Fact sheet
Name of the initiative (native
language): PROZEUS – Prozesse und Standards
Name of the initiative (English): PROZEUS - eBusiness Processes and Standards Sector(s) addressed: Manufacturing sectors, consumer goods industry, retail,
construction
Geographic focus: Germany
Start date: July 2002
End date: December 2008
Initiated by: The PROZEUS initiative was launched and is supported by the German Federal Ministry of Economics and Technology. The initiative is based on two initially separate project proposals put forward by the Institut der deutschen Wirtschaft Köln Consult (IW Consult) and GS1 Germany GmbH. These proposals were merged into "PROZEUS".
Implemented by: • Institut der deutschen Wirtschaft Köln Consult GmbH (IW Consult)
• GS1 Germany GmbH
Funding: € 13 million (provided by the German Federal Ministry of Economics and Technology)
Contact person(s): Mr. Ralf Wiegand
Institut der deutschen Wirtschaft Köln Consult GmbH Gustav-Heinemann-Ufer 84-88, 50968 Cologne, Germany Tel.: +49 221 4981-849 e-Mail: [email protected] Mr. Tim Bartram GS1 Germany GmbH Maarweg 133, 50825 Cologne, Tel.: 0221 94714-419 e-Mail: [email protected]
Links with other initiative(s): The PROZEUS programme is part of the Government's information society development initiative.
Website(s): http://www.prozeus.de/
Abstract
e-Business studies confirm that inter-firm processes are increasingly being digitised. A pre-condition for exchanging data with other companies electronically is the use of e- standards. However, small and medium-sized firms often experience difficulties in selecting the right standards and implementing them.
Against this background, the German PROZEUS initiative promotes the adoption of e- business among SMEs based on proven, recognised standards. PROZEUS focuses on companies with up to 500 employees from manufacturing, the consumer goods industry, retail and services. PROZEUS is funding projects in which SMEs implement e-business standards. Companies are eligible to receive a grant covering up to 50% of personnel costs for effort related to the project. The total funding provided per project is in most
cases between 20,000 and 50,000 EUR. About 60 SME projects have been commissioned as a result of two calls for proposals.
An innovative approach of PROZEUS is that companies receive grants only on the conditions that they meticulously document the project, and that this documentation can be made available to other firms as case studies to learn from. As a result, the project has a wider impact that goes far beyond the direct beneficiaries (the SMEs that participate in projects), since all SMEs can benefit from the meticulously documented project descriptions.
PROZEUS was launched by the German Federal Ministry of Economics and Technology in 2002. Initially, PROZEUS was planned to last until the end of 2005. Due to the success of the initiative, it was extended until the end of 2008; a further extension is possible. The initiative is implemented jointly by GS1 Germany (www.gs1-germany.de) and IW Consult (www.iwconsult.de).
5.4.1
Background, objectives and resources
Background and objectives
e-Business studies confirm that inter-firm processes are increasingly being digitised. This concerns, for example, procurement related processes, logistics, sales and cooperative processes in product design and development. The ICT-based automation of business processes enables companies to cut costs and to enter new markets. However, for SMEs in manufacturing, retail and service sectors it can be a challenge to make the necessary investments that enable them to participate in digital B2B value chains.
Against this background, the German PROZEUS initiative promotes the adoption of e- business in SMEs based on proven, recognised standards. The initiative's mission statement is that "PROZEUS provides neutral, independent and free information to companies
in Germany on how to automate their business processes and make them faster and more efficient."
PROZEUS was launched in 2002 by the German Federal Ministry of Economics and Technology in the framework of the Government's information society development programmes.3 The initiative is based on two initially separate project proposals put forward by the Institut der deutschen Wirtschaft Köln Consult GmbH (IW Consult;
www.iwconsult.de) and GS1 Germany GmbH (www.gs1-germany.de), which were then merged into one initiative.
The initiative is jointly implemented and managed by these organisations, in close cooperation with the "Netzwerk Elektronischer Geschäftsverkehr" (the German e- commerce competence centres). IW Consult coordinates the projects in the manufacturing industry, while GS1 Germany focuses on the consumer goods / retail industry.
