sectors, such as public administration.
"At Solteq, the clients always come first. We know
their needs and everyday activities, and we know the systems that are available. This helps us provide our clients with solutions that suit them best", Honkiniemi says.
Solteq's solutions help the clients enhance their operations in many ways from purchases and sales to stock management and reporting. The benefits are numerous. The solutions can be used to improve supply security, reduce stock value, increase stock turnover, and improve predictability. The solutions make it easier to manage the flow of goods and ensure that the right goods are in the right place at the right time, packed optimally.
There has been quite a lot of talk of IT solutions being transferred to the cloud, but it seems that this trend will not apply to ERP systems in a large scale yet.
"The first services that are purchased from the cloud are usually email or CRM services. When sufficient experiences of them are accumulated, ERP services will follow. I do not, however, believe in mass transfers of ERP systems, especially in the case of large companies", Honkiniemi says.
Tiina Honkiniemi, Division Director, Solteq Plc
"At Solteq, the clients always come first."
The clients prefer ERP projects in which development proceeds piece by piece in a controlled manner and without risks, and in which the payback period of the investment is as short as possible.
"Quite a few companies have their basic ERP systems in a fairly good order, and at the moment they are investing in the optimisation of operations and supply chains", Honkiniemi continues.
In 2012, Solteq launched several client projects and implemented new solutions.
Engineering company SKS Group launched the deployment of SAP in China, continued it in its other international locations, and now it is Finland's turn. Heinon Tukku, daily consumer goods importer and wholesaler, expanded the use of SAP to its operations in Kuopio and Oulu.
Solteq started an ERP development project based on Microsoft Dynamics AX in cooperation with Solteq's Solax unit.
S & N Osakeyhtiö, an importer and
wholesaler of industrial goods and car accessories, adopted a new version of the Merx ERP system and the eSales online store system. The Solteq Project of the Year 2012 was a project in which the online store system of the hardware store chain Starkki was integrated with Merx.
At Alko, the government-owned company licensed to sell alcoholic drinks, we have a project to transfer the company's logistics management to the GOLD System. At the same time, new tools will be adopted for sales forecasting and for space and selection management. The new features will be deployed phase by phase during 2013.
For the Wholesale Trade, Logistics and Services Business Unit, the year 2012 was profitable. The turnover was over 16,9 million euros.
"The outlook for 2013 is fairly good in spite of the volatile global economies. The number of personnel will probably grow. We are on the lookout for especially Microsoft and SAP experts", Honkiniemi concludes.
According to Kari Blomberg, Managing Director of the SKS Group, the acquisition of the SAP Information System is the most significant information system project of all times for the Group.
The SKS Group, Solteq's partner since 1995, decided to replace its information systems with a single system that would also suit its international operations. Apart from Finland, the Group is present in Sweden, Russia, Estonia, Poland and China.
SKS's choice was SAP.
"We used several information systems, small and big, and not all of them suited the enterprise resource planning systems of our international units", Blomberg says.
This time, the information system renewal did not start in Finland, even if we are talking about a Finnish family enterprise. The growth-oriented multi-competent machine building company started "Sapping", as Blomberg calls the project, in China in 2010.
"Our CFO in China had previous knowledge of the SAP software".
According to Blomberg, starting the project in China was a sensible move, and the experiences of SAP have been extremely positive there.
All the SKS Group companies should be in the SAP environment by the end of 2014.
SKS chose Solteq as its SAP provider because Solteq had also supplied its previous information systems.
"Apart from Solteq's SAP references, an important factor was that we had had cooperation with Solteq ourselves. Solteq knows us well, and we have been able to have a say even in the selection of the project staff".
"Solteq's size is right for us: we are a significant client for them and they are a significant partner for us", states the Managing Director of a company that has 650 employees and net sales of 120 million euros.
What are SKS's expectations concerning SAP?
"A centralized information system that covers the whole Group brings all the information to one place, which means the information is easier to manage. We have 180 000 product items, of which about 23 000 are in stock all the time".
"We will be able to focus our IT resources better as there is only one system to manage, and the system will bring transparency to reporting and to the current situation of the Company. Of course, we also expect cost savings", Blomberg concludes.
As the world becomes increasingly networked, supply and services management solutions gain more and more importance. Mobile work is also "the new normal", which means that resources need to be optimised.
Solteq is the leading provider of software services for the wholesale, retail and service sectors. In the area of supply and services management, Solteq has a strong foothold. In the 1980, Solteq started with enterprise asset management software, which is still an essential part of the Optimisation of Supply and Service Processes Business Unit. As automation has increased and the client-provider model has gained popularity, our client base has expanded.
"Our solutions (Solax, Arttu, Artturi and its new version Neo, PowerMaint) are used by a large number of clients in industrial and energy production services, enterprise asset management, life cycle services, etc. We also provide services to the technical departments of cities and municipalities, to real estate service providers, and to an increasing number of home and care service providers", states Matti Saastamoinen, Director of the Service Business and Maintenance Management Unit.
The enterprise resource planning solutions that Solteq has developed for the optimisation of supply and service processes help the clients manage their operations in many ways, for instance enhance production plant reliability, task and resources management, field work, sales and customer service, partner network management and materials management.
The Optimisation of Supply and Service Processes Business Unit is also responsible for the services and products related to business critical data, i.e. master data. Solteq offers its clients projects to improve the quality of their master data, maintenance services for the master data outsourced to an external master data service centre, software technologies utilised in master data management, and consultation services.
"The aim of these services is to ensure that the data in the systems that support the clients' enterprise resource planning and decision making processes are of high quality, inter-compatible and up-to-date", Saastamoinen says.
Solteq's master data management solutions are used by clients across industries and sectors. Thanks to the acquisition of Aldata Solution Finland, demand for Solteq's master data services is also increasing in the wholesale, retail and service sectors.
Home and care service providers are a new client group that can use Solteq solutions to develop their operations. In 2012, Solteq started an ERP development project based on MS Dynamics AX and Solax products with Validia, sheltered housing services provider of the Finnish Association of People with Physical Disabilities. The project is carried out in cooperation with the Wholesale, Logistics and Services Business
Unit.
Solteq's long-term enterprise asset management client Gasum also provides services to consumers in the form of gas appliances and their maintenance. As part of Gasum's ERP System renewal, the Solteq Solax System will play a key role in Gasum's customer services and in the enhancement of its work and resource management.
In addition, several new Solax deliveries are being implemented.
Solteq continuously develops its expertise and offering related to supply and services management. One example of this is that Solteq's Solax Solution was awarded Microsoft's highest-level international certification (Certified for Microsoft Dynamics AX). Solax is based on the "Microsoft Dynamics AX" ERP system. This is a historic moment for the Finnish software industry and for Solteq. The certificate differentiates the applications that have gone through this extremely tight quality screening from the thousands of other applications available globally.
Solteq has also started a strategic partnership with M-Files, an EMC system provider in Tampere. Solteq integrates the technology platform of the awarded M-Files document and information management system in Solteq's own supply and services management products.
"Now the information that systems could not access before, for instance information in pictures, will become an integral part of e.g. enterprise asset management", Saastamoinen says.
In the review period, the turnover of the Optimisation of Supply and Service Processes Business Unit was 5,1 million euros.
"The outlook is good. The order base is strong, and significant growth is expected for e.g. Solax. Finnish companies clearly want to develop service business, and this means demand for supply and services management solutions", Saastamoinen concludes.
Solteq Solax is an ERP system designed for enterprise asset and mobile work management. Solax was the first system in Finland to be awarded the Certified for Microsoft Dynamics®
AX2012 Certificate (CfMD), the highest level Microsoft Certificate. The highly esteemed certification has enabled Solax to be included in Microsoft's global product offering.
Solteq and Microsoft are long-time partners. In 2008, Solteq started to develop new software for the Dynamics AX Platform. The result of the cooperation, Microsoft's highest-level CfMD certification awarded to Solax, tells our clients and retail partners globally that both the technical and functional features of the software are top class and that the current users recommend it.
"Solteq's industry expertise has been successfully taken onto an international technology platform. This opens up excellent success possibilities to us in the future", says Matti Saastamoinen, Director of the Optimisation of Supply and Service Processes Business Unit.
Thanks to the Microsoft certification, the clients can be sure that Solax is technically fully compatible with the "Microsoft Dynamics AX" ERP system.
