Five Steps for Successful 2014 Business Planning

Transcription

1 Five Steps for Successful 2014 Business Planning Edward Marshall, GM, s Vertical NetSuite Jeanne Urich, Managing Director Performance Insight Edward Marshall General Manager, s Vertical NetSuite Richard Curzi, Vice President, Operations Collaborative Today s Agenda Welcome & Introductions NetSuite Company and Product Overview s Performance Insight Business Planning: Empty Ritual or Catalyst for Growth? Collaborative Business Planning Process Audience Q&A NetSuite: World s #1 Cloud SRP & PSA Background Founded 1998 Publicly traded on NYSE: N $308M+ revenue FY12 Offices in 10 countries 1,700+ employees World s most deployed cloud business suite High Growth 16,000+ organizations #1 provider of cloud SRP & PSA for services organizations Fastest growing top 10 FMS for 3 years - Gartner Used across 100+ countries NetSuite runs global business and PS organization on NetSuite #1 Cloud Business Suite Industry Recognition Fastest Growing Top 10 FMS Vendor 3 rd Year Running Best Financial Management Top 10 Cloud Companies to Watch NetSuite Professional s Automation Solution NetSuite s Resource Planning (SRP) Project management Reporting functionality Key performance indicators Resource management Time & expense tracking Billing & invoicing Sales and marketing Project delivery Financial 1

2 NetSuite PSA / SRP Customers Performance Insight Accelerate Productivity & Profit Business Planning Empty Ritual or Catalyst for Growth? August 28, 2013 Presented by Jeanne Urich Managing Director, Performance Insight All rights reserved. Copyright Not 2013 for distribution. Performance Insight, LLC All Rights Reserved. Not for Distribution. Introduction Business Planning Agenda Jeanne Urich Performance Insight () is a global research, consulting and training organization dedicated to helping professional service organizations (PSOs) make quantum improvements in productivity and profit. In 2007, developed the PS Maturity Model as a strategic planning and management framework. It is now the industryleading performance improvement tool used by over 6,000 service and project-oriented organizations to chart their course to service excellence. The core tenet of the PS Maturity Model is PSOs achieve success through the optimization of five Performance Pillars : 1. Leadership Vision, Strategy and Culture 2. Client Relationships 3. Human Alignment 4. Execution 5. Finance and Operations Business Planning Objectives & Challenges Business Planning Steps Translate into Financial Plan Collaborative provides a unique depth of operating experience combined with unsurpassed analytic capability. We not only diagnose areas for improvement but also provide the business value of change. We then work collaboratively with our clients to create new management processes to transform and ignite performance. Objectives for this Leadership Meeting BUSINESS PLANNING OBJECTIVES & CHALLENGES Establish a strategic foundation for the PS Business Plan Develop a common understanding of our business and opportunity Define success Create a roadmap short term and long term to achieve our goals Identify action plans with appropriate monitoring and measurement Execution is the leader s most important job. 2

3 Planning Challenges Effective Planning Starts with Leadership! Leadership Matters Unclear growth strategy limited differentiation Murky service value proposition Inability to sell value Sales and Marketing challenges Functional Silos Roles, Authority and Handoffs Immature processes and systems Poor quality and client satisfaction Poor financial performance KPI Well understood vision, mission and strategy Lev. 4-5 Lev % Ease of getting things done % Goals and measurements in alignment % Embraces change % Innovation focused % Effective communication % Confidence in PSO's future % Confidence in PS Leadership % EBITDA 23.3% 9.8% 137% Leaders Leaders set the tone Clear Vision & Strategy Clear, measurable plan Clear goals, measurements, communication Step 1 - Build a Shared Vision of Success Vision What we want to be concentrates on the future Mission How we will attain our vision BUSINESS PLANNING FIVE STEPS TO IMPROVED PERFORMANCE Values & Culture Charter Unwritten rules for decision-making and power Statement of purpose & objectives Business Model Who, what, where, when, why Step 2 Business Model Appraisal - Embedded Where are we today? Where will we be in 2017? Step 2 Business Model Appraisal - Independent Where are we today? Where will we be in 2017? Product-Centric -Centric Staffing High Value Product- Centric Product Enablement Product Extension s Lead Custom Solutions Staffing IT Managed s Specialty Management Level 1 Level 2 Level 3 Level 4 Level 5 Product-centric Support s Self- Product Enablement Support s Education Implementation s Product Extension Professional s Migration s Integration s s Lead s Industry Solutions Business Value Analysis Custom Solutions Complex Solutions Vertical & horizontal solutions Management Staffing IT Sales & Recruiting Product Oriented Transactional Implementation Low margin Migrations, Upgrades Low risk Support s Managed s Long term contracts Infrastructure Support Agreements Specialty Management Industry Strategy Competency Transformation Business Process Thought Leading High Impact Your Company Today Your Company Today Your Company 2017 Your Company

