Five Steps for Successful 2014 Business Planning · Five Steps for Successful 2014 Business Planning Edward Marshall, ... to WatchBest Financial Management ... NetSuite Professional

9/13/2013

1

Five Steps for Successful 2014

Business Planning

Edward Marshall, GM, Services Vertical

NetSuite

Jeanne Urich, Managing Director

Service Performance Insight

Richard Curzi, Vice President, Operations

Collaborative Consulting

Edward Marshall

General Manager, Services Vertical

NetSuite

Today’s Agenda

Welcome & Introductions

NetSuite – Company and Product Overview

Services Performance Insight – Business Planning: Empty

Ritual or Catalyst for Growth?

Collaborative Consulting – Business Planning Process

Audience Q&A

NetSuite: World’s #1 Cloud SRP & PSA

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

Top 10 Cloud Companies to Watch

#1 Cloud Business Suite Industry Recognition

Background High Growth

Best Financial Management

Fastest Growing Top 10 FMS Vendor

3rd Year Running

Founded 1998

Publicly traded on NYSE: “N”

$308M+ revenue FY12

Offices in 10 countries

1,700+ employees

World’s most deployed cloud business suite

NetSuite Professional Services Automation Solution

Project

management

Resource

management Time &

expense

tracking

Billing &

invoicing

Reporting

functionality

NetSuite Services Resource Planning (SRP)

Key performance indicators

Sales and

marketing

Project

delivery Financial

9/13/2013

2

NetSuite PSA / SRP Customers

www.spiresearch.com SPISPI

ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital

Copyright © 2013 Service Performance Insight

All rights reserved. Not for distribution.

Business Planning

Empty Ritual or Catalyst for Growth?

SPISPIResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital

Service Performance Insight Accelerate Service Productivity & Profit

Copyright © 2013 Service Performance Insight, LLC All Rights Reserved. Not for Distribution.

August 28, 2013

Presented by

Jeanne Urich Managing Director, Service Performance Insight


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Introduction

Service Performance Insight (SPI) is a global research, consulting and training organization dedicated to helping professional service organizations (PSOs) make quantum improvements in productivity and profit. In 2007, SPI developed the PS Maturity Model™ as a strategic planning and management framework. It is now the industry -leading 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 Service Performance Pillars™:

1. Leadership – Vision, Strategy and Culture

2. Client Relationships

3. Human Capital Alignment

4. Service Execution

5. Finance and Operations

SPI 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.


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Business Planning Agenda – Jeanne Urich

Business Planning Objectives & Challenges

Business Planning Steps

Translate into Financial Plan



ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



BUSINESS PLANNING OBJECTIVES &

CHALLENGES


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Objectives for this Leadership Meeting…

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.”

9/13/2013

3


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Planning Challenges

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


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Effective Planning Starts with Leadership! Leadership Matters

KPI Lev.

4-5

Lev.

1-3 ▲

Well understood vision,

mission and strategy 4.37 3.66 19%

Ease of getting things done 4.20 3.59 17%

Goals and measurements in

alignment 4.33 3.40 27%

Embraces change 4.20 3.67 14%

Innovation focused 4.13 3.52 17%

Effective communication 4.04 3.45 17%

Confidence in PSO's future 4.59 3.63 26%

Confidence in PS Leadership 4.57 3.88 18%

EBITDA 23.3% 9.8% 137%

Leaders

Leaders set the tone

Clear Vision &

Strategy

Clear, measurable

plan

Clear goals,

measurements,

communication


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



BUSINESS PLANNING – FIVE STEPS TO

IMPROVED PERFORMANCE


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



What we want to be – concentrates on the future

How we will attain our vision

Unwritten rules for decision-making and power

Statement of purpose & objectives

Who, what, where, when, why

Step 1 - Build a Shared Vision of Success

Vision

Mission

Values & Culture

Charter

Business Model


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Step 2 – Business Model Appraisal - Embedded Where are we today? Where will we be in 2017?

