How a high-performance, data-driven culture transformation helped a software company improve its results by 40%
Transformative data-driven culture improves software company’s results by 40%, cutting working capital needs by 35%. Framework for project evaluation, budgeting, and liquidity forecasting leads to pricing policy redefinition.
The Story
SOFTWARE SA develops custom software applications and web sites. It utilizes an in-house team and a network of external partners to implement its projects. Although the company has seen its turnover annually increase by 25% in recent years, its net results do not follow the same pattern and it is clear that in several cases the company undertakes projects that end up not being profitable.
As the owners of the company saw significant prospects for the further increase of the company’s turnover, they asked us to help them to be able to do so in an way that affect the company’s results accordingly.
As the owners of the company saw significant prospects for the further increase of the company’s turnover, they asked us to help them to be able to do so in an way that affect the company’s results accordingly.
OUR APPROACH
How we worked
In order to boost the company’s performance, we analyzed the way projects are budgeted, priced and evaluated. At the same time, we reviewed the operating expenses and analyzed the evolution of the company’s working capital.
As a result, we proposed a framework for evaluating projects’ profitability, budgeting and reporting, but also a model for monitoring and forecasting liquidity, so that the company can safely anticipate its needs over a six-month horizon.
Adopting the above elements as an operating philosophy, but also as a top-down decision-making tool, the company redefined its pricing policy and the way it selects the projects it undertakes, significantly improving its profitability, while reducing its working capital needs.
As a result, we proposed a framework for evaluating projects’ profitability, budgeting and reporting, but also a model for monitoring and forecasting liquidity, so that the company can safely anticipate its needs over a six-month horizon.
Adopting the above elements as an operating philosophy, but also as a top-down decision-making tool, the company redefined its pricing policy and the way it selects the projects it undertakes, significantly improving its profitability, while reducing its working capital needs.
* We take the confidentiality of our customers seriously. While we have changed their names, the results are real.
IMPACT
Less, but more profitable customers
30%
increase in gross profit margin
17%
increase in average sales per customer
35%
decrease in working capital needs
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How a high-performance, data-driven culture transformation helped a software company improve its results by 40%
Transformative data-driven culture improves software company's results by 40%, cutting working capital needs by 35%. Framework for project evaluation, budgeting, and liquidity forecasting leads to pricing policy redefinition.
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