Profitiviti - Executive Overview

Business Operations Intelligence®
Improving Profitability & Performance
©2010 Profitiviti. All Rights Reserved. This document is for informational purposes only. 1

OVERVIEW

We All Live Busy & Complex Lives

We are doing more with less, but expected to exceed expectations in reducing costs,
less costs
increasing sales and improving operational efficiencies.

To balance all of these moving, yet interconnected parts, senior executives need accurate
information in order to make rapid and confident decisions. But a main problem for most
f f f
executives is gathering that information, even with multi-million dollar IT systems.

The next few slides will discuss…
– Today’s business climate
– Typical questions facing senior executives
– Limitations facing most companies
– How to identify and eliminate wasteful spending while decreasing business risks
– Achieving high return on investment (ROI) and improving execution


BUSINESSS CLIMATE

Uncertainty Rules

Unemployment is high, bankruptcy is rampant, brand loyalty is decreasing, the stock
high rampant decreasing
market fluctuates on a whim, global currencies are volatile, etc., etc., etc.

External factors play a major role in today’s global marketplace, but are your internal
factors, the ones you control, also uncertain?

“Finance executives fear that the deep
Finance
cuts they made in the face of the
“One-third of American workers say they
economic crisis are not without
will look for new jobs once the economy
consequences: 46% say they have taken
gets better. 48% of those who plan to job
actions since the beginning of the
hunt are mainly motivated by a loss of
recession that they believe could reduce
trust in their employers.”
their company's long-term growth
prospects.” - Harris Interactive Poll
- CFO.com


EXECUTIVE QUESTIONS

Improving Execution Relates to People, Processes & Spending

PEOPLE
– Do you have the right people with the right skills working on the right things?
– Can your current employees take you to the future?
– Do you have leaders who can grow in scope and scale?
– Who
Wh are your low performers, what do the cost and which functions are they impacting?
l f h d h d hi h f i h i i ?

PROCESSES
– Are your most critical processes efficient, measured and assigned to an accountable leader?
– Which business processes impact your revenue and growth?
– What do your businesses processes cost and which costs can be removed?
– How is ROI defined and can you track it back to your financials?

SPENDING
– Is your spending enabling your strategy or is it based on historical allocations?
– How do you identify the biggest cost reduction opportunities?
– Which costs can be easily removed and re-allocated to growth initiatives?
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– Are your strategic and customer facing functions adequately resourced and funded?


INTERNAL LIMITATIONS

Lack of Knowledge & Capabilities

As a senior executive, you are juggling a lot of things – at times everything seems to be a
executive times,
priority. You need a way to know which opportunities are the most urgent, which ones can
help mitigate business risks and which ones provide the biggest ROI.

Continuous improvement of a company is difficult for a variety of reasons: limited skill
f ff f f
sets, limited tools, limited knowledge and very little free time.

That’s not in my job
My team is maxed out. If
f description. Plus, my
you want that done, I boss sets my priorities.
This is great, but it’s I.T. said it’ll take
need more people.
not what I asked for. 90-days. What
now?


IMPROVE DECISION-MAKING

Improvement is About Identifying & Eliminating Inefficiencies

Every business regardless of size, complexity or industry exists through the execution of
size
business processes. High-performing organizations focus on proactive and continuous
improvement of their people, processes and spending.

Our theories:
1) People execute processes which are enabled by systems and spending
2) Every person is working on something and every dollar spent is enabling something
3) Quantifying business value improves decision-making

Simple, Intuitive Steps Outcomes
– Identify a list of business processes – Robust cost model with the ability to conduct
– Align people to processes scenario based “what-if” analysis
– Align department budgets to processes
– Align capital expenditures to processes – Ability to analyze your organization the way it
– Align some COGS spending to processes really operates, through business processes
– Analyze cost structures, margins, resources
– Prioritize improvement projects – Proactive approach to reduce costs, improve
pp p
margins, decrease resource risks and increase
– Track improvement ROI back to financials operational efficiencies


FLEXIBILE & ACCURATE APPROACH

Validate Your Gut-Feelings & Minimize Second-Guessing

Some of the main benefits of our framework are that it s flexible, accurate and intuitive.
it’s flexible intuitive

Profitiviti is built for business leaders, not software engineers or statisticians. Our
number one goal is to provide insight about your business by identifying improvement
opportunities, so ultimately you can increase your profitability and productivity.
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WHAT YOU DO NEED WHAT YOU DON’T NEED
• Simple business data • No IT integration
• A web browser • No server space
• No capital spending
• No IT Requirements Documents
• No IT Change Requests
• No need to build error-prone
Excel files


RESULTS

Our Clients Are Averaging 500% ROI in Less Than 6 Months

Our approach is effective. It’s forward-thinking. It’s proactive. It provides a quantitative
effective It s forward thinking It s proactive
analysis regarding opportunities to couple with your gut-feelings. Our approach allows
you to make confident decisions on business improvements. Our approach allows you to
easily trend critical information over time and track ROI back to your financial statements.

Companies don’t operate department by department, so why analyze people,
processes and spending that way?

Our analysis enables executives to gain immediate insights into:
– The strategic drivers of the business;
– The processes and functions that have the greatest impact on revenue;
– The products/services that deliver the most p
p profit;
– Sources of high cost and what can be reduced or eliminated;
– The highest performing resources and what they are contributing;
– The lowest performing resources, what they cost and what they are impacting.


