Cost Efficiency
Target: A competitive cost structure is necessary to defend a market-leading position, or to enhance an operation’s position as a challenger. This is needed in order to more easily manage fluctuations in demand and changes in currency exchange rates. Cost efficiency is also a prerequisite for being the innovator in the industry.
Hexagon has, relative to its peers, a strong operating margin that is proof of a cost-efficient organisation. An example of Hexagon’s focus on cost efficiency during the year is the very quick implementation of cost synergies identified in regards to the acquisition of Intergraph. The main cost synergies identified were the combination of technologies, reduction of overlapping resources and optimisation of distribution network and cross selling of existing products.
Innovation
Target: Capacity for innovation is central to Hexagon’s opportunities to become an attractive business partner for customers long-term. Investments in R&D are, therefore, highly prioritised within Hexagon. Each year, more than 10 per cent of net sales are invested in R&D.
A total of about 2 000 employees are engaged in R&D at Hexagon and a large number of new products were introduced to the market during the year. Expenses for 2010 totalled 139.4 MEUR, corresponding to about 9.3 per cent of net sales.
Industry’s Best Management
Target: Management know-how and experience are decisive factors that are essential for being able to operate successfully. To have the right skills at the right place at the right time is important within Hexagon. Hexagon recruits local personnel and is therefore regarded as a local company within its respective geographical markets.
From a business point of view, Hexagon makes sure that required competences to grow the business are in place. From an employee point of view, Hexagon offers opportunities for further development.
Fast Decision Making
Target: Short and fast decision-making processes, along with a time efficient
implementation, enhance competitiveness and raise organisational capacity. Hexagon strives to have a working environment in which there are clear responsibilities, a flat hierarchy and minimal bureaucracy.
Hexagon’s organisation is characterised by far-reaching decentralisation, creating a sound basis for committed and motivated employees. During the year this has been extremely beneficial in the acquisition process of Intergraph enabling Hexagon to make fast operational decisions when needed.