Cost Reduction Program
Overview: A large services provider was missing their financial forecasts and needed to rapidly adjust their SG&A in response to performance gaps to plan. The project was seeking to find $60M from the Americas operation in 120 days.
Approach: We rapidly set-up a program PMO and a broad cross functional team from every function and business line in the company consisting of 20+ leaders. The team include a mix of internal and outside advisors that focused on the following functional areas: Headcount and organizational design, souring and procurement, short-term operational improvements, medium to long-term operational improvements, marketing and event measuring and rationalization and gross profit / margin expansion. Each team rapidly performed a suite of analytics and prioritized top opportunities
Within 45 days $80M+ of opportunities were identified. The team was organized around seven team executives that were responsible for various cost reduction initiatives to deliver the savings. Some of the teams were supported with outside analytics and project management expertise to deliver the projects.
Results: The team exceeded their goal of saving $60M in savings. Over 30 initiatives were successfully implemented and those initiatives added $62M of EBITDA in year 1 of the program and $80M+ of savings on a recurring annual run rate basis. The project also identified another $25M of other opportunities to be adopted in the following year.
Business Process Outsourcing (BPO)
Overview: A large service provider with 45K+ employees was seeking to reduce costs by leveraging shared services and outsourcing to reduce internal headcount in back-office and customer support functions. We executed 3 outsourcing and shared service projects for the organization from analysis through post implementation support.
Global Finance and Accounting: Following the merger with a competitor it was determined that fiancé and accounting process and technology represented immediate risk and a very high cost ratio when compared to competition. Following a four month analysis, a business case was developed, Accenture was selected as the outsource partner for F&A and the project was kicked-off 2 months later. During the first year of the project Americas and European finance operations were fully outsourced for the following functions: A/R, AP, accounting, billing, credit reporting and level 1 FP&A reporting. A total of 300 domestic employees were transitioned to 2 outsourcing centers (India and Romania).
Customer Back-office Billing and Financial Support: The customer provided finance support services that included building monthly P/L’s and A/R collection services for their clients. A business case was developed that outlined the opportunity to outsource 500+ resources across 2 divisions if a new operating model was developed. The current operating model had 30+ local offices that provided a complete support model to a client from sales to back-office support. A new model was designed where sales and marketing professionals would stay in market, account management would be centralized in 2 regional shared service support centers and all back-office staff would be outsourced in India. The project ultimately transitioned 500 resources to lower cost locations did not lose a single client during the transition.
Data administration and entry: The company has a small division that needed to immediately improve financial performance. We identified an opportunity to transition 50 resources to two low cost geographies from high cost markets. We led the project from business case to execution. The project is currently in the adoption and testing phase and will be complete in the next six months.
Results: The client will realize approximately $30M in annualized run rate savings from the 3 BPO / shared services projects. The costs to savings ration is ~2.5X inclusive of consulting fees, severance, BPO set-up fees, technology and facility build out costs.
Overview: A division of a large international real estate firm promoted a new leader for the North American division. The new leader developed an organic growth strategy but needed to mobilize the 20K employees to execute the new strategy. We assisted the new leader by crafting a program that would support the 60 domestic markets to create bespoke market plans based on the new strategy.
Approach: Following the completion of an analytical confirmation of the new market strategy, we built a three step approach to evangelizing the new strategy at the market level of the company.
Step one was to design the strategic inputs and outputs of the planning process. We developed a standard suite of output deliverables for all markets and also built a comprehensive set of data on every market. The data include custom markets that outlined share of market, competitor comparisons, economic data, market segmentation to identify potential growth opportunities, historical financial data, customer surveys and surveys of top sales performers. In addition all the input data was built in a portal that allowed for constant updating and a repeatable process in year 2.
Step two was to pilot the process in 1 market. We facilitated the development of a bespoke market plan during a two day in market planning session jointly with the market leader
Step three was to roll-out to all markets. The top fifteen markets received facilitated market planning sessions and smaller markets were brought together for one market planning education session.