Boosting Accounting System to Increase Revenues

Boosting Accounting System to Increase Revenues

The Consulting Playbook, Edition #27 Welcome to our new series, the Consulting Playbook, a collection of posts designed to offer insights into how businesses and their executives can utilize consulting as a strategic lever to boost performance. Each Consulting Playbook post is broken down into a few elements: Case Study, Additional Information regarding the technical application, and Additional Links related to the topic. Boosting Accounting System to Increase Revenues and Enable Funding for an Aerospace Start-up A new company focused on providing advanced manufacturing capabilities to aviation engine production companies needed to improve accounting systems and obtain startup capital. The company opted to use consultant’s help to develop financial accountability systems compliant with financing organizations oversight requirements, and to assist them with large negotiations related to the start-up funding. Assessing the System in Place First an assessment of the current accounting system capabilities was carried out. A thorough understanding of the additional reporting systems had to be made, and to figure out what was needed to meet the financing requirements. Subsequently – the options for off-the-shelf solutions were further evaluated. Findings on ROI and capabilities were presented to the CEO for approval. The unsuccessful off-the-shelf solutions that failed to bring in sufficient ROI had to be revised, and a new customized solution was requested by the CEO. An additional Excel reporting system was set up, using output from the accounting system which made it easier for users. The project’s closure consisted of standard work on how to interact with the Excel based project cost analysis system. The Successfully Adopted New Methods Brought in Results The Consulting project managed to deliver great benefits to the company where both accounting and reporting financial systems enabled a macro and a micro level financial analysis for each of their projects. The company also received several million dollars in startup funding. Additional Information – The Importance of Accounting Software & Systems in Boosting Efficiency and ROI Choosing the best Accounting systems and processes that fit your organization’s needs, and regularly looking for updates, should be a priority for today’s businesses. Here are some important features and issues to consider when evaluating the current Accounting program and methods:

  1. Always be updated on the latest federal regulations demanding greater transparency and disclosure. You cannot afford to bypass these.
  2. With the right accounting software your business will accelerate most of its operations, including better accuracy and reporting.
  3. The power to collect and assimilate high-quality, up-to-date information, and send it to the right people at the right time gives your company a valuable, incalculable advantage in this era of regulatory scrutiny of financial statements.
  4. Upgrading your current system will undoubtedly result in better ROI when done correctly. This is a driving factor for majority of organizations. A new Accounting system typically will pay for itself within few years after implemented.
  5. To ensure higher ROI, you need to consider the following: the software and systems are tailored specifically to your industry; to the size of your company; the more functions you can delegate to it such as billing, human resource, etc., the less data inaccuracies will be, and your overall operations will be closer to a complete data integration.
  6. Centralizing the company’s structure by incorporating more branches and departments into a single system, will save you a huge amount of time and money.

  For Further Reading:

How a Merger Achieved Synergy in the Product Development Process

How a Merger Achieved Synergy in the Product Development Process

The Consulting Playbook, Edition #11

 

Welcome to our new series, the Consulting Playbook, a collection of posts designed to offer insights into how businesses and their executives can utilize consulting as a strategic lever to boost performance. Each Consulting Playbook post is broken down into a few elements: Case Study, Additional Information regarding the technical application, and Additional Links related to the topic.

 

How a Merger Achieved Synergy in the Product Development Process

One of the leading Aerospace and Defense companies undertook a major transformation when a merger of several companies took place. To ensure the successful integration, the Head of Integration needed help. The main priorities of the company were secure: Integration of the overall organization, Increase Corporate Performance, and Enable efficiency and collaboration on all levels.

To speed up and facilitate the process, they requested external support in the definition and application of a new Product Development Process reference that would allow a proper alignment on through a backbone process of the company.

 

A 3-Step Approach to Deliver the Desired Results

The Consultant focused their efforts on building a collaborative environment and helping all parties understand the process with the application of stage gates and dedicated development phases.

A Multi-Step Approach was applied to achieve the desired objectives:

  • Definition of the development timeframe, with specific sequence in stage gates
  • Synchronization of the development, design and delivery of key components and systems
  • Implementation of collaborative approaches to manage concurrent development, product lifecycle and interdependencies.
  • Review the main criteria to determine each stage gate adjustments to the sub-processes to achieve the expected performance (lead time, reliability, etc.) through multiple sub-projects involving experts of all legacy companies.

 

This new approach was implemented on the new strategic project from the company embarking employees from all legacy companies in the journey.

Beneficial Impact of the Consultancy, Following the Merger

The successful completion of the project, to the client’s satisfaction, achieved the following:

  1. The new Product Development Process accomplished reduction of development lead times, more effective and realistic expectations, better collaboration of various teams
  2. Improved planning and management of development programs in collaboration with functions
  3. An overall cost reduction of 20% vs. previous similar projects.

 

Additional Information –

New Product Development in 4 Simple Stages

Companies and entrepreneurs often feel the need to introduce new products. And depending on the industry you are in; the process might be less or quite complex. But without new products, extension line of existing products and innovation, it is tough to stay competitive, relevant and profitable in the long run. As technology constantly evolves, so are customers’ needs.

Let’s look at a typical new product development stages and what is the most efficient way to proceed with new product idea.

  1. Generation and Evaluation of Product Ideas

To greenlight an idea, it’s best to have a few brainstorm sessions with your team, and the people whose decisions and opinions matter, decide on the best idea, then go to the next stage. Your new product ideas can come from a variety of sources such as: your employees, your boss, competitors, and even customers. Evaluate carefully the pros and cons of each idea, and then decide on the feasibility of pursuing it. It’s estimated that a third of new product ideas originate from users and customers. At this initial stage, often a niche market research is required, to get a deeper understanding of the potential of the new product idea.

