CELONIS
University of Alberta Consulting Team and Celonis Executive Management Team present an opportunity analysis, alternatives, recommendations, implementation details, and conclusions with a focus on explosive growth, unlocking trapped value, and venturing into uncharted territory for Celonis. Explore the company pillars of agility, innovation, and lean principles to unlock customer value while navigating through challenges and seizing growth opportunities
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Presentation Transcript
CELONIS Project Revolution
INTRODUCTIONS We are: You are: University of Alberta Consulting Team Celonis Executive Management Team
AGENDA OPPORTUNITY ANALYSIS ALTERNATIVES RECOMMENDATION IMPLEMENTATION CONCLUSION
"UNLOCKING TRAPPED VALUE"
"UNCHARTED TERRITORY"
"EVOLUTION IS HERE TO STAY"
COMPANY PILLARS AGILE INNOVATIVE LEAN UNLOCKING TRAPPED VALUE FOR CUSTOMERS
THE SITUATION Celonis: founded in Munich (Germany) by Martin Klenk, Bastian Nominacher, and Alex Rinke (2011) Explosive growth International expansion SAP partnership Valuation: $1B (2018) to $2.5B (2019) Demand for industry-specific software Benefits of remaining industry-agnostic (80% used features for orders and accounts payable) Large clients pushing for more industry-tailored service Execution Management System A response to consumer demand Platform can accommodate many new data sources; external software providers can leverage. Third-party developers relieved pressure on Celonis.
KEY ISSUES General vs. industry-specific focus Organizational structure "Uncharted territory awaits"
THE OPPORTUNITY To develop the internal structure that best allows Celonis to take advantage of growth opportunities while maintaining excellent service to existing customers.
SWOT Understanding internal and external factors affecting Celonis' operation STRENGTHS WEAKNESSES Low awareness of newly created products Not organized to manage explosive growth INTERNAL Rapid growth in recent years, Unicorn status within 10 yrs Strong support from Celonis advocates (Dell, BMW) Diverse client base OPPORTUNITIES Diversified client base provides security Ecosystem of partners THREATS EXTERNAL Potential failure to capitalize on new industries Exposure to clients' supply chain disruptions
VRIO Understanding Celonis' sources of competitive advantage Valuable? Rare? Inimitable? Organized? Agility Lean philosophy model, fast reacting Innovation First to market advantage Positive user experiences Industry advocates, unlocked trapped value Technology Simple to integrate, diverse uses Key take away: Innovation and trade secrets have created competitive advantage for Celonis
VRIO Understanding Celonis' sources of competitive advantage Valuable? Rare? Inimitable? Organized? Agility Lean philosophy model, fast reacting Innovation First to market advantage Positive user experiences Industry advocates, unlocked trapped value Technology Simple to integrate, diverse uses Key take away: Opportunity to better organize the firm to generate sustainable competitive advantage
ORGANIZATIONAL STRUCTURE Understanding Celonis' current organizational structure CEO Existing Technology Office Operations Key take away: Centralized structure has been successful to date, however, not well organized to handle explosive growth or growth in multiple industries
ALTERNATIVES Decision Criteria Agile and Reactive to Customer Needs Simple to Integrate and Use Regular Unlock Trapped Value for Customers Assessment and Product Refinement
ALTERNATIVES Agile and Reactive to Customer Needs Regular Assessment and Product Refinement Unlock Trapped Value for Customers Increase Simplicity to Integrate and Use 1 Maintain current company structure Focus on generic software 2 3 Focus on industry specific software Rely on external consultants for insights Reorganization - Develop internal experience and innovation teams 4 5
ALTERNATIVES Agile and Reactive to Customer Needs Regular Assessment and Product Refinement Unlock Trapped Value for Customers Increase Simplicity to Integrate and Use 1 Maintain current company structure Focus on generic software 2 3 Focus on industry specific software Rely on external consultants for insights Reorganization - Develop internal experience and innovation teams 4 5
A COMPANY REORGANIZATION STRATEGY WITH THE VISION OF: Revolutionizing the customer experience in key industries Sparking internal innovation, tech and design thinking
THE REVOLUTION IS UNDERWAY
IMPLEMENTATION PROJECT REVOLUTION Financial analysis CEO (Rinke) (NEW) Operations and Customer Experience (Nominacher) (NEW) Innovation and Design Thinking Existing Technology Office (Klenk) PHASES OF CHANGE MANAGEMENT Form Strategic Vision Enlist Volunteer Army Generate Short Term Win Create Urgency Build Guiding Coalition Enable Action Sustain Acceleration Institute Change
OPERATIONS AND CUSTOMER EXPERIENCE Financial analysis CEO (NEW) Operations and Customer Experience (NEW) Innovation and Design Thinking Existing Technology Office
OPERATIONS AND CUSTOMER EXPERIENCE Financial analysis Objectives Direct Customer experience and journey mapping Create industry specific improvements communication and problem solving with key industries PHASES OF CHANGE MANAGEMENT Form Strategic Vision Enlist Volunteer Army Generate Short Term Win Create Urgency Build Guiding Coalition Enable Action Sustain Acceleration Institute Change