"In addition to our clients, the certification also brings benefits to our partners that sell the Solax software, and to our own development organisation. Participation in the certification process has sharpened our own operations and documentation", says
Jouko Kiiveri, Director responsible for the sales and the partner channel of the Optimisation of Supply and Service Processes Business Unit.
"We are now able to verify the technical integrity of our software to our partners by means of documentation provided by an external actor. In this way, the persons who are responsible for the data management of our clients can be quickly assured of the functionality of our solutions."
The certification also gives Solteq access to Microsoft's international marketplaces where clients and retailers can look for the solutions they need.
"A client in Australia that is looking for a suitable EAM solution can get acquainted with Solax in our marketplace and contact a suitable retailer. The certified solution is guaranteed to work with Dynamics AX", states Jaakko Karhumaa, Director of Business Solutions at Microsoft Finland.
When the question of estate asset management comes up, the situation is often that the client has already chosen the Dynamics AX Platform.
"The client's decision to start using the "Dynamics AX" ERP Software significantly facilitates our sales work as well. The purchase of the best industry vertical solutions is a natural continuation when the functionality of Dynamics AX is being extended", Kiiveri says.
The choice of a certified application is sensible because its compatibility is guaranteed. An important factor in making decisions on data systems is also the increasing need to build comprehensive systems that are easy to manage in the long term. Solteq brings its 30-year experience in enterprise asset management applications to this equation.
"The clients want to get rid of "patchwork" solutions which often mean high maintenance and running costs. Companies also want to reduce their development investments", emphasises Anthony Gyursanszky, Director of Marketing & Operations at Microsoft Finland.
Microsoft's Dynamics business is on a steady growth path. The Solax story reflects Microsoft's operating model: local partners build applications, and after certification they are available throughout the world.
"For us, it is important to promote Finnish innovations and take success stories to global markets. In the Dynamics AX environment, Solteq is an excellent example of this model", Gyursanszky concludes.
The systematic and standardised forecasting and monitoring of projects started in 2011 have brought coherence to the project activities. A successful project is a joy for both Solteq and the client.
In 2012, Solteq carried out several large projects in which the client's new system was either commissioned or near commissioning. The number of projects to be monitored by the Management Team increased by ten to about forty, when Solteq purchased Aldata Solution Finland. At the same time, Solteq got clients from new industries.
"We did not have much time to integrate the ERP systems and project monitoring, but we managed to do it by the end of the spring", Riina Tervaoja, Director of Project Services says.
In the beginning, it was important to transfer the projects to Solteq's and Aldata's shared systems and train new people to use them to enter working hours, establish new projects, etc.
The merger has also succeeded well on the personnel level.
"People have mixed well, and they have turned to their new colleagues
Riina Tervaoja, Director, Solteq Plc
"When we know our clients well, we are able to suggest solutions that meet their needs and serve their particular business operations."
for advice and help if necessary", Tervaoja says.
Solteq's new project business model has brought coherence to project management and made possible risks visible faster.
"In our largest projects, I am a kind of outside observer and help the project team in the management of the project. I make sure that the meetings are prepared well and the discussions and decisions are documented properly", Tervaoja says.
The Project Managers have an informal "Prop" Team, in which they share experiences and meet colleagues from the other units.
Apart from forecasting and close monitoring, we have also started performing systematic post-mortem analyses of the projects. In the long run, the quality assessments of the projects will give us information that we can use to develop our project expertise. In this way, also the project indicators will be comparable regardless of the business area or unit.
"We also carry out yearly client satisfaction surveys and they contain a project section, but not all our clients have projects going on every year. We want to have more detailed feedback on the projects in future", Tervaoja states.
The post-mortem analysis includes such matters as the evaluation of the quality in the delivery phase, documentation, forecasting, number of control points in the various phases, selection of the methods and evaluation of the amount of work.
"We intend to apply this operating model to smaller projects, as well. In this way, everyone will be able to benefit from it", Tervaoja states.
To facilitate the clients' transfer to new systems, Solteq offers Bridge solutions. Crossing the Bridge with Solteq is always a significant change process for the client.
"When we know our clients well, we are able to suggest solutions that meet their needs and serve their particular business operations", Tervaoja states.
As to new clients, we have to win their confidence right from the beginning.
"It may be the first time in 15 years for the client to be buying a new system. A method that we have found good is to start shared project activity with the client by defining the goals and objectives of the project before committing to the implementation of the actual project. In this way, we are able to use our decades of experience to establish the needs of even an inexperienced client", Tervaoja continues.
