Business Turnaround Tip for a Successful MBO Turned Awry

When you acquire a company through an MBO, your hopes are always high. You know the business more than anyone else and you’ve got too much at stake to do a sloppy job. So how could things go wrong? Well sometimes they do. And if you don’t make a quick business turnaround, you could end up losing more than just your company.

If that management buyout was financed by a bank, then chances are you were required to invest a sizeable amount from your own pockets. I won’t be surprised if you even remortgaged your house for it.

Regardless of your source of funding, whether it was a bank, a venture capitalist or through a deferred consideration, the mere thought of losing your job and getting buried in enormous debt at the same time might be too much to bear. If you get too overwhelmed by your emotions and can’t think clearly, you’ll have to step out of the driver?s seat and have someone take over.

That someone can’t be a member of the management team that took part in the management buyout. Like you, he/she might be in panic mode as well. You need someone from the outside who has no emotional attachments to the company and hence can view the crisis from a clear perspective.

Here’s what’s needed:

Review and Plan

Take a closer look at all factors affecting your business: governance and organisational structures, employees, suppliers, systems and procedures, roles and responsibilities, etc. Identify potential risks and assess the likelihood of them affecting your business.

This will give a clearer picture of cause-and-effect relationships as well as the specific tasks on hand.

Thus, when it is time to draft a plan, you can do so from a well-informed standpoint. This will enable you to target specific areas of improvement and avoid pointless activities.

Assure all stakeholders

Once a watertight plan has been formulated, you will have to approach your stakeholders. They?ll need to know what your directions are. Once they’re all sold on the plan, you could implement our strategies unimpeded.

This is a very crucial part because a sceptical stakeholder can serve as a major stumbling block in our efforts to improve the situation. You need to convince your banks, sponsors, and investors in order to avoid additional financial obstacles. You need to convince your suppliers too. If they cut off or limit supply, you won’t be able to continue doing business.

Most of all, you need to persuade your staff and employees that the proposed major changes have to be carried out in order for the company to survive. You can’t run your operations without them on board.

Redesign and set up new systems and procedures

Any company requiring a turnaround will certainly have systems and procedures that are no longer working well in the current conditions and hence would require either major changes in key areas or a total revamp. You need to study personnel roles and responsibilities as well as systems and processes, including financial and IT systems, and supervise the implementation of necessary changes.

You will need to evaluate your existing IT architecture and determine how you can best maximise what you already have and propose what you think will work more efficiently for our proposed systems and procedures. Every piece of hardware or software recommended will take into consideration your present resources. There are many solutions out there, you just need to find the best fit.

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IT Security and the Threats from Within

When the economy makes a downturn, companies, then eventually, employees suffer. Now, I’m sure you’re wary of frustrated laid-off employees stealing valuable data. Who knows? That information might end up in the hands of your competitors. Then as if that threat weren’t enough, there may be jobless IT specialists who turn to rogue activities either to earn a quick buck or simply out of lack of anything productive to do.

That’s not all, as we’ve got more news for you. When we think of IT Security, what instantly comes to mind are hackers and acts laced with mal-intent. However, a recent worldwide survey on IT security showed organisations were more inclined to expect data leakage as a result of accidental exposure by employees (45%) than of anything maliciously performed by an external entity (15%).

If you’re not aware of this, you’ll be focusing your spending on protection against incoming attacks while exposing your innards through accidental leakages. Our solution? While we’ll naturally provide your data with protection from outside threats, we’ll also put special attention in protecting it from the inside.

The defences we’ll put up include:

Data Loss Prevention
Network Security
Firewalls
Malware
Authentication and Access Control
Mobile Security
Forensics

Succeed at Transformation

Despite the pomp and fanfare associated with launching corporate transformation programs, in reality very few of them succeed. According to a recent report by McKinsey the success rate is pegged below 40%. In addition, the same research indicates that defensive transformations – those undertaken as part of crisis management – have lower chances of success than progressive ones – those launched to streamline operations and foster growth. However, adopting certain strategies, like setting clear and high goals, and maintaining energy and engagement throughout the implementation phase, can really boost the project’s success rate. A key aspect of business transformation is IT transformation. This can be attributed to the fact that significant business change is either driven or influenced by technological change.

