Pappas - Customer service on trial
The car dealership group Pappas has just completed a benchmark project. This measured running costs and services, the complexity and the quality of the company’s IT. In addition Maturity was asked to review the current situation in terms of future requirements, processes and technologies.
It is probably in the nature of the beast to measure oneself and one’s performance against others. This is particularly noticeable with cars, the “dearest child” of many Central Europeans. It carries people with their luggage from A to B – and often also conveys a good deal of prestige into the bargain. In addition to emotional factors there are concrete measurements for the latter, primarily performance and price.
Over the last few years at least services have been judged by the rule – the more the better. But this attitude has gradually changed from the point of view of protecting resources. More and more customers are now striving to find the perfect balance between investment and earnings, with former German Chancellor Helmut Kohl putting it very succinctly, “The main thing is what comes out.”
The parallels to IT are unmistakable, even though the high tech industry has not yet managed to establish its products and services as prestige objects in the enterprise segment. This is where IT in the ideal case scenario is a strategic tool, whilst critics only regard it as a non-transparent block of costs. “Generate added value for the company using economical IT solutions” is the concept put forward by Karl Hüttinger, who has been head of the IT Department at Pappas Group based in Salzburg for the last ten years. With a workforce of around 2,600 people in Austria, Bavaria and Hungary, the Pappas Group is one of the largest car sales companies in Central Europe. The company was founded 57 years ago in Salzburg and now has an extended network of its own businesses and holdings and is an authorised sales and servicing partner for Mercedes-Benz, Smart, Chrysler, Jeep, Dodge, Mitsubishi Fuso and KIA (in Hungary only). In 2007 the company’s turnover reached a total of over one billion Euros in its 40 dealerships with cars, financial services, services and advice.
IT - efficient and available
“Our IT is not an end in itself but as effective a value generator as possible for all our business units”, says IT Manager Karl Hüttinger summing up the guideline of his organisation. The basis of the operation is a correspondingly efficient and highly available IT landscape with a high level of integration between the various systems. Insular solutions are frowned upon. Hüttinger and his team maintain an “intensive dialogue with the various business units.“ The close relationship with the various departments is designed to ensure that the IT systems “are moving in the right direction” and keeping to the slogan of “Short distances due to a high level of integration“. There are 14 staff working in the Pappas Group’s core IT department whilst the extended department comprises a further 13 people providing support at the various sites. In addition Pappas also provides support for IT-related companies which are linked by means of service contracts and service level agreements. These include the sales department of the Mercedes-Benz general agent in Austria as well as the general agent for the same company in Hungary.
“I personally tend towards a rational view with a certain amount of luxury and a great deal of functionality”, is how Hüttinger describes his dream car, whatever that may mean for his understanding of IT. Since a benchmarking comparison last year, however, he has verification in black and white that he has adopted the correct approach with this attitude. “Our consumption of resources in the IT sector is at the lower limit, we do not waste anything.” Although Hüttinger was already convinced of this, but in discussions with the management “my own points were made credible by the benchmark”.
Potential for improvements
The idea for conducting a comprehensive benchmarking process came from Commercial Adviser, Alexander Pappas, the Group’s Proprietor and Managing Director. There was no single reason for his making this call, remembers Hüttinger, who previously had only had experience of benchmarking in single segments. However, the IT manager recognised that the project would provide answers to a wide range of unanswered questions in a relatively short period of time. “Are we really as good as we think and where is there potential for improvement which can only be identified by comparison with other companies?” The aim was to back up what was felt with cold hard facts. Hüttinger admits that at the beginning he was confronted with “mixed feelings“. “I was simply not sure what to expect.”
The Pappas IT department is primarily concerned with the core areas of IT and also works closely with external partners. Partial outsourcing covers the areas of network management, maintenance of technical systems, training, support for technical functions and assistance with development projects. The IT landscape has a cascade structure with strong central components which are available for all the sites. In the ERP sector Pappas only uses its own developments. These are supplemented by licensed programs for areas such as business intelligence which are operated with external partners and have been partially modified by the company itself.
Focal points of the benchmark
The focal points of the comparison with reference data were the thorny issue of running costs and performance, as well as the complexity and quality of the Pappas IT systems. In addition Maturity was also asked to review the current situation in terms of future requirements, processes and the technologies used. The result grade was “very good“. “We were better than the eight top companies from the database with comparable environments in ten out of twelve of the main segments under review.”
In the course of the benchmarking project, Hüttinger says that the target times agreed in advance were achieved. However, the cost of the benchmarking process itself (three to four man weeks) is described by the IT manager as “not insubstantial“. The volume of the work was rather larger than originally thought “but we adjusted our priorities accordingly.” The reason was that “it was not a simple process to input our IT organisation into the standard pattern which really applies to larger IT organisations.” The Maturity benchmark model was adopted to precisely map the Pappas specifications without changing the original client data. For example the storage section was not listed and regarded as a separate segment for the review but as an integral system together with the databases.
Hüttinger supplemented the benchmark with a user survey. This highlighted “lots of ideas for making further improvements to IT“. The best grades were awarded for the helpfulness, competence and service of the IT department. This once again reflects the universal criteria of a good service provider – regardless of whether the work is centred on the IT system or the mobility of the customers concerned.
Download the case study IT benchmark at Pappas as a PDF file