Situation
Our Client is a significant enterprise information management services company with a long trading pedigree. However in recent years it has suffered from increased competition, variable performance in some accounts and declining margins.
Working with the client’s evolved support functions we needed to develop a road map that will support the functions to achieve significant savings in their cost base. Delivering a change in culture and performance embodied in the proposed roadmap would be a major challenge for our client:
- it has not historically had a strong cost control culture and transparency of costs has been low
- it has a mixed history of delivering change
- the business is not used to working in a cross-functional way
- the business is not used to a disciplined programme management approach
Approach
Over a 16 week period Lansdowne provided an integrated and comprehensive approach working with the business support functions to:
- establish clear baseline of costs aligned to business processes and improved cost transparency
- benchmark performance against several appropriately selected comparators from similar businesses
- developed diagnosis of underlying root causes of performance issues
- developed opportunity levers to focus improvement initiatives
- worked with the business to develop and tune set of improvement initiatives in each area that met the performance improvement target
- developed recommendation for shared services and operating model blueprinting and roadmap for implementation
The resulting roadmap was developed with the management team and combined structural and incremental improvements in a prioritised set of initiatives
Results
The Lansdowne led review has developed a roadmap to transform effectiveness and efficiency of our clients support functions.
The combined impact of the initiatives reduce overhead costs from 22% to 17% of revenue over 3 years – a reduction of 23% and the programme has achieved its targeted $27m savings.
The priority is now to develop a standardised operating model and management control culture and then move to a Shared Service / Centre of Excellence model. This included developing a detailed initiative launch plans and mobilising the business to make a step change in culture and performance.