Secure-24

Margin enhancement and preparation for sale for rapidly growing technology Managed Services Provider

Inside Consulting saved 48% off baseline spend for network spend- a figure no one believed was possible. A prior consultant had attempted to address this category and failed. Inside Consulting made a believer out of the CFO while surpassing the savings target by $930k.- Mike Jennings, CEO
Inside Consulting delivered impressive savings in categories where we thought we had very little leverage, through their creative and analytical approach. They’re a true partner in every sense of the word- Shawn Peralta, CFO

Situation:

  • The company had grown extremely rapidly over recent years, resulting in a loss of focus in some areas of vendor management and cost control.  The owners had under a year until sale to conduct rapid profitability improvement– which needed to be well documented to pass future Quality of Earnings reviews by potential buyers

Insights and actions:

  • Secure-24’s growth and market niche had made them a much more attractive account for suppliers than was the case just a few years prior.  By modeling future volume consumption scenarios, we were able to generate very high supplier interest and exert much more leverage than was thought possible.
  • Supplier landscape analysis revealed critical recent changes:  Multiple critical categories shifted from near monopolies to now having multiple qualified alternatives.   By creating migration plans and quantifying switching costs, we developed a quantitative understanding of the client’s  leverage.
  • Network spend had grown unexpectedly over time.  Detailed analysis revealed opportunities to optimize bandwidth allocation across circuits and potential to reduce unit costs given the rate of industry pricing declines.
  • Detailed analysis of hardware maintenance revealed items with OEM coverage that were no longer in service, as well as key items in service which no longer had coverage.  Moreover, for many items the coverage from third party maintenance providers would be better and cheaper than that of the current OEM.
  • Product provisioning and customer billing were not synchronized, resulting in chronic ‘overprovisioning’ and underbilling of certain types of accounts.  Detailed reviews revealed actionable areas of revenue leakage.

Impact:

  • Reduced technology spend by $2.2M/year- a 35% savings on the addressable spend, with over 50% reduction in network spend.
  • Increased Annual Recurring Revenue by $1.1M