Operational process transformation for a mid-sized IT services Company resulting in significant improvement in profitability and growth

Posted On 2024-06-12

Author Gautam Tarkunde

Background

A mid-sized IT services company felt the need for better decision-making regarding pricing and integrating its revenue forecast with manpower recruitment plan. It faced challenges in growing due to either higher bench costs or loss of business due to unavailability of resources. CFO Bridge was approached to design right metrics for evaluating profitability at customer and project level, set benchmarks and goals to enable timely and better decision making for pricing and investment in practices.

Observations and Approach 

An IT Services industry expert from CFOB, worked with stakeholders and leadership over 3 months to establish the framework and implement the following initiatives
  • Customer & project level profitability framework (including metrics definition) - designed and implemented to draw actionable insights with root cause for the projects performing below benchmarks.
  • Established Sales Forecast Gap Analysis (Risk assessment framework) to assess risks to the Projected Sales vis-à-vis Sales Order Book and Sales Pipeline.
  • Established Models to focus on Cost optimization using benchmarks and segregating cost spend as vital, essential, and desirable to build a cost avoidance approach.
  • Developed Leadership and Sales Performance Measurement Metrics Model, thereby ensuring greater transparency and accountability.

    Handheld the company in implementing these frameworks and practices over the next 3 months.

    Impact

    • The team was empowered with best practices, tools, and various levers for improving top line and margins; the company was given a detailed road map to improve margins by 5% - 10% progressively over the next 18-24 months. 
    • Ideas to increase billable hours were eye-openers, resulted in immediate value to the client.
    • Cost avoidance measures were implemented.

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