How IndEx ties into the Strategy 2015
One of the key components in unlocking the Group's potential is the IndEx program aimed at taking at least 1 billion euros out of 7 billion euros in indirect costs at the corporate functions and the Corporate Divisions. To that end, the Group between November and January set up a project organization and an own governance for the program, agreed on top-down targets and generated savings ideas as well took stock of the existing initiatives.
So far more than 150 initiatives totalling more than 800 million euros have been identified to contribute to the overall goal. Following the commitment of the savings targets by the divisional CEOs and the kick-off of major initiatives, the divisions will continuously report on the program's process to achieve its targets by the end of 2010. The bottom-line effects will directly be measured in the profit-and-loss account of the Group.
In IT for instance 38 initiatives have been identified, including the consolidation of the IT operations in Scottsdale U.S. and the transfer of services to Prague and Cyberjaya, or the outsourcing of the European telecommunications services to Telefónica aimed at saving around 150 million euros over five years. Another example is Marketing & Sales where 22 initiatives have been identified, including the centralization of transactional activities such as sales reporting.
In addition, the measures target anything from a reduction in travel and entertainment costs to structural changes to the general overhead. All in all, the IndEx measures will help make the organization leaner and reduce unnecessary bureaucracy, therefore improving performance as part of the Strategy 2015.