Tervaoja emphasises the importance of taking ownership of one's own work on all levels of the organisation. When you are able to step into the clients' shoes or into the shoes of their customers, the results and significance of your own work for the clients become more perceptible to you.
"Our systems have an impact on whether a day care centre receives milk or an ill senior citizen food, just to give you two examples. How well we succeed in our projects gets completely new dimensions, if we see our work from this perspective", Tervaoja concludes.
Tiina Vuoniemi's career at Solteq could not have had a better start. Just one year after Tiina joined the company, the project she led was elected the Solteq Project of the Year 2012.
The victorious project was one in which Solteq's ERP system was integrated with the online store system of the hardware store chain Starkki. For the client, opening an online store to serve consumers was a critically important project.
"Despite the tight schedule, Starkki's online store was opened in time for the season, the costs were kept in control, and the client's wishes and expectations were met well", Tiina Vuoniemi, says.
Even if Tiina is a new face at Solteq, she is no rookie as a project manager. She has led projects for the past 12 years and worked for companies like Nokia.
Vuoniemi has great respect for the competencies of the victorious project team.
"The successful end result was due to the expertise of the project team, which had known the client for a long time."
"Despite the tight schedule, Starkki's online store was opened in time for the season, the costs were kept in control, and the client's wishes and expectations were met well."
"The successful end result was due to the expertise of the project team, which had known the client for a long time. If the schedule is as tight as in this case, it is essential that the project team knows the client's business and its processes."
"As the actual online store was implemented by another provider, communications also played a key role in this multi-provider project", Vuoniemi concludes.
Tiina Vuoniemi, Project Manager Solteq Plc
For about a year, Solteq has had a new unit, Continuity Services, which specialises in the development of client relationships.
Our client value proposition is: "We guarantee continuity and make the future happen."
Solteq wants to ensure the continuity of its clients' operations as the users of Solteq solutions and provide them with the advantages offered by technological development.
"One way to deliver on our promises was the establishment of Continuity Services towards the end of 2011. Continuity Services have been part of our official organisation since the beginning of 2012", Kai Hinno, Director of Continuity Services, states.
During the past year, the Continuity Services have collected and documented the best client relationship practices. As the processes are documented carefully in a certain format, it is easier to apply them to new client relationships.
To ensure continuity, each strategic client has an appointed Client Liaison whose responsibility is to take care of the client relationship concerned. The Service Managers continue to be responsible for client relations on the tactical and operative levels.
The Client Liaisons have a good overall picture of
Solteq wants to ensure the continuity of its clients' operations as the users of Solteq solutions and provide them with the advantages offered by technological development.
the Solteq solutions that their clients use. They also look for innovative ideas for the development of the systems and ensure that their clients' business operations run without disturbances.
"The Client Liaison and the client prepare a fewyear plan on the future development of the client's system architecture and on measures that Solteq can take to help the client reach its goals", Hinno states.
In addition to the Client Liaison, the client also has a named client team which helps in practical matters.
Continuity is also ensured by means of quarterly reviews of the service plans. In the reviews, Solteq's CEO and the Director of Continuity Services go through the plans with the clients and check if the direction is right or if corrective measures are needed.
The clients have welcomed the Client Liaisons with open arms.
"The feedback has been excellent and encourages us to continue on this road", Hinno says.
"Our investments in the development of Continuity Services have also been noted by our clients. One example of this is that more and more of our clients have indicated that we are a strategic partner for them as well", Hinno continues.
In spring 2012, Solteq purchased Aldata Solution Finland. In a corporate acquisition, the continuity of services is of special importance to the clients: the clients want the transfer to the new company to take place as fluently as possible and the services to continue without interruptions.
"As Aldata's service model had been based on the ITIL model, the best practices that we had collected also suited these clients", Hinno says.
"We do not require the clients to adopt this ope-
Kai Hinno, Director, Solteq Plc
rational model or contract structure; continuity also means that the existing contract is continued if the client so wishes. In due time, we agree with the client on how to develop cooperation", Hinno continues.
Solteq is able to offer the clients transferred from Aldata more systematic services than before. On the other hand, Aldata's contribution is a Helpdesk service that is renowned for its efficiency. Solteq used to offer client support from 8 to 16 on weekdays. Now support is available from 7 to 22 and even over the weekend.