Product-Centric Service-Centric

Product-centric • Support Services

• Self-Service

Product-

Centric

Level 1

Product Enablement • Support Services

• Education

• Implementation

Services

Product

Enablement

Level 2

Product Extension • Professional Services

• Migration Services

• Integration Services

Product

Extension

Level 3

Services Lead • Consulting Services

• Industry Solutions

• Business Value

Analysis

Services

Lead

Level 4

Custom Solutions • Complex Solutions

• Vertical & horizontal

solutions

• Management Consulting

Custom

Solutions

Level 5

Your Company – Today

Your Company – 2017


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Step 2 – Business Model Appraisal - Independent Where are we today? Where will we be in 2017?

Staffing High Value Consulting

Staffing • Sales & Recruiting

• Transactional

• Low margin

• Low risk

Staffing

IT Consulting • Product Oriented

• Implementation

• Migrations, Upgrades

• Support Services

IT

Consulting

Managed Services • Long term contracts

• Infrastructure

• Support Agreements

Managed

Services

Specialty Consulting • Industry

• Competency

• Business Process

Specialty

Consulting

Management Consulting • Strategy

• Transformation

• Thought Leading

• High Impact

Management

Consulting

Your Company – Today

Your Company – 2017

9/13/2013

4


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Step 3 - Assess organizational strengths and

weaknesses

Characteristics that give us

an advantage over others

Characteristics that place us

at a disadvantage

Changes which can lead to

new opportunities

Challenges which could derail

us


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Step 4 – Confront Reality The PS Performance Acceleration™ Process

Current plan

Current initiatives

Constraints

Current operations

Leadership alignment

Business Model – Growth Strategy

Uncovers issues & opportunities

Current state and change receptivity

Based on confidentiality and trust

PS Maturity Model™ benchmark

comparison

PS business strengths and weaknesses

Systems and processes

Unbiased, holistic, diagnostic, prescriptive Benchmark comparison

Multi-dimensional view

Change catalyst

Aligns leaders & PS team

Fact-based decisions

Value-based initiatives


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



PS Maturity™ Scorecard - SPI-der diagram

0

1

2

3

4

5 Leadership

ClientRelationships

Human CapitalAlignment

ServiceExecution

Finance &Operations

Pillar Score Level Pts. To Next Level

Leadership 39.4 2 3.4

Client Relationships 33.3 2 1.9

Human Capital Alignment 43.1 3 2.4

Service Execution 36.8 3 6.7

Finance & Operations 38.4 2 1.3

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


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Step 5 - Develop Strategic Initiatives

Develop Initiatives and Key Performance Measurements

in alignment with corporate objectives

Vision

Mission

Values & Culture

Charter

Business Model

Create a fact-based appraisal leading to break-through improvement priorities


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Step 5 – Develop Strategic Initiatives Owner: PS Leadership Team

Initiative Area of

Focus

Success

Metrics

Commitments

to Action

Timelines

& Owners

Employee

Growth &

Development

Skills

database

• Faster recruiting

• Better retention

• Higher bill rates

1. Create database of leading

skills

2. Candidate profiles

3. Employee career paths

Nov. 2012

Jim Smith

Recruiting &

Ramping

• Faster hiring

• Faster ramping

• Speed to bill

1. Enhanced recruiting pipeline

2. New hire orientation

3. New hire mentoring

Dec. 2012

Bill Adams

Career

development

• Reduced attrition / higher

employee satisfaction

• Higher bill rates

1. Career & skill development plan

2. Targeted training and

development

Jan. 2013

Roger Simer

Attrition

• Reduce attrition from 12%

- 7%

• Management training

1. Implement employee

satisfaction program

2. Exit interviews

Jan 2013

John Doe

SHORT statement describing the primary objective

1 to 3 words that best describe the Focus Area

Short and specific metrics for measuring success of the Focus Area

Short bullet stating the primary “Organization” level action that will be completed to accomplish the Focus Area. One short bullet per action


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Step 5 - Key Initiative Evaluation Planning Tool Ease, Impact & Cost

IMPACT

Low

High

EASE Complex Simple

Service

Packaging

KM New EE

Prgm

New

PSA

Comp

Plan

Acct

Mgmt

Employee

Survey

9/13/2013

5


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Your Company 2013 Business Plan