4 Step 3 - Assess organizational strengths and weaknesses Step 4 Confront Reality The PS Performance Acceleration Process Characteristics that give us an advantage over others Changes which can lead to new opportunities Characteristics that place us at a disadvantage Challenges which could derail us Current plan Current initiatives Constraints Current operations PS Maturity Model benchmark comparison PS business strengths and weaknesses Systems and processes Unbiased, holistic, diagnostic, prescriptive Leadership alignment Business Model Growth Strategy Uncovers issues & opportunities Current state and change receptivity Based on confidentiality and trust Benchmark comparison Multi-dimensional view Change catalyst Aligns leaders & PS team Fact-based decisions Value-based initiatives PS Maturity Scorecard - -der diagram Step 5 - Develop Strategic Initiatives Finance & Operations Execution Leadership Client Relationships Human Alignment Your Company is being compared to 23 embedded PS within SaaS and 45 embedded PS within Software organizations. Your company is operating at Maturity Level 2 emerging standards, systems and processes are in pilot stage have not been standardized or codified across the organization Pillar Score Level Pts. To Next Level Leadership Client Relationships Human Alignment Execution Finance & Operations Create a fact-based appraisal leading to break-through improvement priorities Vision Mission Values & Culture Charter Business Model Develop Initiatives and Key Performance Measurements in alignment with corporate objectives Step 5 Develop Strategic Initiatives Owner: PS Leadership Team Step 5 - Key Initiative Evaluation Planning Tool Ease, Impact & Cost Initiative Employee Growth & Development Area of Focus Skills database Recruiting & Ramping Career development Success Commitments Metrics to Action SHORT statement Faster recruiting describing the 1. Create database of leading primary objective skills Better retention 2. Candidate profiles Higher bill rates 3. Employee career paths Faster hiring Faster ramping Speed to bill Reduced attrition / higher employee satisfaction Higher bill rates 1. Enhanced recruiting pipeline 2. New hire orientation 3. New hire mentoring 1. Career & skill development plan 2. Targeted training and development Timelines & Owners Nov Jim Smith Dec Bill Adams Jan Roger Simer High IMPACT Packaging KM Employee Survey Comp Plan New PSA New EE Prgm Acct Mgmt Attrition 1 to 3 words that best describe the Copyright Focus 2013 Area Performance Insight Reduce attrition from 12% - 7% Management training Short and specific metrics for measuring success of the Focus Area 1. Implement employee satisfaction program Jan 2013 John Doe 2. Exit interviews Short bullet stating the primary Organization level action that will be completed to accomplish the Focus Area. One short bullet per action Low Complex EASE Simple 4

5 Your Company 2013 Business Plan Drive client satisfaction and new market penetration by delivering quality consulting services profitably Vision Mission Values Charter Business Model We help our customers turn customer service into a competitive weapon Deliberately Innovative Business Communication Transformation s Customers First Quality, Innovation and Integrity in all we do We are one team We work hard, play hard but play to win Direct Functional Model Customer Satisfaction Win Rate PS Revenue PS Profit TRANSLATE BUSINESS PLAN INTO FINANCIAL PLAN Go To Market Business Development Talent Growth & Development Global Expansion Packaging PSA Automation Key Initiative - Business Value Impact Translate business plan into financial plan Use your information infrastructure Key Initiative Success Metrics Assumptions Financial Employee Growth and Development Improve Operations Packaging Reduce recruiting and ramping time from 120 to 50 days Implement new cloud-based PSA Improve utilization 2% (from 68% to 70%) 20% of projects sold as packages Improve project profit margins from 30 to 40% 70 more potential billable days $180/hour bill rate 68% utilization 10 new employees annually 2,000 billable hours /year potential 100 billable employees $180/hour average billable rate Total revenue of $25M $685,440 $720,000 $5M sold as packages $500,000 Total $1,895,440 What are key growth areas? What services offer the highest margins? Who are your best clients? Wins and losses? How does profit compare to industry peers? What does our Income Statement look like, and how can we improve it? Do we have the right people today (and tomorrow)? Do we have the right training in place? Is our attrition rate acceptable? How successful are we in delivering services? Do we have the right resource allocation? What are our project margins? The Benefits of Integrated CRM and PSA PSOs with over 300 employees Year-over-year Change in Headcount 9.2% 17.5% 90% Billable Utilization 72.3% 78.3% 8% On-time Project Delivery 82.2% 88.7% 7% Project Overrun 11.8% 3.5% 70% Performance Insight Accelerate Productivity & Profit Follow us on: Reference Clients 63.8% 80.0% 25% 5

6 Collaborative Overview Collaborative background Founded Founded in 1999 Private Privately held Offices Massachusetts (HQ), New Jersey, New York, Pennsylvania, Texas, Wisconsin Solution centers Massachusetts and Wisconsin (CDSC) Growth rate Consistent year-on-year growth Richard Curzi Vice President, Operations Collaborative 2012 revenue Offices Solution centers Employee based 380+ Senior level resources Expertise 52+ million 20%+ growth Massachusetts (HQ), New Jersey, New York, Pennsylvania, Texas, Wisconsin Massachusetts and Wisconsin Our team Employee based firm: retention of expertise 380+ employees Senior level resources, over 18 years average experience Employees possess deep domain expertise gained from industry & consulting experience Collaborative s NetSuite SRP Solution Set Financial s Life Sciences NetSuite OpenAir PSA since 2004 Information Management Business Process & Program Management Software Solutions NetSuite Financials since January 2013 Converted from QuickBooks NetSuite CRM since May 2013 Converted from SalesForce.com Software Performance & Quality CDSC Strategy Execution Support Collaborative Business Planning Process Annual Forecasting & Budgeting 5-Year Strategy (2012) Vision / Mission / Core Values Goals: Revenue, Margin, Customer Satisfaction, Employee Engagement Where to play Where NOT to play How will we win? Major initiatives Critical success factors management scorecards Heavily supported by data and trends pulled from SRP Annual Forecasting & Budgeting process Pro-forma P&L Statements Heavily supported by data and trends pulled from SRP Monthly / Quarterly Scorecard Reviews Initiatives & KPM s derived from 5-Year and 1-Year plans Results heavily supported by data pulled from SRP Examine past results and trends by business segment Headcount growth Utilization Average Bill Rate Average compensation Seasonal time off Model the coming year Target improvements in KPM s Reflect strategic focus changes NetSuite / Open Air SRP provide easy access to the data 6