"As shops' opening hours are longer now, the longer client support hours are useful especially in retail trade", Hinno states.
Solteq itself is a good example of continuity. The company has celebrated its 30th Anniversary in 2012, and the successful Jubilee Year is a good basis for the future. Solteq wants to continue being the leading Finnish retail and service industry software service provider.
"It's all about the client. We want to provide our clients with just what they need. This means that we will support the solutions that our clients use as long as they need support. Besides, we are the best expert in the industry to find out in what direction the systems should be developed", Hinno concludes.
Daily consumer goods importer and wholesaler Heinon Tukku has entered the SAP world.
"We transferred from a fairly simple system direct to SAP and skipped a few development phases that we might normally have gone through. We did not just jump over little brooks and rivers but took a giant leap across an ocean", the Managing Director of Heinon Tukku Marja Hämäläinen states.
Even if there was no change resistance, getting used
to the new system has taken a lot of effort from the personnel. However, the benefits of the new system are clear.
"Financial management is so much easier when you have reliable information on the operations readily at hand. Before, I often had to wait for a scanned calculation on a piece of paper or for an Excel sheet. Now all the data is available immediately", Hämäläinen says.
As Heinon Tukku, which supplies food stuffs to hotels, restaurants, schools and institutional kitchens, has more than 30 000 product titles, master
"Without SAP, the scale of our operations would not be as wide as it is today", Hämäläinen continues.
Instead of manually produced documents, the customers of Heinon Tukku now receive automatically timed reports.
Heinon Tukku has been Solteq's client since 2004. The company's data system has been implemented gradually, integrating voice directed order picking, point-of-sale and reporting functions to it. SAP covers bulk orders, stock and material management, financial management and online store functions, as well as customer and supplier register.
"Solteq is our biggest IT partner. We have an open and honest relationship, and our wishes are listened to".
Delivery reliability is of great importance in Heinon Tukku's field of business and therefore a common goal for both Heinon Tukku and Solteq.
"We promise to deliver the orders to our customers within 24 hours. The system has to work without faults to ensure that the day care centres get their milk and restaurants their daily raw materials".
The customer value proposition of 24-hour delivery means that the evenings and early hours of the day are the busiest times at Heinon Tukku.
"In the Capital Region alone, more than 100 delivery vehicles leave our warehouses every day", Hämäläinen concludes.
Marja Hämäläinen, CEO, Heinon Tukku
SOLTEQ PLC
In 2012, Solteq celebrated its 30th anniversary, and in the spring of the jubilee year, Solteq purchased Aldata Solutions Finland. The year of celebration also included a lot of integration work, which was rewarded by a gala towards the end of the year.
Solteq's jubilee year was crowned by a staff gala. The gala programme included a review of Solteq's history going back to 1982, when the company was established in Tampere. It was also an occasion for Solteq to reward the staff members who had worked for the Company for 30 years.
The year before the celebration was, however, full of hard work to ensure that the biggest corporate acquisition in the Company's history would work out perfectly.
"The new phase as a larger than before Solteq has started very well. I had a feeling from the very beginning that these people would make a good work community", Solteq's HR Director Mari Kuha says.
Mari Kuha, HR Director, Solteq Plc
"I had a feeling from the very beginning that these people would make a good work community."
"As soon as the deal was completed, we prepared a hundred-day integration plan. We also wanted to implement the integration process through open dialogue from the very beginning, and therefore we focused our efforts on the best possible communications ", Kuha continues.
Solteq's HR was strengthened by hiring an HR expert for the Tampere headquarters, which meant that there was an HR expert running operations and implementing the integration both in Helsinki and in Tampere. At the Tampere office, Milla Turunen had a good start and quickly got the hang of the integration process.
"The plan made in spring 2012 proved so good that it could be carried out as such".
The first task of HR was to unify the personnel policy, i.e. employee benefits as well as HR guidelines and rules. The integration of the payroll systems and the creation of shared occupational health care services were also at the top of the to-do list.
"We decided to buy the occupational health care services from a service provider which would be able to provide the same services both in Tampere and in Helsinki. In this case, the integration process was well-timed: our health care services had been in need of reorganisation for quite a long time".
The recreational activities supported by Aldata could continue as such after the employees transferred to Solteq.
