While there is a wide range of business services sectors (e.g., professional services, repair and replacement services, marketing services, call centers), the one thing they have in common is that people are the main asset, as well as main driver of costs. However, many services companies have difficulty maximizing their profitability because they do not fully understand the dynamics related to people utilization and productivity. Some negative outcomes resulting from this include:
- Acquisitions that are not fully integrated, leading to bloated cost structures
- Flawed cost estimation processes, leading to unrealistic pricing
- Inaccurate or non-existent information regarding profit contribution, resulting in losses by various aspects of the business including:
- Service line
Additionally, many companies have flawed methodologies for allocating overhead, and therefore do not understand fully loaded profitability by service line or account.
Getzler Henrich can assist management in harnessing the power of information systems, and in reengineering methodologies for calculating profit contribution and fully loaded profitability. We identify direct costs associated with the operating activities, enabling the company to gain insight into the variable contribution aspects of the business, and allowing loss makers to be turned around or divested. Working with the management team, Getzler Henrich can then install proper financial controls, management disciplines, and reporting to ensure that the company can continuously improve on its own moving forward.