OPERATIONS AND CUSTOMER EXPERIENCE Financial analysis Team Structure COO VP Experience ( Indutry 1) VP Experience (Industry 2) VP Experience (Industry 3) VP Experience (Industry 4) VP Experience (Industry 5) VP Marketing/Sales PHASES OF CHANGE MANAGEMENT Form Strategic Vision Enlist Volunteer Army Generate Short Term Win Create Urgency Build Guiding Coalition Enable Action Sustain Acceleration Institute Change
OPERATIONS AND CUSTOMER EXPERIENCE Financial analysis Performance Metrics 5 year timeline Key Industry Generates $10 Million in Revenue per Year Key Industries Increase from 5 to 20 Maintain High Net Promoter Score PHASES OF CHANGE MANAGEMENT Form Strategic Vision Enlist Volunteer Army Generate Short Term Win Create Urgency Build Guiding Coalition Enable Action Sustain Acceleration Institute Change
INNOVATION AND DESIGN THINKING Financial analysis CEO (NEW) Operations and Customer Experience (NEW) Innovation and Design Thinking Existing Technology Office
INNOVATION AND DESIGN THINKING Financial analysis OBJECTIVES Promote design thinking throughout organization Create Utilize AI and RPA to solve longtail problems partnerships and relationships with non-key industries PHASES OF CHANGE MANAGEMENT Form Strategic Vision Enlist Volunteer Army Generate Short Term Win Create Urgency Build Guiding Coalition Enable Action Sustain Acceleration Institute Change
INNOVATION AND DESIGN THINKING Financial analysis Team Structure Chief Innovation Officer (CIO) VP VP Design Thinking VP Cloud Solutions VP Software Innovation VP Analytics and Insights VP AI VP RPA Partnerships PHASES OF CHANGE MANAGEMENT Form Strategic Vision Enlist Volunteer Army Generate Short Term Win Create Urgency Build Guiding Coalition Enable Action Sustain Acceleration Institute Change
INNOVATION AND DESIGN THINKING Financial analysis Performance Metrics 5 years New data program compatibility (ex: emails & documents) Integrate automated "long tail" solution identification AI & RPA successfully integrated PHASES OF CHANGE MANAGEMENT Form Strategic Vision Enlist Volunteer Army Generate Short Term Win Create Urgency Build Guiding Coalition Enable Action Sustain Acceleration Institute Change
IMPLEMENTATION Financial analysis Financial Analysis 2021 Q3 2023 Q2 Q4 Q1 Q2 Q3 Q4 Promote Co-CEOs Identify and Hire CIO Analyze and Identify Key Industries Hire Operation/Experience VPs Hire Innovation VPs Run New B2B Marketing Campaign Implement Change Management
IMPLEMENTATION Financial analysis Financial Analysis Annual Costs Savings Found CIO Office $ 3,000,000.00 $ - COO Office $ 4,850,000.00 $ 1,000,000.00 CEO Office $ 1,250,000.00 $ 1,000,000.00 Total Costs $ 8,100,000.00 $ - Total Savings $ - $ 2,000,000.00 Total New Costs $ 7,100,000.00 Key Takeaway: A low investment creates and navigates the next phase of growth
IMPLEMENTATION Financial analysis Sources of Revenue Growth Over 5 Years Source Number of Industries Served Number of Customers Served Average Earnings per Customer Current 20 1000 Increase 5 Years 40% 4X 28 4000 $31,250 3X $93,750 Key Takeaway: Even with a shrinking P/E Ratio the earnings will grow to $375 million
IMPLEMENTATION Financial analysis Financial Analysis Key Takeaway: Focusing on both improved execution and potential growth areas leads to massive valuation increase
RISKS: IMPACT VS. LIKELIHOOD 3 Risk Response 2 Introduce industry- specific focus to offerings. Hire headhunter to find best people for positions. Implement a Change Management Strategy 1. Increased competition 1 Impact 2. Difficulty in Talent Acquisition 3. Organizational Conflict Due to New Structure Likelihood
EXPONENTIAL GROWTH Is Celonis structured to seize growth opportunities? Should Celonis shift focus to industry-specific offerings?
PROJECT REVOLUTION Organizational restructure: Hire Operations and CustomerExperience Executive Hire Innovation and Design Thinking Executive Build out industry-specific teams Hire internal marketing department
COMPANY PILLARS AGILE INNOVATIVE LEAN UNLOCKING TRAPPED VALUE FOR CUSTOMERS
IMPLEMENTATION Financial analysis Costs Position Annual Costs Chief Innovation Officer $ 1,000,000.00 VP Partnerships VP Design Thinking VP Artificial Intelligence VP RPA VP Cloud Solutions VP Software Innovation VP Analytics and Insight VP 8 VP 9 VP 10 G&A Costs $ 150,000.00 $ 150,000.00 $ 150,000.00 $ 150,000.00 $ 150,000.00 $ 150,000.00 $ 150,000.00 $ 150,000.00 $ 150,000.00 $ 150,000.00 $ 500,000.00 SUBTOTAL CIO OFFICE $ 3,000,000.00
IMPLEMENTATION Financial analysis Costs CEO Office G&A Costs $ 1,000,000.00 $ 250,000.00 Chief Operating Officer VP Marketing/Sales VP Key Industry #1 VP Key Industry #2 VP Key Industry #3 VP Key Industry #4 VP Key Industry #5 G&A Costs Marketing Budget SUBTOTAL COO OFFICE $ 1,000,000.00 $ 250,000.00 $ 250,000.00 $ 250,000.00 $ 250,000.00 $ 250,000.00 $ 250,000.00 $ 350,000.00 $ 2,000,000.00 $ 4,850,000.00 SUBTOTAL CEO OFFICE $ 1,250,000.00
IMPLEMENTATION Financial analysis Financial Analysis Current Valuation $ 2,500,000,000.00 P/E: 80 Earnings Estimation $ 31,250,000.00 Average Customer Earnings $ 31,250.00 PE 20 Valuation =$375 million
KEY INDUSTRY CRITERIA Subtitle: Arial 24 Industry generates $2 million + in sales Industry has growth potential for Celonis Untapped value resides in industry