"In the future, Solteq's staff club will be developed further, and efforts will be made to attract more participants in the activities", Kuha plans.
An essential prerequisite for successful integration is active and open communication. The personnel have expressed thanks for being informed of the progress of the merger and of any open and unfinished matters regularly.
"We issued an integration bulletin every Friday, telling the personnel what was happening in the various aspects of the integration, and we organised info sessions at all Solteq's offices, focusing on matters that interested the employees of the office concerned".
The meetings of the managerial level staff discussed matters that needed special attention, and especially how to communicate information in as clear terms as possible.
Owing partly to the need for integration, HR compiled a Manager's Manual. All the essential information needed in managerial work was put in the Manual: Solteq's operational methods and processes, instructions, and advice for various situations such as inducting new employees.
Apart from implementing the integration, HR also developed personnel communications by launching "Solteq Spirit" in-house magazine.
The magazine is made by using Loyalty Software, which was part of the Aldata deal. It is also used by several Solteq's clients in their loyal customer communications.
"We did not want to make the magazine a mere newsletter but an informal, team spirit raising publication. There are formal articles in it, but you can also find recipes, stories about the staff members' hobbies, and the "Solteq Looks" Column featuring Solteqian styles ", Kuha describes.
Like always in mergers, people were worried about possible redundancies at first. However, it soon became clear that these worries were unnecessary. The two companies had very few overlapping activities.
"In fact, Solteq hired about 20 new people during the year of the merger. The outlook is good for the personnel as well", Kuha concludes.
Solteq has launched a Master-Apprentice Programme in which old hands and novices share and exchange information and expertise.
The new way of sharing expertise was tested by four master-apprentice pairs. One of the pairs was Kirsti Siltala and Karmila Laine.
Siltala and Laine had a slightly different aim compared with the other three pairs. Kirsti was retiring in autumn 2012 and Karmila was going to take over Kirsti's work including the "Solteq Finance" Financial Management System used in e.g. vehicle and wholesale trade.
"We already started in 2008, but I was away on parental leave for some time. Our cooperation was the most intensive in the months just before Kirsti's retirement", Laine states.
"Karmila has naturally been able to call me even after I retired. Warranty still valid", Siltala, whose career with Solteq had lasted for almost 27 years, comments smiling.
According to Kirsti and Karmila, sharing knowledge was easiest in a real situation.
"Practice is the best teacher. There were times when both of us were busy and the Master-Apprentice Project was given less time. As Karmila already had basic competence in financial management, we did not have to start from the beginning", Siltala states.
PERSONNEL
"I wanted to leave my clients in good hands. Fortunately this wish also came true."
"It was rewarding for me to see how Kirsti worked. She documented everything and performed preparatory work extremely carefully. Everyone could learn a lot from her practices", Laine says.
"I decided to participate in the project partly for selfish reasons: I wanted to leave my clients in good hands. Fortunately this wish also came true", Siltala states.
Both Kirsti and Karmila felt that the Master-Apprentice Programme was a good system, worth continuing and developing.
"It would be great if all newcomers or staff members who transfer to a new job had a mentor who they could turn to with any questions. It is great to have a Master at hand helping you to learn new things", Laine concludes.
Timo Viitanen and half a dozen other employees have worked for Solteq from the very beginning until today.
Ali U. Saadethin, Seppo Aalto and Erkki Knuuttila established a company called Tampereen Tiedonhallinta Oy thirty years ago in 1982. When the company went public in 1999, the name changed to Solteq Plc.
"In the beginning, it was a group of people who knew each other from previous workplaces. Everyone did everything in a startup spirit. At that time, the term "startup" had not been coined yet, though", says Timo Viitanen, who has worked for the company since 1982.
During his 30-year career at Solteq, Timo Viitanen has held many responsibilities. He headed several different units for more than 20 years, he was a member in the Management Team for many years, and he was also responsible for the HR matters in addition to his own duties.
"In the first few years, we had really good contacts with educational institutions. Teachers used to call us and recommend students who would suit us", Viitanen reminisces.
At the moment, Viitanen develops processes and prepares process descriptions as Quality Manager in the Continuity Service Unit. As a Solteq veteran, he certainly knows the company's processes like his own pockets.
Viitanen sees two special reasons for his 30-year commitment to Solteq.