So what is IT Transformation?

IT transformation is basically a holistic reorganisation of the existing technological infrastructure that supports the company’s mission critical functions. In essence, IT transformation is not all about effecting change for the sake of change but involves systematic steps that align IT systems to business functions. To appreciate this approach, it is important to explore current trends in the business world where human resource, finance and IT transformations are being carried out in unison. This is being done to develop strong corporate centres that are leaner, agile and more productive that enhance greater synergies across all business functions.

IT transformation inevitably results in major changes of the information system’s technology, involving both hardware and software components of the system, the architecture of the system, the manner in which data is structured or accessed, IT control and command governance, and the components supporting the system. From this scope of works it is evident that IT transformation is a huge project that requires proper planning and implementation in order to succeed.

Tips to Improve Success in IT transformations Projects

1. Focus on Benefits not Functionality

The project plan should be more focused on benefits that can be accrued if the system is implemented successfully rather than system functionality. The benefits should be in line with business goals, for instance cost reduction and value addition. The emphasis should be on the envisaged benefits which are defined and outlined during the project authorisation. The business benefits outlined should be clear, feasible, compelling and quantifiable. Measures should be put in place to ensure that the benefits are clearly linked to the new system functionality.

2. Adopt a Multiple Release Approach

Typically most IT projects are planned with focus on a big launch date set in years to come. This approach is highly favoured because it simplifies stakeholder expectation management and avoids the complexity associated with multiple incremental releases. However, this approach misses the benefit of getting early critical feedback on functioning of the system. In addition, the long lead times often result in changes in project scope and loss of critical team members and stakeholders. IT transformation projects should be planned to deliver discrete portions of functionality in several releases. The benefit of multiple release approach is that it reduces project risks and most importantly allows earlier lessons learnt to be incorporated in future releases.

3. Capacity of the Organisation to confront Change

As pointed out, IT transformations result in significant changes in business operations and functions. Hence it is important that all business stakeholders should be reading from the same script in regards to changes expected. In addition, key stakeholders should be involved in crucial project stages and their feedback incorporated to ensure that the system is not only functional but business focused.

How Energy Management Software Benefits Your Business

We’re in an era of price volatility in gas and electricity prices, coupled with greater scrutiny on the environmental impact of businesses in their day-to-day operations. According to the Department of Energy & Climate Change, the average SME can slash its energy bill by 18-25% simply by installing energy efficiency solutions in their facility.

Are you looking to improve energy use in your business? Prevent wastage, track consumption, identify opportunities to save on energy and reduce your carbon footprint while at it? It can be a daunting process to do it all manually. Taking those meter readings, preparing spreadsheets and combing through quotes and energy bills to validate them – this is not something you should be enduring in this day and age. Not when there are dedicated systems built for the task. That’s where Energy Management Software (EMS) comes in.

Importance Of Energy Management Software

Wasted energy = Wasted money

Failing to improve energy efficiency is costing SMEs loads of funds, with it coming to between £5,801 and £12,109 of missed annual savings for individual businesses. These are 18% – 24% of their energy costs. Where do you stand?

Take timers and thermostats for instance. When not properly set and controlled, or even simply forgetting to turn them down when not in the room, it can easily lead to unnecessary costs. How often do your staff forget to turn off the air conditioning when they leave the meeting rooms? Do you account for weekends or bank holidays when setting the controls of the AC? Mistakes like turning the temperature high on the thermostat to “quickly warm the room” are common, yet heating costs go up by about 8% with every 1°C rise.