7 Revenue Forecast Model Scorecards Collaborative Company-wide Scorecard 2013 Through MMM 2013 Category Weight Goals YTD Status Owner Commentary Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Business Days Headcount NE Delivery Business Hours 26,646 24,176 25,603 26,910 26,928 24,128 26,470 26,488 24,240 28,060 24,560 25,956 PTO % 6.1% 5.0% 3.7% 5.1% 3.6% 4.4% 10.2% 12.0% 5.0% 4.0% 10.0% 16.0% Bench % 13.7% 12.1% 11.3% 10.5% 7.9% 9.5% 11.1% 12.7% 10.0% 10.0% 10.0% 10.0% Billable % 80.2% 82.9% 85.0% 84.4% 88.5% 86.1% 78.7% 75.3% 85.0% 86.0% 80.0% 74.0% Billable Hours 21, ,042 21,763 22,712 23,831 20,774 20,832 19,945 20,604 24,132 19,648 19,207 Average Rate $ $ $ $ $ $ $ $ $ $ $ $ Revenue (DEL $2,796,105 $2,650,742 $2,936,444 $3,212,212 $3,356,874 $2,840,042 $2,820,056 $2,801,340 $2,893,832 $3,474,015 $2,828,551 $2,765,127 Sal) Headcount TS Delivery Business Hours 1,584 1,440 1,411 1,584 1,584 1,328 1,250 1,232 1,280 1,564 1,440 1,596 PTO % 3.6% 6.1% 5.5% 4.0% 5.4% 6.7% 6.0% 11.0% 5.0% 4.0% 10.0% 16.0% Bench % 42.2% 52.8% 47.6% 42.2% 29.1% 20.3% 33.8% 12.0% 10.0% 10.0% 10.0% 10.0% Billable % 54.2% 41.1% 46.9% 53.8% 65.5% 73.0% 60.2% 77.0% 85.0% 86.0% 80.0% 74.0% Billable Hours , ,088 1,345 1,152 1,181 Average Rate $ $ $ $ $ $ $ $ $ $ $ $ Revenue (DEL $106,681 $77,265 $87,669 $109,686 $137,814 $143,545 $114,276 $140,019 $160,589 $180,908 $154,944 $158,850 Sal) Execution 40% Sales Overall $XXmillion Life Sciences - $XXmillion Financial s - $XXmillion Performance Engineering - $XXmillion CDSC - $XX.Xmillion Utilization Delivery Utilization XX% s Utilization XX% Life Sciences Utilization XX% Financial s Utilization XX% CDSC Utilization XX% CDSC Training XX% Average Rates Average Rate Delivery - $XXX Average Rate s & Industry - $XXX Average Rate CDSC - $XXX Overall Gross Margin XX.X% XX/XX/XX (Project/Staff/Outsourcing) Hourly/Contractor Headcount XX% Profitability XX% Initiatives 30% CDSC Expansion - 2nd Site Selection Financial s 5 Year Plan Tri-State Office Expansion Integrated Talent Management Operational Efficiencies - Phase 2 People 25% Scorecards Turnover Percent XX% Performance Reviews - 98% Development Plans - 75% Project Reviews 100% Strategy 5% Implement 5-year Strategy 2013 Plan Meet Goal High odds to meet goal Miss goal Complete Extracts from SRP Support Decisions Date 7/1/2013 Work Schedule Billable Recognized Billable Row Labels Hours Hours Time Off Revenue Headcount PTO % % Bench % Average Rate CDSC Wausau, LLC $437, % 63.2% 29.1% $ Collaborative, LLC $4,625, % 77.0% 13.8% $ Client Mgmt $113, % 67.2% 19.6% $ Delivery $3,260, % 78.8% 12.3% $ Active Contractor Consultant $157, % 99.0% 1.0% $ Active Hourly Consultant $148, % 91.7% 8.3% $ Active Salaried Consultant $2,955, % 77.0% 13.2% $ NE $2,819, % 78.7% 11.1% $ TS $114, % 60.2% 33.8% $ TX $20, % 30.3% 66.7% $ Executive $ % 0.0% 77.3% #DIV/0! Financial s $381, % 77.9% 16.2% $ Life Sciences $140, % 45.6% 45.6% $ Performance Engineering $281, % 79.5% 6.1% $ and Industry Leadership $447, % 85.7% 5.2% $ Grand Total $5,062, % 74.1% 17.0% $ Q&A Contact Us for More Information Ed Marshall General Manager s Vertical emarshall@netsuite.com 7