"The first reason is Ali's supportive and encouraging management style. He has always shared responsibility, which has made work meaningful", Viitanen says.
"The other is the variety of my work: in the course of years, I have had an opportunity to perform many different kinds of tasks, involve in a large variety of projects and also deal with different kinds of clients."
According to Viitanen, it is time to change the job when it is no fun to go to work any longer. At Solteq, it has always been fun.
Viitanen has two clients who have shared his journey with Solteq from the very beginning. Onninen Oy and Tuko Logistics Oy.
"I have worked with many different clients during my years with Solteq, but it has been especially rewarding to work with the same clients for decades. You learn to know each other thoroughly, and the result is fruitful cooperation", Viitanen continues.
When Timo Viitanen has been asked what Solteq actually does, his answer has come "off the shelf".
"Solteq provides and implements software for wholesale, retail and services".
In the first few years, Solteq focused on the provision of its own IBM-based software. Later on, SAPand Microsoft- based technologies were added to the offering.
"It has been interesting to have a grandstand view of the technological development in the industry. There was a time when we sent software upgrades to our clients by snail mail or went to their offices to install the software off a diskette. Now all this can be done from our office or from home. Everything is on
the Internet now."
For Viitanen, the most memorable moment was when Solteq went public.
The latest corporate purchase and the merger of Aldata into Solteq have also been moments to remember.
"During the course of years, we have had both successful and less successful corporate acqui sitions. We have always acquired new expertise, but Aldata's integration was managed in an excellent way. Through the a c q u i s i t i o n , Solteq increased its expertise in the wholesale, retail and service sectors signifi cantly.
Viitanen will go on partial retirement in autumn 2013. He plans to spend the increased free time on his favourite hobby of hunting and also to continue his activities in parish work.
"I will definitely also spend more time with my grandchildren", Viitanen concludes.
Timo Viitanen, Senior Advisor, Solteq Plc
Solteq guarantees continuity and makes the future happen
The world changes and the needs of the consumers change. This has a significant impact on the needs of those of our clients which operate in the wholesale and retail trade. In accordance with our customer value proposition, we continuously develop new and modern solutions which ensure the continuity and development of our clients' operations.
Solteq has a mission. We want to be the leading partner for the wholesale, retail and service sectors in Finland. We will proceed towards this goal step by step on the road we chose at the beginning of 2011. We proceed steadily without rush: as a reliable family business, we keep our vision clear in our mind and keep our promises without fail. As to internationalisation, we remember that Rome was not built in a day: we open doors to international markets gradually when the time is right for us, our clients and our partners.
We want to invest in the work satisfaction and wellbeing of our personnel: happy staff makes happy clients. We will work hard to reach the goal that we have set for ourselves for 2014: simply the best and the most reliable partner for the wholesale, retail and service companies, with the highest possible client satisfaction rate. We are all prepared to work for this goal every day, knowing that a successful and happy client is also a guarantee of our success.
CEO
KAI HINNO Director, Continuity Services
TIINA HONKINIEMI Director, Wholesale, logistics and services
MARI KUHA HR Director
ANTTI KÄRKKÄINEN CFO
PETRI LINDHOLM Director, Grocery and special retail, HoReCa
MATTI SAASTAMOINEN Director, Service Business and Maintenance Management
MIKA SIPILÄ Director, Sales
RIINA TERVAOJA Director, Project Services
Solteq Plc's Annual General Meeting will be held on the company's premises at Eteläpuisto 2 C, Tampere, on Friday 15 March 2013 at 12 p.m. Shareholders who no later than on 1 March 2013 have been registered in the company's register of shares maintained by Euroclear Finland Ltd are entitled to attend the General Meeting.
Shareholders wishing to attend the meeting shall notify the company's headquarters on Friday 8 March 2013 at 4 p.m. at the latest.
• 23.3.2012 Solteq Plc: release on change in ownership shares in accordance with chapter 2 section 10 of the securities markets act
• 23.3.2012 Solteq Plc: release on change in ownership shares in accordance with chapter 2 section 10 of the securities markets act
SOLTEQ PLC
Eteläpuisto 2 C 33200 Tampere
Atomitie 2b 00370 Helsinki
Aleksanterinkatu 10 15110 Lahti
Switchboard +358 20 14444 www.solteq.com
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