There are installations that you can make to minimize wastage. For example, the Chinese Contemporary Arts Centre in Manchester is able to save £4,363 annually just by having a £100 timer installed to its heating system.

Some energy saving measures won’t even cost you a penny. For instance, did you know that you can save up to 30% of your heating costs simply by preventing cold air from entering the building? This means not keeping the doors just open for convenience. So how can you find points of weakness and areas of improvements in your facility? Install an EMS.

While businesses vary from one industry to the next, energy management basically boils down to:

Metering systems where the consumption is recorded
Determining how much energy can be saved by identifying opportunities for this
Implementing policies and changing existing systems to take advantage of these opportunities
Tracking progress after the improvements have been made

Benefits Of EMS For Your Business

Data Acquisition – Where accuracy and reliability matters

Energy data comes from different angles and formats. From the building automation systems and IoT devices that have been set up, bills sent in by the utility company to the spreadsheets needed to analyse them – what if you had it all from one point of reference? The EMS gives you a “bird’s eye view” of all your energy data from one interface. It collects the data from any system – and being cloud-based, is accessible from anywhere in the world.

The ecoVaro data loggers can be connected with the Wi-Fi network of the facility or function independently, depending on your specific requirements. They monitor readings 24/7, retaining the data even when they have been powered off. The end-to-end encryption assures you of the security of the information that is being obtained.

Integrating the EMS into the existing systems will simplify the data collection process, and even for the cases where there isn’t a direct method transferring the data into the system, the setup wizards that come with the EMS allow you to prepare the required data and import it.

Data Analysis: From consumption, energy leaks to areas of improvement

The first step is accurately collecting the data. The next step is making sense of it. The analysis modules with the EMS allow you to monitor the energy consumption of the facility in real-time.

The energy data is displayed in engaging graphics that are easy to understand at a glance. The dashboard setup, with its customised layout, enables you to monitor the performance of the specific information you want, toggling through usage and savings data, to the meters and sites that are being tracked. With the ecoVaro Energy Management Software, you get Consumption Charts, Regression Charts, Cusum Charts and Heatmaps right to the submeter level. This information can be broken down into 15-minute durations, with the daily, weekly and monthly consumption reports.

Getting everyone on board

Making changes to company-wide energy policies needs to have the different parties on board – from the energy manager in charge of crunching the numbers and presenting the information, the CFO of the business, the staff running day-to-day operations, all through to plant operators for those in industries. An easy mode of communication is needed, that will be understood and availed in reports that can be shared with the relevant parties in the organization. The graphical displays that come with the EMS enable actionable information to be displayed in a simplified manner – that way all members of the business or organization will be able to comprehend it.

Meet your Energy Goals

The baseline that is created in the EMS is used as a standard when assessing the impact of future changes to the energy consumption. Using the information that has been obtained, the management can set up energy saving policies and implement changes, and track KPIs (key performance indicators) along the way. For instance, the market research company DJS Research installed a timer switch that turns off their two water coolers when they aren’t in use. This action saves them £144 annually, and had already paid for itself within 35 days.

You will be in a position to assess the actions that provide your business with the best ROI over time, monitoring the progress and verifying the savings from one central dashboard. Cutting costs here will enable you to divert the funds to other areas of your business, including promotions, marketing, and product development.

For businesses in the energy sector- including electric, oil and gas plants, they specifically need carbon emission reports, to pinpoint areas where the building’s energy efficiency can be improved. ecoVaro EMS allows you to set alarms and KPIs in the facility for issues to be identified and resolved immediately they crop up.

Turn to ecoVaro

EMS systems are used across the board – from optimising energy use in hotel rooms and hospitals, mapping out usage patterns for those in the agriculture and supply chain niches, running facilities for utility providers, all through to increasing the efficiency of equipment operation for business in the food and beverage sector. Want to learn how you can cut down your energy bills and make your business more eco-friendly? EcoVaro’s team is ready to get you started.