Marsh Business Advisors, LLC
RESULTS
Profit Improvement
PROBLEM: A company has a division whose sole function is to deliver goods and services to the other operating divisions. The service division was losing $1 Million per year. The company could not afford to absorb these losses any longer but could not eliminate the service division as it supplied critical resources to the other (profitable) operating divisions.
SOLUTION: A market and pricing analysis was undertaken and a strategy was developed whereby the internal service division would only offer those goods and services where it could be the low-cost supplier.
RESULTS: Transaction costs and operating costs were significantly reduced. Instead of contacting multiple vendors, the operating divisions would approach the internal service division first knowing that it was the low cost provider. The service division generated an annual profit of $.5 Million in its first full year under the new strategy. The reduction in transaction costs (the time operating managers devoted to bidding) were not quantified.
Performance Improvement
PROBLEM: A company bought another company in a somewhat related industry. The acquiror did not have the time or resources to manage the acquiree on a day-to-day basis and was concerned that its investment would not produce the anticipated returns.
SOLUTION: The interests of the acquiree had to be aligned with the interests of the acquiror. To achieve the financial objectives an incentive compensation plan was developed for the acquiree's the management team which rewarded them for achieving established goals and prevented them from gaming the system.
RESULTS: The acquiree has produced significant returns which are in excess of expectations and the acquiror's management is not distracted by needing to intervene.
Strategic Planning
PROBLEM: A company is owned by several individuals who all have different investment horizons. The majority shareholder believed that the other shareholders were more concerned with maximizing short-term returns instead of long-term value. Additionally, the company's historical product line was being battered by both changing technology and a shrinking customer base.
SOLUTION: A strategic planning process was undertaken. Long term objectives which achieved the shareholders' goals were developed. A five-year strategic plan was established. Most importantly, tactics were identified and employed to achieve the financial goals by broadening the company's product mix and expand its geographic reach beyond its established market.
RESULTS: While the company faced brutal market conditions, made even worse by the 2008 recession, it was able to achieve the majority of its long-term goals. The company bought out its minority shareholders, all of whom realized value in excess of what would have been achieved without the strategic planning process and its implementation.
Process Reengineering
PROBLEM: A governmental entity was merging six departments into one. Each department contracted with external service providers to meet many of the county's goals. Management was concerned that the contracting functions were inefficient and that there was no consistent review of contract providers, the contract requirements, the payment methodology, or contract deliverables.
SOLUTION: The existing business processes were mapped and analyzed, the strengths and weaknesses of each process were identified, and a new, single operating model was developed. The process reengineering was designed to improve the speed and quality of the contracting function, reduce contract costs, and improve contract outcomes.
RESULTS: As planned, a dramatic increase in the flow of information through the organization occurred. Knowledge was widely shared, enabling staff and management to adopt the best practices across the organization. Service quality improved and costs were reduced by more than $5.6 million annually.
Project Management
PROBLEM: Senior management adopted the process reengineering recommendations but were concerned that adoption of the new business model would be impeded by the natural tendency to avoid change and revert to established methods. Moreover, management did not believe it had the tools, techniques, and time to implement the new model.
SOLUTION: The implementation of the adopted recommendations was undertaken. The benefits which would accrue to the county employees were clearly articulated to them. A collaborative approach which leveraged the skills and assets of management and staff was utilized.
RESULTS: Twice the needed number of employees volunteered to be part of the implementation project, even though it added to their already demanding workload. The employees embraced the new model and developed a vested interest in its successful outcome. The project was implemented on time and within budget.
Advice and Counsel
PROBLEM: The owner of a business has several senior managers and more than 100 employees reporting to him. The owner must make many sensitive decisions without input from the senior managers and as a result has no one to provide him with objective feedback.
SOLUTION: Meetings and conference calls with the business owner occur on an as-needed basis. Confidential information is freely shared. Projects which either could not be performed internally because of their sensitive nature or could not be performed because the company's staff does not have the necessary skills are completed in a timely manner to meet the business owner's needs.
RESULTS: The business owner has access to an experienced, knowledgeable third-party to discuss and analyze important business issues. The knowledge gained from advising the owner over a long period of time allows for the development of solutions which are both financially meaningful and structurally feasible.