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AVAYA-Tenovis in France

AVAYA-Tenovis in France. Best in France Case Study May 2005 . By group BJ2 : Ms. Jiyoon AN, Mr. Pedro V. ALMEIDA, Mr. Guillaume RAOUX and Mr. Mame D. SY. Constraints in France Adaptation to France Key Constraint Costs Key Benefits of France Essential Advice. What's AVAYA-TENOVIS business

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AVAYA-Tenovis in France

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  1. AVAYA-Tenovis in France Best in France Case Study May 2005 By group BJ2 : Ms. Jiyoon AN, Mr. Pedro V. ALMEIDA, Mr. Guillaume RAOUX and Mr. Mame D. SY

  2. Constraints in France Adaptation to France Key Constraint Costs Key Benefits of France Essential Advice What's AVAYA-TENOVIS business AVAYA-TENOVIS products and clients Why did AVAYA-TENOVIS come to France Do company values fit the French culture? Executive Overview

  3. AVAYA-Tenovis • AVAYA • US Corporation headquartered in New Jersey • Founded in 2000 • TENOVIS • Headquartered in Germany with European operations • TENOVIS settled in France in 1990 • AVAYA-TENOVIS • AVAYA acquired TENOVIS in 2004 • Business • Global Communications Solutions (51% of revenues*) • Development and commercialization of communications products and applications (hardware and software) • Global Services (49% of revenues*) • End-to-end Voice network services : Planning & design, implementation, management and maintenance of networks * 2004 revenues : $4.069 billion

  4. Key figures • World • FY04 revenues of $4.069 billion and profits of $291 million • Global Workforce : 20,000 including 16% in R&D • N°1 worldwide for Telephony over Internet (24% market share) • Europe • Workforce : 5500 • FY03 revenues of $890 million • N°1 in Europe for Contact Center solutions (30% market share) • N°3 in Europe in voice lines shipped* • France • Workforce : 200 including 25% in R&D • N°3 in the French Voice telecoms market • Financial figures : only AVAYA consolidated statements are available * 2004 annual reports quoting Industry Analysts

  5. Company products • TENOVIS historically held production in France • Will stop by end of 2005 and centralized in UK, US and Asia • Lack of flexibility in work legislation, • Higher labor cost • Re-alignment on AVAYA Group production standards and strategy • Service offerings in France : Sales of products, applications and services in : • Internet Telephony • Mobility • Contact Centers

  6. Company's clients • Corporations, GOs, NGOs, • SNCF, AGF, Hospitals, Hotels (Sheraton), … • 200,000 customers in Europe • Clients perception of AVAYA in France • Low awareness in Administrations and NGOs • Good technology • Higher prices than competition • French presence required to address the 3rd market in Europe • Covers France and North Africa • Adjusts commercial methods to cultural specificities • Close proximity to better service the clients and relay clients requirements

  7. Main competitors in France • Traditional telecom manufacturers • Digital and analog Voice Systems • Alcatel, Matra, Siemens, Nortel • Alcatel and Matra : 80% of the market share in France • IP telephony - Cisco, Alcatel, Nortel

  8. Why it came to France • International growth through Acquisition • TENOVIS • Large customer base across Europe (200,000) • Presence in France • Key Presence in France maintained • France is 3rd market in Europe • Cultural differences • 50 people in R&D

  9. Company values • Core Values : Velocity, accountability, customer values, innovation, diversity • Performance-based culture outcomes • Competitive, rewarding, innovative environment on the leading edge • AVAYA to be consistently acknowledged as the best company to work for • Best-in-class people, productivity, processes • Unparalleled values for AVAYA and its stakeholders

  10. Company values • AVAYA faced the French conservatism, opposing • Velocity and customer-oriented driven business • Velocity and innovation • Diversity and global standards • AVAYA-TENOVIS objectives • Create a Franco-American culture • French based commercial and legal methods • AVAYA based corporate human capital practices • Recruitment of international profiles

  11. Constraints in France • Constraints anticipated before coming to France • Labor laws and flexibility : difficulty in the lay-off process • “French market has to be dealt with the French” • No American expatriate in France • Language translation costs : for all documents and products • Constraints discovered • Non dynamic relations between the US HQs and the branch • The majority of the employees do not speak English • High costs of translation and English training • High cost of adjustment to the French fiscal and accounting rules • Lobbying barrier : difficulty for an American company to establish and maintain relationships with GOs

  12. Adaptation to France • AVAYA-TENOVIS Human capital Practices • Recruitment/Selection • Favor international profiles • Prove the additional revenues expected from the recruit • Favor young managers with personality traits that fit with AVAYA Values • Compensation based on Performance • AVAYA principles of compensation and performance appraisal • Bi-annual individual performance appraisal • Compensation curve : • 20% outstanding : salary Increase + Bonus • 70% satisfactory : Salary Increase + NO Bonus • 10% unsatisfactory : No Salary Increase + NO Bonus

  13. Adaptation to France • AVAYA-TENOVIS Human capital Practices • Management Development • On-line Talent Management Tool • Long-term Individual development plan • Bi-annual Leadership performance appraisals • Year-long coaching and feedback • Work organization and Communication Policies : • outsource none core business : industrialized activities, administrative and legal processes • favor direct communication between management and employees • Simplified organization (near flat) • Favor personnel development based on Performance appraisal • Training : English for everyone • Work environment : open-spaces • Few American expatriates

  14. Key Constraint Costs • Competitive costs to coming to France • Low salaries compared to Northern Europe • Communication constraints (language, infrastructure communication costs, etc.) • Integration of French managers into global organisation (does it cost more to use French managers than managers from other cultures) • Uncompetitive costs to coming to France • Social charges • Day-offs • Cost of language translation • Indirect cost due to lack of communication between French Managers and the HQ

  15. Key Benefits of Being in France • Quality of the workforce • Market growth potential • Better capture customer needs

  16. Essential Advice • AVAYA believes that only a “French” company can operate in France • French-oriented customer interfacing • American Management Style

  17. We Thank • Mr. Gilles Paris, • CEO • E-mail: gilles.paris@tenovis.com • Tel: 01.40.94.78.00 • Mr. Olivier COUSTON • Sales Director • E-mail: Olivier.couston@avaya.tenovis.com • Tel: 01.45.15.64.53 • Mr. Renaud MORELET • Finance Director • E-mail: morelet@avaya.com • Tel: 01.40.94.78.00 • Mme Patricia LORREYTE • HR Director • Tel: 01.40.94.78.00

  18. Bibliography • References • Websites • www.avaya.com and www.avaya.fr • Corporate Information, Annual Reports • Document • AVAYA-TENOVIS Performance Management • Appendix : questionnaires

  19. Our Team • From HEC School of Management - Paris MBA Program • Ms. Jiyoon AN • Mr. Pedro V. ALMEIDA • Mr. Guillaume RAOUX • Mr. Mame D. SY

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