Vision

Mission

Values

Charter

Business Model

Talent Growth

& Development

KPIs

Global

Expansion

KPIs

Service

Packaging

KPIs

PSA

Automation

KPIs

Go To Market

Business

Development

KPIs

We help our customers turn customer service into a competitive weapon

Deliberately Innovative Business Communication Transformation Services

• Customers First

• Quality, Innovation and Integrity in all we do

• We are one team

• We work hard, play hard but play to win

Drive client satisfaction and new

market penetration by delivering

quality consulting services

profitably

Direct Functional Model

• Customer Satisfaction

• Win Rate

• PS Revenue

• PS Profit


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



TRANSLATE BUSINESS PLAN INTO

FINANCIAL PLAN


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Key Initiative - Business Value Impact

Key Initiative Success Metrics Assumptions Financial

Employee Growth

and Development

• Reduce recruiting and ramping

time from 120 to 50 days

• 70 more potential billable days

• $180/hour bill rate

• 68% utilization

• 10 new employees annually

$685,440

Improve

Operations

• Implement new cloud-based PSA

• Improve utilization 2% (from 68%

to 70%)

• 2,000 billable hours /year

potential

• 100 billable employees

• $180/hour average billable rate

$720,000

Service

Packaging

• 20% of projects sold as packages

• Improve project profit margins

from 30 to 40%

• Total revenue of $25M

• $5M sold as packages

$500,000

Total $1,895,440


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



Translate business plan into financial plan Use your information infrastructure

What are key growth

areas?

What services offer the

highest margins?

Who are your best

clients?

Wins and losses?

Do we have the right

people today (and

tomorrow)?


training in place?

Is our attrition rate

acceptable?

How does profit

compare to industry

peers?

What does our Income

Statement look like, and

how can we improve it?

How successful are we

in delivering services?


resource allocation?

What are our project

margins?


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



The Benefits of Integrated CRM and PSA PSOs with over 300 employees

Billable Utilization 72.3% 78.3% 8%

Project Overrun 11.8% 3.5% 70%

82.2% On-time Project Delivery 88.7% 7%

Reference Clients 63.8% 80.0% 25%

Year-over-year Change

in Headcount 9.2% 17.5% 90%


ResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital



SPISPIResearchResearch

People

People

Pro

cess

Pro

cess

CapitalCapital

Service Performance Insight®

Accelerate Service Productivity & Profit™

www.spiresearch.com

Follow us on:

9/13/2013

6

Richard Curzi

Vice President, Operations


Collaborative Consulting Overview

Offices Solution centers

Massachusetts (HQ), New Jersey, New York, Pennsylvania, Texas, Wisconsin

Massachusetts and Wisconsin (CDSC)

Our team

Collaborative background

Founded in 1999 Founded

Privately held Private

Consistent year-on-year growth Growth rate

52+ million – 20%+ growth 2012 revenue

Massachusetts (HQ), New Jersey, New York, Pennsylvania, Texas, Wisconsin

Offices

Massachusetts and Wisconsin Solution centers

Employee based firm: retention of expertise

Employee based

380+ employees 380+

Senior level resources, over 18 years average experience

Senior level resources

Employees possess deep domain expertise gained from industry &

consulting experience Expertise

Collaborative Consulting Services

Financial Services Life Sciences

Business Process

& Program

Management

Software

Solutions

Software

Performance

& Quality

Information

Management

Consulting CDSC

Strategy Execution Support

NetSuite SRP Solution Set

NetSuite OpenAir PSA since 2004

NetSuite Financials since January 2013

– Converted from QuickBooks

NetSuite CRM since May 2013

– Converted from SalesForce.com

Collaborative Business Planning Process

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

Annual Forecasting & Budgeting

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

9/13/2013

7

Revenue Forecast Model

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 22 20 21 22 22 20 22 22 20 23 20 21 Headcount NE Delivery 151.4 151.1 152.4 152.9 153.0 150.8 150.4 150.5 151.5 152.5 153.5 154.5 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 21,370.41 20,042 21,763 22,712 23,831 20,774 20,832 19,945 20,604 24,132 19,648 19,207 Average Rate $ 130.84 $ 132.26 $ 134.93 $ 141.43 $ 140.86 $ 136.71 $ 135.37 $ 140.45 $ 140.45 $ 143.96 $ 143.96 $ 143.96 Revenue (DEL Sal) $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