Initially, PROZEUS was planned to last until the end of 2005. Due to the success of the initiative, it was then extended until the end of 2008.
The main objectives of the PROZEUS initiative are:
to promote transparency in e-business – and e-business standards in particular – by developing know-how and sharing this information with others;
3 The action plan currently operational is the agenda "ID 2010 – Germany: the information society", which was launched in November 2006.
to increase security in planning and investment decisions for SMEs by providing recommendations for e-business standards and applications;
to increase the practical knowledge and managerial understanding of e-business by disseminating good practice examples;
to empower SMEs by enabling them to implement e-business solutions on their own.
The main strategy used to address these objectives is to leverage multiplier effects, by showcasing good examples of e-business usage in SMEs to peer companies. To this end, projects are supported in which selected SMEs implement e-business standards. The results of these projects are documented and made available to other SMEs to serve as examples, i.e. in a form they can apply in their own business. Special emphasis is placed on concrete, practical applications and their commercial benefits.
By exploiting the experience and learning factors from concrete projects with companies, PROZEUS aims at promoting the transfer of proven e-business solutions into SMEs. Target groups
PROZEUS focuses on companies with up to 500 employees from a variety of sectors, mainly from manufacturing (e.g. textile and footwear, food and beverages, chemical, rubber and plastics, machinery and equipment, electronics), the consumer goods industry and in retail.4
The rather broad list of sectors implies at first sight that the target the initiative is not focused on a specific industry. However, the individual projects that are conducted with SMEs clearly have a sectoral focus. Calls for project proposals were geared towards specific industries; furthermore, the documentation of these projects also addresses predominantly companies from the same sector or from closely related sectors.
In a way, the PROZEUS initiative addresses primary and secondary beneficiaries.
"Primary beneficiaries" are those companies that participate in the e-business projects. 60 SME projects have been commissioned as a result of two calls for proposals. 25 projects which had been commissioned in the first call in 2002 have been completed as of December 2004. Most of the projects of the second call are under way.
"Secondary beneficiaries" are those companies that download the documentation of these projects (or other resources such as guides and brochures) and thus benefit from the experience and lessons learned.
Targets
The main operational targets of PROZEUS were
to initiate and support about 60 SME e-business projects and to document these projects to the benefit of other companies.
There are no other specific quantitative targets for the programme as a whole. However, targets play an important role within the individual SME projects. The definition of e- business related objectives and targets is an important criterion for the selection of project proposals submitted by SMEs.
4 Grants are provided only to SMEs with up to 249 employees, in compliance with the European de-minimis regulation for national funding.
The achievement of targets is then monitored and – to the extent possible – reported on the basis of quantitative data. To this end, the participating companies have to deliver monthly progress reports about their e-business project, including information about the effects which the project has had on their business.
Examples of metrics used to assess the effectiveness of projects are:
Acquisition of new customers within one year after the project has been completed (e.g. if market expansion was a main project objective)
Increase in sales / market share Increase in brand recognition
Employee motivation and satisfaction (measured by employee surveys)
Improvement in process efficiency (e.g. time needed to accomplish specific tasks in production / distribution)
Metrics are selected in accordance with the project objectives. Resources
The PROZEUS initiative has been funded by the German Federal Ministry of Economics and Technology with a total amount of about € 13 million for the period 2002-2008.
5.4.2
Activities
5.4.2.1 Implementation
PROZEUS supports SMEs in recognising their e-business potential and taking the necessary steps to exploit it. This is achieved by supporting concrete e-business projects of enterprises from various sectors, in particular from manufacturing, consumer goods and retail sectors.
Support to SMEs is provided in several ways, in particular by providing grants (see below) and consulting services. The projects focus on business processes and e-standards that support these processes. SMEs implement e-business solutions in their own operations, based on globally applicable processes and standards. PROZEUS monitors these projects and documents the results in full detail, in order to enable other SMEs to learn from the experience of the participating companies (good practices, challenges). Soliciting, supporting and monitoring SME projects constitutes the core activity of PROZEUS, but there are other activities as well. The main pillars of the initiative are:
SME projects: selected SMEs receive a grant for an e-business project, based on the
use of commonly accepted standards.
Good practice examples: The results of these SME projects are documented in
detail and made available to other SMEs on the PROZEUS website, in a form they can apply in their own businesses. Special emphasis is given to practical applications and the commercial benefits achieved.
Information resources / networks of experts: PROZEUS initiated working-groups
that gather standardisation and e-business experts from companies and institutions in Germany. Their objective is to develop practical recommendations to the industry and to policy. Five working groups (consisting of about 5-7 experts each) have been established on the following issues:
§ standards for identification
§ standards for product classification § standards for catalogue exchanges § transaction standards
§ process standards
Their recommendations are documented in brochures that can be downloaded from the website. About 10,000 copies of information brochures about e-standards have been printed.
In addition, information brochures about a wide range of e-business related topics have been prepared and published by the project management (about 70,000 copies in total). These were mainly distributed at events or mailed to target groups. About 14,000 orders for brochures have been received, more than 64.000 have been downloaded in electronic format from the website.
Multiplier networks: Experts inform and train multipliers from employers",
industrial and trade associations, as well as representatives of IT service companies, on the subject of e-business and the dissemination and application of e- business standards. To this end, 500 industry associations were contacted and offered services; about 60 associations replied to this offer. The work is now focusing on these 'motivated' associations; they could become ambassadors for the issues discussed in their networking with other associations.
Website (www.prozeus.de). Resources available online include, besides the detailed documentation of case studies, PDF versions of brochures and leaflets, and access to e-mail hotlines. Companies can download resources free of charge. The website also offers access to an IT consultant pool, where PROZEUS offers a database listing specialists in the implementation of e-business solutions for various purposes.
SME e-business projects
The SME e-business projects are the focus of PROZEUS activities. Projects have been commissioned on the basis of two calls ("phase 1" and "phase 2"), inviting companies to submit proposals for e-business projects. Proposals were communicated via mailings to more than 30,000 companies, using mailing lists of the organisations implementing PROZEUS (IW Consult, GS1 Germany and the Netzwerk Elektronischer Geschäftsverkehr maintain comprehensive company databases to support their communication activities) and other communication channels (press releases, ads, newsletters of various organisations).
To be eligible for support from PROZEUS, companies must have fewer than 250 employees, a maximum annual turnover of € 50 million and be independent companies, not subsidiaries of a group, in order to match the requirements of the EU de-minimis regulation for national funding.
In the first phase, PROZEUS received more than 300 e-business project proposals, out of which 25 were finally selected (see table). In the second phase, about 30 projects were selected. The duration of projects differ according to their complexity. Most projects last between 4-15 months.
Phase Call
launched in Proposals received Projects commissioned Project status
Phase I 2002 more than 300 about 25 completed
Phase II 2006 more than 300 about 35 ongoing
The second call for proposals (which closed on 17 February 2006) focused on projects in the following sectors and application areas:
e-Business for service companies working closely with production firms (in particular for companies active in the maintenance & repair of industrial machinery and buildings)
Implementation of electronic product catalogues based on BMEcat
EDI usage in the following sectors: building and housing, beverages, textile Optimisation of business processes through EANCOM messaging in the FMCG (fast moving consumer goods) industry
Optimisation of product data as a basis for e-business
Out of the 34 projects supported in phase II, 7 projects focus on the implementation of a webshop, 7 on ICT-supported work-flow optimisation, 6 on the establishment of an e- catalogue (based on recognised product standards), 5 on the implementation of a CRM system (customer relationship management), and the other on topics such as SCM (supply chain management), e-procurement and RFID implementation.
A new call for proposal (open until October) was opened in 2007. Companies could submit project proposals on the following topics:
Electronic news
Use of EPC/RFID in logistics and internal production processes Optimisation of product data as a basis for e-business
Use of Open Source ERP systems Grants
Companies whose proposals have been selected are eligible to receive a grant covering up to 50% of personnel costs for effort related to the project. The total funding provided per project is in most cases between 20,000 and 50,000 EUR, depending on the project. There is an upper limit for various project types. The following rules apply:
Rates: A person-day is calculated with a rate of up to 780 EUR per day, depending
on the personnel category.
