Success Stories • The Calculation Bar

The Missing Piece

Our engagement led to tangible and immediate financial improvement for our client and their third-party reseller.

Our client’s legacy partnership agreement with a third-party reseller had lost steam over several years; it ‘muddled along’ as the program’s intimate details faded. The company’s staff neither championed the program’s growth, nor analyzed its potentially poor profitability.

We were asked by the new CEO to engage and justify terminating the program. Two facts emerged quickly. First, the program was not a total loss, but produced margins slightly below the overall company margins. Second, we discovered a fair amount of revenue leakage – the finance team’s reports were not capturing a substantial piece of data that would increase revenues (and margins) substantially. We presented two scenarios: actual analysis from the past two years, and pro forma analysis that included the non-utilized data.

Our engagement led to tangible and immediate financial improvement – increased cash with no additional investment – for both the company and partner alike. We positively redirected a CEO towards a better decision. The completed review improved dialogue and set clearer expectations with the reseller.

Additionally, the project was engaging, and our team made connections that still exist today. We look forward to finding similar improvements for all Calculation Bar clients.

Sorting Through the Options

We de-complicated decision making in a critical, complex situation.

Our client faced a competitive situation that required a substantial re-design of its product. Market reports suggested market share loss to a new competitor’s leading edge design. Thus, the current product needed an overhaul.

But the endless redesign possibilities were daunting. We helped by engaging with the product management team to create a ‘plug n play’ financial model of the capital project. Over the course of several weeks, the model provided different designs and scenarios that would immediately provide a complete overview, including total costs, time to market, time to re-tool operations, and estimated revenue results.

This planning tool enabled the product design team to create 25 different scenarios, which were whittled down to three and presented to the Board with a clear favorite option. The Board approved the design concept.

The engagement enabled the Product Management VP to provide structure to the team and understand possible outcomes along multiple axes. It also provided credibility to discuss in-depth details of the project with the Board, which enabled fast and confident decision making.

Creating Expectations and Driving Performance

We segmented and consolidated financial performance management to support our client’s growth initiatives.

A Midwest client wanted to expand its footprint in the Minneapolis-St. Paul area, but needed to ensure they could self-fund their growth. While the company had an accounting manager, the ledger system architecture did not enable team-level spend analysis nor revenue segmentation by channel or facility.

The CEO asked The Calculation Bar to implement several analytic-related initiatives, including the formulation of a first-time, full-scope financial budget. After a series of short but targeted conversations with key staff, we established a wireframe design to segment revenue channels and partition operating activities and costs. A cost center structure and improved accounting hierarchy was quickly established, to first quantify each team’s operating metrics and financial impact, then consolidate (combine) into company-wide metrics, financial statements and expected cash usage.

After a few iterations, the CEO could grasp the key expectations, including revenue, staff hours, and financial outcomes. The company could generate excess cash to fund the growth initiatives. The project created a performance management tool, propelled data-driven decisions and instilled confidence to expand.