Headcount TS Delivery 9.0 9.0 8.4 9.0 9.0 8.3 7.1 7.0 8.0 8.5 9.0 9.5 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 859 592 662 852 1,038 969 752 949 1,088 1,345 1,152 1,181 Average Rate $ 124.26 $ 130.55 $ 132.46 $ 128.71 $ 132.83 $ 148.07 $ 151.91 $ 147.60 $ 147.60 $ 134.50 $ 134.50 $ 134.50 Revenue (DEL Sal) $106,681 $77,265 $87,669 $109,686 $137,814 $143,545 $114,276 $140,019 $160,589 $180,908 $154,944 $158,850

Scorecards

Through MMM 2013

Category Weight Goals YTD Status Owner Commentary

Execution 40% Sales

Overall $XXmillion

Life Sciences - $XXmillion

Financial Services - $XXmillion

Performance Engineering - $XXmillion

CDSC - $XX.Xmillion

Utilization

Delivery Utilization XX%

Services Utilization XX%

Life Sciences Utilization XX%

Financial Services Utilization XX%

CDSC Utilization XX%

CDSC Training XX%

Average Rates

Average Rate Delivery - $XXX

Average Rate Services & 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 Services 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

Collaborative Company-wide

Scorecard 2013

Extracts from SRP Support Decisions

Date 7/1/2013

Row Labels

Work

Schedule

Hours

Billable

Hours Time Off

Recognized

Revenue Headcount PTO %

Billable

% Bench % Average Rate

CDSC Wausau, LLC 11120 7029.5 858.5 $437,840.24 63.2 7.7% 63.2% 29.1% 62.29$

Collaborative Consulting, LLC 41774 32174.75 3819.5 $4,625,145.19 237.4 9.1% 77.0% 13.8% 143.75$

Client Service Mgmt 842 566 111 $113,555.00 4.8 13.2% 67.2% 19.6% 200.63$

Delivery 31632 24937.75 2789.5 $3,260,196.34 179.7 8.8% 78.8% 12.3% 130.73$

Active Contractor Consultant 1264 1251 0 $157,070.50 7.2 0.0% 99.0% 1.0% 125.56$

Active Hourly Consultant 2120 1943.5 0 $148,106.55 12.0 0.0% 91.7% 8.3% 76.21$

Active Salaried Consultant 28248 21743.25 2789.5 $2,955,019.29 160.5 9.9% 77.0% 13.2% 135.91$

NE 26464 20827.75 2698 $2,819,358.89 150.4 10.2% 78.7% 11.1% 135.37$

TS 1256 755.5 75.5 $114,770.80 7.1 6.0% 60.2% 33.8% 151.91$

TX 528 160 16 $20,889.60 3.0 3.0% 30.3% 66.7% 130.56$

Executive 352 0 80 $0.00 2.0 22.7% 0.0% 77.3% #DIV/0!

Financial Services 2432 1893.5 144 $381,642.23 13.8 5.9% 77.9% 16.2% 201.55$

Life Sciences 1696 774 148 $140,164.04 9.6 8.7% 45.6% 45.6% 181.09$

Performance Engineering 2088 1661 300 $281,854.28 11.9 14.4% 79.5% 6.1% 169.69$

Service and Industry Leadership 2732 2342.5 247 $447,733.30 15.5 9.0% 85.7% 5.2% 191.13$

Grand Total 52894 39204.25 4678 $5,062,985.43 300.5 8.8% 74.1% 17.0% 129.14$

Q&A

Contact Us for More Information

Ed Marshall

General Manager

Services Vertical

617-351-0266

[email protected]

Documents

Five Steps for Successful 2014 Business Planning · Five Steps for Successful 2014 Business Planning Edward Marshall, ... to WatchBest Financial Management ... NetSuite Professional