Sonova Group

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The Sonova Group (formerly the Phonak Group) is a byword for innovative hearing healthcare solutions. The Group specializes in developing, producing, and selling hearing systems that feature leading-edge technology. The Sonova Group also leads the market in wireless communication systems for audiology applications. Two of the Group’s key strengths are in-depth expertise in hearing technology coupled with a highly effective distribution network. In collaboration with customers and business partners, Sonova makes a significant contribution to a better quality of life for people with hearing impairments. A global market share of around 23 % positions the Sonova Group as one of the world’s leader providers of hearing systems. In the fiscal year 2007/2008, Sonova achieved a turnover of 1,2 billion Swiss francs, with both earnings and market share sharply up in all key markets. Committed to operations that span the globe, Sonova is pursuing an ambitious growth strategy in which innovation, customer focus, and proactive cost management all play a pivotal role.

Hitting financial targets precisely is the dream of every CFO – especially those at publicly traded companies. The fact that a mere 18% of people with hearing impairments currently wear hearing aids leaves vast potential for a company that is aiming to boost its penetration of the world’s market for hearing systems. Accordingly, Sonova, which has a footprint in more than 90 countries and a global distribution network comprising over 50 subsidiaries, set itself the ambitious goal of earning two-thirds of annual sales with products that have been on the market for less than two years. Meeting this target placed exacting demands on both planning and consolidation, not to mention necessary ongoing adjustments to the Group’s activities along the way.

“It’s all about living up to what we have told our shareholders and the market about the future course of our business,” explains CFO Oliver P. Walker. “Every planning phase challenges us to advance still further. In practice, that means planning new product launches, marketing activities, gains in market share, sales, and margins, and every ancillary activity on an enterprisewide basis. And we can only do that if we have the right systems.” To master this challenge as efficiently as possible and ease the burden of planning on its subsidiaries, the Sonova Group decided to deploy IBM Cognos 8 Planning and IBM Cognos 8 Controller.

Challenges faced
Dissatisfied with its legacy solution several years ago, Sonova began looking for ways to make its planning and controlling processes more effective and provide greater support for them. The main challenge was to simplify planning vastly by implementing an easy-to-use, Web-based tool for the managers of the more than 50 Group companies that had sprung up in just a few short years. The hope was that this approach would also simplify and accelerate enterprise-wide planning at Corporate Finance at the Group’s Swiss headquarters.

As a result, the organization decided to install IBM Cognos 8 Controller as its controlling and consolidation tool. Going forward, the Group also wanted to make its planning phases more transparent – and to make planning facilities available over the web flexibly, especially for the subsidiaries that were distributed around the globe. Since two years Sonova also launched an IBM Cognos 8 business intelligence (BI) solution for optimal presentation of financial data and the other key performance indicators used throughout the Group.

Strategy followed
Sonova’s strategic decision meant that new software would have to be rolled out. Accordingly, the Group evaluated various market players to see which one could best meet its additional planning needs over and above its existing controlling requirements. Walker’s deep-seated conviction played a large part in this decision process. “Wherever possible, I try to adopt a single-source strategy,” the CFO notes. “In the case in point, that could have led to us choosing a different supplier than IBM Cognos to provide the controlling, planning, and subsequently the BI solution. But even in the preliminary stages, IBM Cognos already demonstrated the most coherent set of controlling and planning functions.”

Sonova still went ahead with a detailed evaluation, and invited several other solution providers to submit proposals. Three factors finally clinched the decision for IBM Cognos:

• The powerful functionality of IBM Cognos 8 Controller for users at Corporate Finance
• The extensive functionality and ease of use of IBM Cognos 8 Planning is for both Corporate Planning and the staff of the Group’s worldwide subsidiaries
• A coherent vision and a comprehensive strategy, coupled with Sonova’s desire to have controlling, planning, and BI functionality all implemented on the same single-source platform