  1. Testing

The journey of the great new idea to the market, continues with development of a Product concept. Once you have this ready, you can test the sample with consumers and team members, capture their reactions and make further adjustments as necessary. After the testing is completed and the product features finalized, the new product can scale up into production.

  1. Customized Marketing Strategy

Even the greatest product can fail without a well-planned marketing strategy and sufficient support to promote it. The marketing strategy typically will consist of: identification of the target market and demographics, branding and positioning, sales and market share projections for the first one or two years. It’s essential to also identify the main distribution channels, pricing, marketing budget, and profit goals.

  1. Mass production and Commercialization of the New product

With the marketing strategy set, and the Business analysis completed, the Management team will decide on the next and final stage – commercialization of the new product. The cost of manufacturing, marketing and advertising of a new product, can be quite high, so the Management should consider all the factors like timing, region, logistics, important events, etc, for the official launch and initial distribution of the new product.

Since for many companies, time is of the essence, a new and more flexible approach is being introduced: close collaboration and simultaneous development of the new product by the parties involved, to complete it and launch sooner.

Saving time and money is always a winning proposition to businesses and customers alike when developing new products.

 

For Further Reading:

Introducing Process Management as an Integration Accelerator Following a Merger

Introducing Process Management as an Integration Accelerator Following a Merger

The Consulting Playbook, Edition #9

 

Welcome to our new series, the Consulting Playbook, a collection of posts designed to offer insights into how businesses and their executives can utilize consulting as a strategic lever to boost performance. Each Consulting Playbook post is broken down into a few elements: Case Study, Additional Information regarding the technical application, and Additional Links related to the topic.

 

Introducing Process Management as an Integration Accelerator Following a Merger

The COO of a Leading Aerospace company asked for an expert’s help as the organization was in the middle of a major transformation, following the merger of four national companies. Evaluating all the complexities of the merger, the expert planned to direct the process toward the top 3 goals:

  1. Ensuring the Overall Company’s Integration
  2. Improving Corporate Performance
  3. Increase Efficiency and Collaboration on all levels

 

How the Transformation Unfolded

The Consultant’s early efforts focused on creating a buy-in of the concept and identifying how process owners could be empowered in their impact (creating accountabilities, budgets, and aligned incentive system). It was decided to start with a few pilot processes.

The next step aimed at building alignment for the process management with the senior leadership team, and driving awareness throughout the entire organization. A four-stage approach was designed to deliver on the objectives as following:

  • Robust Architecture created for all the processes from domains, to major processes and general processes
  • Well-defined roles and responsibilities for all the participants (process owners, process operators, process quality assurance…)
  • Detailed methodology of the process management including process maturity gates, and cost/effort planning
  • Pilot projects for some processes considered to be critical (configuration management, and design)
  • Communications/change platform that included branding, executive and general policies, awareness toolkits, training, change “boosters”, articles and newsletters, and a process management handbook distributed.
  • The Project Team supported by the Consultant leveraged by the hands-on support to the priority processes/owners identified, with detailed reporting to a subset of the Executive Committee
  • End-to-End Process management was introduced to efficiently manage the whole business and connect all the functions.

 

 Solid Cost Savings and Employee Satisfaction and Engagement

 

The integrated process management approach is a continuous effort given the complexities of the client’s merger efforts and their products, however the early outcomes and results can be summarized as following:

For the Organization

  • Accelerated integration as all parties are now using standardized definitions and a harmonized process building based on the best practices of all legacy companies with new digital practices added
  • Total estimated cost savings of €1 B total (efficiency gains, reduced development lead times with first time improvements, tools standardization) with €300 K total reached after one year.

For their Employees

  • Increased collaboration and visibility, multiple interfaces with others
  • More clarity within job activities and deliverables definition
  • Positive impact on Engagement Survey results

 

Additional Information –

 

Top New Trends and Their Influence on the Aerospace Industry

 

The sky is the limit figuratively speaking for the growing Aerospace sector of the past few years. But along with the raising demand for air travel, huge backlog of new aircraft orders, and projected revenues for the major players, there is an increased focus on profitability too.

The latest trends that will influence the near-term results are:

1st. Technological Advance

The way aircrafts are designed, built and look like, is always evolving, and we are witnessing great improvements in cabin design, noise reduction, together with top notch avionics’ tools and components. The advanced manufacturing technology requirements and conversion to new electrical systems are also changing how aircrafts are manufactured, inducing change and bringing new challenges across the whole production cycle trying to keep up with the OEMs (original equipment manufacturer).

2nd. Increase in Replacement Demand

As airline fleets age, and aircrafts wear out, especially in mature markets, the need to update and modernize the fleet, is more pressing than ever.

With fuel efficiency and technologically advanced aircrafts, are being held as priority features, as many airlines are placing new orders. Over the next two decades the trend will continue.

3rd. Lower Oil Prices Affecting Growth and Demand

The lower oil prices have successfully influenced airlines’ profits, but aircraft manufacturers might be concerned with slowing replacement demand specifically short term too. Lower oil prices often can translate into lower fares and savings for the travelers resulting in higher air traffic, and at the same time the long term projections, are less concerned with current oil prices, and are considerably less optimistic.

 

For Further Reading:

Which States are Attracting Aerospace Companies?

2016 Aerospace and Defense Industry Trends

2016 – World’s Top 10 Commercial Aerospace Companies

The Top 10 Best Practices of Business Process Management

Best Practices in Business Process Management