Business Rationalisation

Corporate Head Office costs reduced permanently ...through a rigorous review and process improvement programme. The Challenge This UK based group had slowly built up a large and expensive head office. Head office costs had not been subject to the same regular scrutiny as subsidiary company overhead costs. The total corporate cost was now representing a large proportion of annual profits. The Solution Worked closely with senior corporate management, and other interested parties, to understand corporate expenditures in terms of their drivers. Explained that corporate centres usually have in substance three distinctive functions: (1) Parenting, ie providing direction to subsidiaries with the objective of enhancing business value, (2) Compliance and Governance, ie ensuring operation within laws and regulations, and (3) Services to Subsidiaries, which could alternatively be outsourced or provided by the subsidiaries themselves. This insight identified those activities which were not adding value to these three functions. The analysis facilitated a rational debate about the cost of these functions and how they could be more effectively resourced. . The Result Reduced costs and improved effectiveness of head office function. “This cost reduction programme has both improved our bottom line and brought clarity to which activities carried out by head office are of true value. We are now committed to regular scrutiny of head office costs using this process” – Finance Director

Projected benefits delivered in full from cross-border business reorganisation ...facilitated by robust financial planning process. The Challenge A division of a major plc, consisting of 9 geographically diverse manufacturing companies each separately serving the international aerospace market, had sensibly committed to re-organise into 5 global market-orientated Business Units. The timescales and complex organisational issues were such that meticulous and workable plans were vital to ensure successful implementation of the reorganisation. Failure was not an option. The Solution Engaging the support of all senior management, a financial planning process, dovetailed into the detailed business reorganisation plans, was designed and implemented that ensured delivery of the projected benefits by keeping these “at the centre of the radar”. Fundamental to the planning process was the experience required to anticipate all of the very complex short and medium term implications of such a major business reorganisation. This crucially required close dialogues with the relevant managers, and also capturing the inevitable incremental changes thereto as plans became reality. The Result The re-organisation was achieved to the agreed timescales and delivered the expected significant benefits. “This was a very challenging, but necessary, project. There were many difficult issues to resolve along the way including HR, accounting, tax, “turf wars”, and the building of a new plant. However, the financial focus and discipline was crucial, in that we never lost sight of the required financial outcomes in terms of efficiencies and reduced costs going forward” – CEO of Global Business Unit