PROFITIVITI

Our Difference
Profitiviti is a trusted partner for many C-Suite executives, Private Equity investors, Business Turnaround
experts and O
t d Operational Excellence specialists across several i d t i b
ti lE ll i li t l industries because we deliver results.
d li lt
Our decades of business improvement experience coupled with our industry leading tools, allow us to
deliver critical business insight faster, cheaper and more accurately than our competition.

Our Competition
O C titi Profitiviti
P fiti iti
Conducting Rapid Potentially a service in a suite of offerings This is our core focus and expertise
Operational Assessments
Time Typical engagements last a couple months Average engagement is completed in
a few short weeks
(Many companies charge you to build Microsoft
Excel and Access models from scratch. These (Our technology is proven, ready to go, completely
models are rarely left behind for your review or transparent and available for your internal use, if
ongoing usage and can contain many errors.) desired for ongoing tracking and improvement)

Cost $$$ to $$$$$ $$
Deliverable Typically a PowerPoint presentation with A PowerPoint deck, of course, plus, a live
recommendations for next steps and a analysis of where the improvement
Statement of Work to help you implement opportunities exist along with training for your
Phase 2 internal resources on how to conduct your own
improvement analysis going forward


CONTACT INFORMATION

Profitiviti
5000 Birch Street
West Tower Suite 3000
Tower,
Newport Beach, CA USA 92660
949-260-2029
www.profitiviti.com
p

Steve Raack
310-259-1248
310 259 1248 mobile
sraack@profitiviti.com

Profitiviti Provides a Trusted & Accurate External Perspective


Appendix
More Details on Our Framework

A PROVEN FRAMEWORK

Leverage Experience and Put Success on Your Side
Our Process-Based-Costing™ framework integrates the best practices of several proven
g g p p
methodologies. We create critical connections between strategy, structure, skills and
profitability.

Activity‐ Operational
Process‐Based‐
Costing = Based‐
Costing
+ Strategy + Excellence
(People & Process)

Align Costs to Better Improve Decision- Put Your Customers
Understand Margins Making with First and Continuously
and Profitability Focused Investments Improve Through
Skilled People and
Accountability


FLEXIBILE & ACCURATE APPROACH

Analyze Your Business Through Simple, Visual Reporting

One of the main benefits of our framework is it’s ease of use Profitiviti is built for
it s use.
business leaders, not software engineers. We require no IT integration, no server space,
no capital spending – it’s activated within hours and you only need a web browser. And,
business data is never an issue. We use information which exists in every company.

Pre-Configured Reports
– Over 40 reports are available , all designed to lead you to answers
– Every report is easily filtered for drill down capabilities and comparisons
– Trending reports are available to monitor changes/improvements over time and track ROI

Ad-Hoc Reporting
– No IT Change Requests or Requirements documentation are needed
– No database knowledge is needed; just drag-and-drop fields as desired

There is no need to spend weeks creating Microsoft Excel models which may contain
errors and can cause major headaches when conducting trending analysis. Be confident
j g g y
with your analysis and minimize any second-guessing.


EXAMPLE REPORT

Process Costs Cross Departments & Locations

OVERVIEW
– Each bar represents the total spending for
each category of Business Processes
– The colors indicate what type of spending
is enabling those Business Processes

HIGH-LEVEL ANALYSIS
– In this example:
– Manage Information Technology
and Manage Corporate Legal are
the two most expensive f
h i functions
i
– Large GL Account costs (e.g.,
Department spending) like
these are areas for review
– Manage Corporate Legal
signals a major area of
i l j f
concern given its total cost
– Capital expenditures are mostly
allocated to improve Supply Chain
Business Processes
– This correlates to the
h l h
company’s strategic goals for
stronger global systems

EXAMPLE REPORT

Identify, Quantify & Eliminate Wasteful Spending

OVERVIEW
– Each Bubble is a Business Process within
the organization or division
– The size of the Bubble is relative to the
cost of that Business Process
– LLarge B bbl represent cost
Bubbles
reduction or re-allocation
opportunities
– Using simple report filters, rapid analysis
can be conducted by Location, by Business
Process, by General L d
P b G l Ledger AAccount t
and/or by Department

HIGH-LEVEL ANALYSIS
– Two eye-opening areas emerged
which were previously unknown from
an internal cost perspective
– Manage Change Control =
$9.9 Million USD
– Manage Lawsuits =
$24.8 Million USD


EXAMPLE REPORT

Improve Execution: Right People, Right Skills, Right Roles

OVERVIEW
– In addition to analyzing overall Business
Process costs, this view highlights what
kind of resources are working in which
areas of your company
– This report can utilize any two Resource
attributes you want to analyze (e.g.,
performance review ratings, talent
management ratings, years to retirement,
required certifications)

HIGH-LEVEL ANALYSIS
– Only 12% of the resources are
working on Growth related Business
Processes
– In total, 95 resources are rated as
low-performers and cost the
company around $14 Million USD
in Labor & Benefits annually
– 13 l low-performers are working on
f ki
Growth related Business Processes


Profitiviti - Executive Overview

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