Below are examples of PCM real life projects that demonstrate the challenges faced, our approach and most importantly, the tangible results.
Below are examples of PCM real life projects that demonstrate the challenges faced, our approach and most importantly, the tangible results.
Recent changes in financial services regulation, consolidation of dealer groups and a highly competitive environment has not only put pressure on financial adviser earnings, but also resale value of practices. A prominent Australian Financial Services Dealer Group appointed PCM to Performance Benchmark and develop Dashboard Reporting, in an effort to grow profitability and add tangible value for proprietors. An intangible product, a healthy desire for market share and exhaustive industry criteria set the challenge for adding value.
Financial services has typically been a data rich, knowledge poor industry, when reviewing adviser and dealer group profitability. Although operating platforms within dealer groups tend to be consistent, the consistency and quality of source can vary significantly.
For most financial planning practices, there is at best, a high level view of client and service profitability. In many cases, the true profit contribution of specific client profiles and/or service offers are not known.
PCM’s challenge was to introduce best practice Activity Based Costing principles, so that the actual profit contribution and long term value of individual clients and services, for each practice, could be derived. Then apply these insights, combined with dealer group benchmarks, to refine client mix, service levels and pricing.
PCM invested time to fully understand the functions of several financial practices within the group, focusing on both client facing and back off functions. Activities and time required were allocated on a client profile and functional basis, so that the true Costs to Serve could be derived, for individual clients, for each interaction.
A full Performance Benchmark was then undertaken, with a 90+% participation rate. Profitability and operational performance were benchmarked, taking into account differences in practice and client profiles. Practices were then assessed and ranked by key performance area, with specific opportunities and their profit impact documented for each practice.
Dashboard Reporting was developed, to enable real time performance benchmarking, trends and achievement of pre-defined targets. Investible wealth, benchmarked with ABS and industry databases, was also reported, to define the true market share of a practice within a given catchment.
Over $4.6M per annum in genuine upside opportunities were identified, based on performance variations within the Dealer Group, in areas that could be directly influenced by proprietors.
Corporately, more than $3.0M per annum in additional Dealer Group income was highlighted, based on improved market share of investible wealth.
Performance Dashboard Reporting, integrated with existing information systems, delivered timely and valuable business insights. The need for labour intensive collation and analysis of data from disparate systems was also removed, saving approximately 3.5 FTE’s, or around $400k per annum.
One of Australia’s largest contracting firms, operating across a range of sectors – including construction, mining and infrastructure – experienced project overruns, which significantly eroded contributions from profitable projects. When investigated, there was a ‘disconnect’ between granular reporting and forward estimates used in project reviews. Or in other words, a failure to transform project data into the insights required for informed decision making.
Furthermore, changes to forecasts, including approved variations and claims, from one period to the next, made consolidated reporting to senior management highly variable and in some cases, unreliable.
With the impact of one poor performing project offsetting the earnings of six to eight profitable projects, there was an urgent need to identify and address profit leakage within projects / contracts early in their life cycle.
PCM were required to review existing project reporting and validate the drivers of project profitability, taking into account the unique circumstances of each contract, initial estimates and approved variations.
Specifically, PCM were engaged to :
The key challenge was for PCM to develop a customised program for the early detection and prevention of profit leakage in projects / contracts. A program that could be implemented with existing resources, systems and internal capability – without business disruption.
PCM invested time to fully understand the fundamentals of project / contract profitability within the business, based on available information, reporting, policies and work practices. Then Benchmarked each stage with known industry best practices.
Based on this initial assessment, PCM focused on Profit Leakage Points, by project / contract, in the following areas :
Once identified, Performance Dashboard reporting was developed, with focus on early detection of risks, incremental profit opportunities and accurate forecasting.
For a portfolio in excess of $5.4 billion work in hand, just over 30% of all projects (based on revenue) were found to have a high risk of profit leakage. This equated to approximately $26M in avoidable losses, associated with delays, variations, contractual obligations and scope changes.
The analysis of current projects / contracts, combined with on-demand Performance Dashboard reporting also initiated improvements in KPIs, project reporting and post implementation reviews.
