Business Process Redesign

Fix a Broken Back-Office

On-Line financial Information Service

Our client, a large on-line services company serving the financial markets had grown through more than forty acquisitions and was faced with the problem of integrating forty versions of the back office functions of order capture, fulfillment, billing and collections. It its current fragmented state, the company was having a difficult time meeting customer demands for unified billing. Further, previous cost cutting efforts and staff turnover had resulted processes with frequent billing errors which gave customers ample excuses to not pay or late pay their bills, producing a rapidly escalating backlog of uncollected receivables. We worked with a client team to prioritize which process elements to tackle with what priority and to determine what staffing levels were needed in each department to clear the receivables backlog. We then assisted them with the design of an efficient approach for the most broken elements of the order-to-cash process.

Improve Field Support Process

Business Software Company

One of the largest software companies had developed a global network of several thousand very powerful market influencers who led important virtual communities. Our client’s expectation was that these communities would help customers improve their experience with the client’s products, thereby cutting down on calls to the help desk and inclining them to be more loyal and buy additional products. While the influencers loved the program, its processes were non-scalable and the experience of the individual influencer varied widely, based on the experience and creativity of his rep at the company. Our task was to regularize service delivery to achieve a scalable model without compromising service quality.

Improve service implementation process

On-line Services Company

A major on-line services organization asked us to help it improve its service implementation process. While the process often worked well, there were many instances in which implementation projects took too long, cost too much and frustrated customers, sales reps (whose commissions depended on successful implementations) and the implementation staff itself. Through combinations of internal and external benchmarking and propagating internal best practices we redesigned this process to make it run faster and with much better quality. This new process which is about to go into a pilot demonstration phase in 3-5 regional offices is expected to product more than $10 M in incremental profits from earlier revenue starts, better customer retention, greater sales of incremental services and reduced lost business from customers who abandon the service during frustrated implementation processes.

Business Consolidation

Financial Information Services

A $100 M information services company led a market consolidation among a set of related players to build a $1.5 B service company serving the financial services industry. The company had developed a very compelling technology strategy to deliver the services of all the acquired entities through one suite of hardware platforms, software tools, and networks, thereby eliminating the costs of maintaining multiple incompatible systems and processes. To help the company realize these savings, we developed an orderly consolidation process to sell its customers on the benefits of the new technical environment, install the new technology, and rationalize the multiple sales forces and billing systems that put the entire plan at risk.

Sales and Marketing Cost-
Effectiveness

Telecom Services

One of the largest telecommunications companies was concerned that expenses for sales and marketing were rising faster than revenues, and that its cost structure might be higher than that of its principal competitors. After detailed benchmarking our client’s costs versus its competitors’, and a careful analysis of where his organization was spending its money, we identified opportunities for nearly $100 M annual cost savings through restructuring the marketing and sales functions responsible for over $20 B in revenues. These savings were achieved at the same time as revenue growth has accelerated.

Improving Marketing and Product Management

On-Line Services

In this assignment, we consolidated highly fragmented marketing and product management activities in the largest division of this $6B print and on-line services company. These changes enabled the company to bring a higher degree of professionalism and expertise to marketing and product management as well as save money by removing one layer of management. In a second division, in which these functions were grossly overstaffed and where there was excessive spending for outside services, we identified a series of specific organizational and budgetary cuts to save nearly $10 M annually. With a third division, we devised a new organization structure for product management, marketing, and sales to enable renewed business growth after many years of stagnation caused by cost cutting to the point of starvation.

Sales and Service Efficiency

Financial Information Services

We developed a multi-channel sales strategy to help financial information service close the more than 50% sales efficiency gap it had versus its principal competitor. We also developed a customer service improvement strategy that addressed both the root causes of high levels of customer churn and the company’s disadvantaged service cost position. As this latter strategy is implemented, our client expects to lower its customer churn due to dissatisfaction by ten percentage points, and lower unit cost for customer service by 20-25%.

New Product Process

Electronic Information Services

A $500 M print and electronic information service was concerned that, as its organization was transitioning from purely print based products to a family that mixed both print and electronically delivered output, the new product development process was near breakdown. In short, the technology, editorial, marketing, and sales functions were constantly at loggerheads. We worked with staff in these four functions to develop a revised process, shortened cycle time by a third, and smoothed a process that had operated with so much rancor. In a later assignment, we developed an information technology plan for this client to enable them to focus their limited resources on applications of greatest value. In this plan we identified which functions could be safely out-sourced, and which needed to be kept in house because of their criticality to our client’s core functions.

Improved Customer Care

Telecom Services

A major telecommunications carrier was concerned its customer care organization had grown so large and complex that it was no longer manageable. Our analysis focused on dramatically improving service quality as seen by customers and decreasing operating costs through reduced cycle times and more efficient business processes. In addition we identified opportunities to recover many hundreds of millions of dollars in working capital through faster service provisioning (permitting earlier billing) and dramatically improved credit and collections processes.

Faster, Cheaper Billing Processes

Telecom Service Company

A major telecommunications carrier was experiencing many delays and interruptions to its billing processes. Billing seemed to be in a constant state of crisis, requiring Herculean staff efforts and several tens of millions in excess costs. Bills were often incorrect permitting customers to withhold payment, often for months while disputes were settled. In some cases, bills were several weeks late affecting cash flow quite severely. We conducted a thorough review of billing with a cross-functional team and identified seven areas for improvement, including investments in software upgrades and testing and introducing a process-driven organizational model with uniform, shared process metrics. The company anticipates that these changes will shorten processing cycles by 30-50% and lower unit billing costs by approximately 10%.

Reducing Care, Provisioning and other operations costs

Telecom Company

A large US-based telecom carrier was under pressure to reduce costs as the market prices for its services went into free-fall. We examined its customer care, provisioning and related operations functions, which in aggregate represented over $1.5 B in annual costs and over 15,000 staff. In conducting a series of internal and external benchmarking analyses we identified which products and customer segments were causing disproportionate costs. We then identified specific areas that were overstaffed relative to the needs of the business, which enabled our client to target staff reductions intelligently instead of applying an across-the-board staff cut.

Understand Merger Economics

Hedge fund

Our client, a mid-sized hedge fund focused on the technology industries, has had us do several analyses of the economics of various mergers in the telecom equipment and services sectors. In two cases, we identified significant potential synergies that the merging companies had not announced, so as to have hidden reserves to offset potential future market weakness. In two other cases, our analyses showed that the merging companies had over-hyped the benefits of their mergers. The former companies produced several years of better-than-expected earnings and shareholder value growth, while the shares of the latter two companies have fallen sharply in value as a result of repeatedly missed earnings projections.

Post-Merger Integration

Internet and Software Services Company

Our clients, the CEO’s of two Internet and software services companies had just signed a letter of intent to merge their companies. We were retained to work with a cross-company team to address all issues of post merger integration in parallel with the legal and financial due diligence phases of the discussions, so that they day that the merger received formal approval, the companies could begin joint operations. Our work addressed all elements of the two businesses including marketing and sales, operations, R&D, and administration. Within four weeks we developed a comprehensive plan to combine the companies, achieve a minimum 10% unit cost decrease, retain all major accounts and key staff, and complete the integration with ninety days of deal closure.

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