Client A Global Advertising Technology Business
Service Operational Review
& Remediation
Result 300% Revenue Growth
Background
The client was a technology business that supports the advertising industry with distribution and asset management services. The centre of their Latin American operations was in Miami with sales driven from their satellite offices in São Paulo, Brazil and Buenos Aires, Argentina.
The Miami regional office had been a successful start-up, managing international TV delivery throughout Latin America and servicing the Hispanic market in the USA.
Our client's strategy had been to roll out local distribution operations progressively to each of the countries in South America each of which were emerging markets for their services. However, after a strong start, the business had faltered and lacked sustained growth and profitability.
Our client's strategy had been to roll out local distribution operations progressively to each of the countries in South America each of which were emerging markets for their services. However, after a strong start, the business had faltered and lacked sustained growth and profitability.
Challenge
The client's head office in London sought our advice on their geographic expansion and our recommendations into why performance had slowed. They wanted to know whether the business should be
expanded, maintained or wound down.
The Miami office had not delivered on its target of 25% year-on-year growth. The P&L was showing a loss of $200k per month and operationally the office was failing in its service commitments. The business needed a plan to secure continued geographic expansion whilst containing the costs of any new operations.
The Miami office had not delivered on its target of 25% year-on-year growth. The P&L was showing a loss of $200k per month and operationally the office was failing in its service commitments. The business needed a plan to secure continued geographic expansion whilst containing the costs of any new operations.
Approach
Our approach was to place ourselves on site
to develop insights into the day-to-day operations in Miami and how it was serving the existing satellite offices in Brazil and Argentina. We exposed ourselves to every aspect of the
sales, customer service and support processes and analysed team productivity.
We discovered that the problem was partly the operational structure and partly that the business was still effectively operating in start-up mode and had not been equipped to service the business it had delivered.
Our solution was to review and revise the processes and operational structure with only a moderate increase in investment. Our recommendation was to fully equip the business for the next stage in its growth and indeed to expand it as a regional 'Centre of Excellence' for the Americas.
We discovered that the problem was partly the operational structure and partly that the business was still effectively operating in start-up mode and had not been equipped to service the business it had delivered.
Our solution was to review and revise the processes and operational structure with only a moderate increase in investment. Our recommendation was to fully equip the business for the next stage in its growth and indeed to expand it as a regional 'Centre of Excellence' for the Americas.
Result
Our review of the P&L solved a
discrepancy where the costs associated with the South American sales offices were being applied to Miami but the revenue was reported locally. This resolved the reporting discrepancy proving that the business was much healthier than the client had assumed.
We uncovered 10% in annual revenue leakage which we solved by developing new processes to ensure that all services and products were billed accurately. Our implementation of these processes revealed that Miami could operate at 20% EBITDA.
We uncovered 10% in annual revenue leakage which we solved by developing new processes to ensure that all services and products were billed accurately. Our implementation of these processes revealed that Miami could operate at 20% EBITDA.
Our strategic review revealed that the client had failed to
tailor an implementation strategy for the individual markets within South America.
We outlined cultural and operational differences across the region and built a roll out plan that prioritised each market by value. This provided our client with a framework to invest in their South American business development appropriately and to minimize risk by linking new expenses with secured sales. This 'secure' revenue would be sourced from pan-regional clients already held by the business.
We outlined cultural and operational differences across the region and built a roll out plan that prioritised each market by value. This provided our client with a framework to invest in their South American business development appropriately and to minimize risk by linking new expenses with secured sales. This 'secure' revenue would be sourced from pan-regional clients already held by the business.
Our structural review revealed a need to revise the operational structure. The business was still
being managed as a start-up and needed the processes of a more mature business.
We proposed a new structure within an expanded business that would act as a regional 'centre of excellence' for the Americas. This met the client's growth objectives while negating the need to set up costly operations in each country state.
The Miami office now operates as our client's model for their regional operations globally. Miami now services all their requirements within the USA, Canada and Latin America. It has doubled its staff and tripled its
revenue with planned growth to support an ambitious new USA business case of $30M per annum by
2016.
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Post by James Douglas
What we have learned developing global operations in India, SE Asia and Europe are captured in more detail the following articles:
