DHI

Sourcing and Zero Based Budgeting savings fund pricing work and fuel broader transformation

Inside Consulting delivered for me once again. They were instrumental in reshaping DHI’s cost structure and they provided critical insights for our product strategy and our pricing structure.- Art Zeile | CEO

Situation:

  • DHI Global appointed a new CEO, Art Zeile- former Hosting CEO and Inside Consulting client, following a period of margin and stock price decline.
  • Inside Consulting was asked to conduct a comprehensive outside spend reduction effort to enable cost structure reform and transformational reinvestment.

Insights and actions:

  • Analysis revealed marketing spend had grown disproportionately, with questionable ROI and resource allocation.  Inside Consulting led a zero-based budgeting effort to reallocate the $20M marketing budget based on quantitative and qualitative drivers.  The effort resulted in net savings of $5M/yr and significant re-allocation across target segments and marketing mix.
  • Several key supplier relationships were ripe for re-evaluation, given significant change in the provider landscape.  Following detailed demonstrations and structured sourcing events, Inside Consulting negotiated new contracts, saving 23% on average.
  • Analysis of customer churn trends revealed opportunity to increase revenue retention by revamping selected professional services offerings’ components and bundling.  Inside Consulting worked with DHI Sales Operations to define new bundles and conduct pilots.  Enhanced services attach-rates resulted in higher revenue retention in target segments.
  • We discovered widespread revenue leakage in a key product line- due to confusion between Sales & Operations.  Further, there was inconsistency in overall discounting levels across accounts.  Inside Consulting developed a new pricing structure that offered customers clear incentives to increase volumes, removed revenue leakage issues, and improved price realization in those accounts where DHI was adding the most value.

Impact:

  • Reduced vendor spend by $6.8M/year- enabling reinvestment in product development and sales team expansion.
  • Increased ARR by $3M via revenue leakage reduction and improved unit price realization via the revised pricing structure.