Based on the 12 month period after PCM’s engagement, profit leakage (avoidable losses) have fallen by around 17%, when reviewed on a like-for-like basis. In other words, $4.4M in validated benefits have been secured, as a direct result of program initiatives.
For one leading real estate group, the combined impact of technology, competition and an increasingly educated market put significant pressure on agency margins. Whilst these challenges were industry wide, the group wanted to leverage knowledge from within, to adapt and prosper in a disruptive environment.
PCM were engaged to work collaboratively with agents to identify, validate and initiate tactical program to grow profitability at an individual agency level – consistent with the group’s strategic objectives.
To identify and help capture incremental profit opportunities, by leveraging behaviours and business practices of high performers within the group – with a view of lifting the bar for the entire group, to grow profit contribution and agency value.
Internal resources, supported by external consultants had been used in the past for similar initiatives, but had failed to gain traction, for lasting improvement. Furthermore, the profitability of some business units were in decline, as a result of declining revenue streams and increased operating costs.
The business required a proven framework that :
Captured successful best practices in an internal database to drive continuous improvement.
PCM worked collaboratively with key stakeholders in the business, to confirm specific profit and cost drivers, as well as establish firm KPIs based on industry (performance) benchmarks.
Existing information was used to Benchmark revenue, operating efficiency and cost control metrics – then establish specific profit upside opportunities within each business unit and division (including residential, commercial, sales and property management)
Areas of specific Profit Leakage were identified, along with probable causes and in some cases, recommended corrective actions. Priorities, specific actions and timeframes were then agreed at a corporate, business unit and individual level.
Dashboard reporting, leveraging available data, was put in place to help drive the implementation program. Management reporting (on demand) was developed to track the relative success of agreed initiatives.
Successful initiatives that generated incremental profits were documented and stored in a Best Practice Database, to be shared and refined within the group.
Incremental Profit Opportunities in the vicinity of $6M – $8M per annum, were identified within the group. Quick wins, driven by improvements in business practices and policies represented approximately 70% of the total upside.
Over 350 specific upside actions were identified. Of which, nearly 80% commenced within the first 90 days of the implementation program.
After six (6) months, in excess of $2.5M (per annum) incremental profit contribution had been captured and validated using Dashboard and standard financial reporting.
Recent changes in financial services regulation, consolidation of dealer groups and a highly competitive environment has not only put pressure on financial adviser earnings, but also resale value of practices. A prominent Australian Financial Services Dealer Group appointed PCM to Performance Benchmark and develop Dashboard Reporting, in an effort to grow profitability and add tangible value for proprietors. An intangible product, a healthy desire for market share and exhaustive industry criteria set the challenge for adding value.
Financial services has typically been a data rich, knowledge poor industry, when reviewing adviser and dealer group profitability. Although operating platforms within dealer groups tend to be consistent, the consistency and quality of source can vary significantly.
For most financial planning practices, there is at best, a high level view of client and service profitability. In many cases, the true profit contribution of specific client profiles and/or service offers are not known.
PCM’s challenge was to introduce best practice Activity Based Costing principles, so that the actual profit contribution and long term value of individual clients and services, for each practice, could be derived. Then apply these insights, combined with dealer group benchmarks, to refine client mix, service levels and pricing.
PCM invested time to fully understand the functions of several financial practices within the group, focusing on both client facing and back off functions. Activities and time required were allocated on a client profile and functional basis, so that the true Costs to Serve could be derived, for individual clients, for each interaction.
A full Performance Benchmark was then undertaken, with a 90+% participation rate. Profitability and operational performance were benchmarked, taking into account differences in practice and client profiles. Practices were then assessed and ranked by key performance area, with specific opportunities and their profit impact documented for each practice.
Dashboard Reporting was developed, to enable real time performance benchmarking, trends and achievement of pre-defined targets. Investible wealth, benchmarked with ABS and industry databases, was also reported, to define the true market share of a practice within a given catchment.
Over $4.6M per annum in genuine upside opportunities were identified, based on performance variations within the Dealer Group, in areas that could be directly influenced by proprietors.
Corporately, more than $3.0M per annum in additional Dealer Group income was highlighted, based on improved market share of investible wealth.