80/20 rule for outsourcing: for projects in manufacturing sectors (managed by IW
Consult), to be eligible for funding, a minimum of 20% and a maximum of 80% of the project work must be conducted internally (by staff of the company); vice- versa, 20-80% of the work can be outsourced to external service providers. On average, companies used about 40% of the grants for external service providers and 60% for their own effort.
In projects in the consumer goods industry (managed by GS1 Germany), the average share of grants used for paying external ICT service providers was lower (estimated at about 15-20%).
Consulting and advisory services
PROZEUS itself is not a consultancy, but its co-operation partners offer two forms of consulting services to participating SMEs:
Companies are entitled to a one-day introductory consultation offered by GS1 Germany for a reduced fee of € 200 (compared to the market cost of about € 1,400). This service is aimed at SMEs in the consumer goods and retail sectors.
Another introductory consultation, indirectly provided by PROZEUS' co-operation partner "Netzwerk Elektronischer Geschäftsverkehr" ("e-Business Network"), is free of charge. This service focuses on smaller companies in the manufacturing industry (and retail) which take their first steps in e-business.
Besides, companies can use information resources provided by PROZEUS, such as the "SME IT-Services Pool." This information helps companies finding the right service provider for their e-business projects.
Selection and implementation of projects – the process
The selection process for the SME projects consisted of the following steps:
1. Statement of interest: call for proposals with information about the initiative and the requirements for participation, asking companies to state their interest. At this stage, only a brief 1-page form had to be filled in – no detailed proposal was required.
2. Questionnaire: Companies which had responded were sent a questionnaire.
3. Company visit: An appointment for a first company visit was made with firms that had returned the questionnaire, to discuss their plans in more detail.
4. Letter of intent: For the final selection, all companies that had passed the previous rounds were asked to send a letter of intent, confirming that they accept the requirements for participation (including that the project documentation would be publicly available).
5. Selection of the projects, in consultation with the German Ministry of Economics and Technology.
The implementation of the selected projects consists of the following phases:
1. Detailed project description: companies had to develop a project plan, with information about the status-quo, their business objectives, the targets, the approach to be used, and the budget (person days), based on a template provided by PROZEUS.
2. Project implementation, according to the project plan, with regular progress reports to PROZEUS. Besides controlling, PROZEUS provided help-desk functions and advice to projects if needed.
3. Final Report: After completion of their project, the SMEs had to send a detailed final report. This included a questionnaire on organisational / structural changes and on the business impact.
The following examples are about projects completed during 2002-2006. They illustrate the type of activities that are initiated, supported and documented (for the benefit of other companies) by the PROZEUS initiative.
PROZEUS project example:
Güde GmbH – establishing an e-catalogue
Güde GmbH, founded in 1948, focuses on the production of lockwashers with high traceable quality (metal products sector). It has about 50 employees and is located in Plettenberg, North Rhine-Westfalia, Germany. More than 50% of the production are exported.
A few years ago, one of the major customers requested that they could order products from Güde from an electronic catalogue. Until then, the customer used to document and maintain product data itself – the request was that Güde should provide and update product data electronically. Güde decided to comply with this request (in order to keep the customer) by establishing an electronic product catalogue based on widely used e-standards: it decided to use e-Cl@ss 5.1 as its classification standard and BMEcat 2005 as its catalogue exchange format. Data for about 1200 articles should be maintained and updated by Güde.
Güde proposed this project (successfully) to the PROZEUS initiative. The project started in March 2006 and was completed in October 2006. The grant provided by PROZEUS was €32,370. The project was successfully implemented, although some challenges were experienced. For example, the initial collection of all the required product data was more work than anticipated. On the other hand, establishing the eCl@ss classification on the basis of the collected data could be accomplished faster than expected.
The company is convinced that the successful implementation of the e-catalogue for product data created the basis for their participation in the digital economy. It is committed to extend the scope of its electronic exchanges and will now focus on orders and invoices.
The project – including challenges experienced – has been documented as part of the PROZEUS requirements and can be studied by other companies who plan to engage