Performance Dashboard Reporting, integrated with existing information systems, delivered timely and valuable business insights. The need for labour intensive collation and analysis of data from disparate systems was also removed, saving approximately 3.5 FTE’s, or around $400k per annum.
One of Australia’s largest contracting firms, operating across a range of sectors – including construction, mining and infrastructure – experienced project overruns, which significantly eroded contributions from profitable projects. When investigated, there was a ‘disconnect’ between granular reporting and forward estimates used in project reviews. Or in other words, a failure to transform project data into the insights required for informed decision making.
Furthermore, changes to forecasts, including approved variations and claims, from one period to the next, made consolidated reporting to senior management highly variable and in some cases, unreliable.
With the impact of one poor performing project offsetting the earnings of six to eight profitable projects, there was an urgent need to identify and address profit leakage within projects / contracts early in their life cycle.
PCM were required to review existing project reporting and validate the drivers of project profitability, taking into account the unique circumstances of each contract, initial estimates and approved variations.
Specifically, PCM were engaged to :
The key challenge was for PCM to develop a customised program for the early detection and prevention of profit leakage in projects / contracts. A program that could be implemented with existing resources, systems and internal capability – without business disruption.
PCM invested time to fully understand the fundamentals of project / contract profitability within the business, based on available information, reporting, policies and work practices. Then Benchmarked each stage with known industry best practices.
Based on this initial assessment, PCM focused on Profit Leakage Points, by project / contract, in the following areas :
Once identified, Performance Dashboard reporting was developed, with focus on early detection of risks, incremental profit opportunities and accurate forecasting.
For a portfolio in excess of $5.4 billion work in hand, just over 30% of all projects (based on revenue) were found to have a high risk of profit leakage. This equated to approximately $26M in avoidable losses, associated with delays, variations, contractual obligations and scope changes.
The analysis of current projects / contracts, combined with on-demand Performance Dashboard reporting also initiated improvements in KPIs, project reporting and post implementation reviews.
Based on the 12 month period after PCM’s engagement, profit leakage (avoidable losses) have fallen by around 17%, when reviewed on a like-for-like basis. In other words, $4.4M in validated benefits have been secured, as a direct result of program initiatives.
For one leading real estate group, the combined impact of technology, competition and an increasingly educated market put significant pressure on agency margins. Whilst these challenges were industry wide, the group wanted to leverage knowledge from within, to adapt and prosper in a disruptive environment.
PCM were engaged to work collaboratively with agents to identify, validate and initiate tactical program to grow profitability at an individual agency level – consistent with the group’s strategic objectives.
To identify and help capture incremental profit opportunities, by leveraging behaviours and business practices of high performers within the group – with a view of lifting the bar for the entire group, to grow profit contribution and agency value.
Internal resources, supported by external consultants had been used in the past for similar initiatives, but had failed to gain traction, for lasting improvement. Furthermore, the profitability of some business units were in decline, as a result of declining revenue streams and increased operating costs.
The business required a proven framework that :
Captured successful best practices in an internal database to drive continuous improvement.
PCM worked collaboratively with key stakeholders in the business, to confirm specific profit and cost drivers, as well as establish firm KPIs based on industry (performance) benchmarks.
Existing information was used to Benchmark revenue, operating efficiency and cost control metrics – then establish specific profit upside opportunities within each business unit and division (including residential, commercial, sales and property management)
Areas of specific Profit Leakage were identified, along with probable causes and in some cases, recommended corrective actions. Priorities, specific actions and timeframes were then agreed at a corporate, business unit and individual level.
Dashboard reporting, leveraging available data, was put in place to help drive the implementation program. Management reporting (on demand) was developed to track the relative success of agreed initiatives.
Successful initiatives that generated incremental profits were documented and stored in a Best Practice Database, to be shared and refined within the group.
Incremental Profit Opportunities in the vicinity of $6M – $8M per annum, were identified within the group. Quick wins, driven by improvements in business practices and policies represented approximately 70% of the total upside.
Over 350 specific upside actions were identified. Of which, nearly 80% commenced within the first 90 days of the implementation program.
After six (6) months, in excess of $2.5M (per annum) incremental profit contribution had been captured and validated using Dashboard and standard financial reporting.
