The company operates in design, configuration, installation and maintenance services for industrial robots, automated production lines, complete production facilities, packaging systems, labeling systems and maintenance and support for these systems.
The company is organized like a group of companies having a satellite division specialized in electrical and mechanical design and automation.
The mother company is organized in main departments (Business Development, Micro production, Integration and Installation, Maintenance and support and Project Management) and support departments (Accounting, HR, IT, Legal, Purchasing, Facility Management). Each department has a manager and specialized teams.
The satellite company do not have support services, these being supported by the mother company. The satellite company has a compact structure specialized in electrical and mechanical design and industrial automation.
Ways of working
The mother company is a revenues and expenses center. The satellite company is expenses center working only for the mother company.
All the contacts are implemented and monitored like projects. Each project is a revenues and expenses center.
There are sales targets and developing objectives for the mother company. The satellite company follows the expansion trend of the mother company.
The opportunities are quantified in signed contracts which are managed as projects.
The profit margin of each project is subject to mother company policy. The mother company decides also the development policy for the satellite company.
The projects are monitored so that the estimated profit at the contact signing is accomplished. The profit is monitored at project (contract) level so that it can sustain itself and ensure the annual company profit.
Improvements implemented by Discern
The timesheet was made on a weekly basis counting the number of worked hours on each project. There was no direct connection between the type of resource and registered hours. There was no connection between the total number of resources from both companies and the number of resources that were counted and not counted.
Discern solved this by allowing the timesheet to be completed by each employee creating the premises for a direct connection between the counted hours and projects. More of that a direct connection between the type of resources and the project was made. This also covers the resources from satellite company. A secondary effect of this system was the fact that the employees became more responsible on the work and aware on the fact that delays and poor quality have a direct impact on profit indicators of the project and of the company.
The mother company has made efforts to have a clear visibility on revenues versus expenses on all the projects (contracts). Revenues and expenses, other than the manpower were counted by the financial department and the manpower was counted by project teams, data consolidation being made by the Sales Director together with project teams, him being interested in the profitability of each project. The process was slow, data being collected and analyzed manually.
Discern solved this by keeping both indicators (revenues and expenses) in the same application offering the project team, operations team and business development team visibility on data in real time. Discern makes a comparison between revenues and expenses in any moment from the project lifecycle and offers an image of the monthly expenses for all the project time frame. More than that, it allows a real time visual comparison between the initial business case and the actual level of the revenues and expenses.
Data aggregation was made manually because the informatic system doesn’t allow counting also the manpower expenses. More than that, the revenues and expenses invoices were registered and counted in two different systems not being available an automatic direct correlation. There was also unavailable the correlation between manpower expenses and projects, this being made by estimations which for most of the cases displayed a high level of approximation.
Discern solved this issue by the fact that all the data is kept in the same application and reporting is done in real time. Application monitors in real time the revenues and expenses at project, company and group of companies level.
Revenues and expenses forecasting were made offline using Microsoft Office Excel. This activity was coordinated by sales team with the help of operations, financial and project management team. Data processing was difficult because the data of each project was corroborated with data from other projects from the company and then at group level. The workload was high, and the results had a high level of uncertainty because of the manual ways of collecting and processing data.
Discern solved this problem by keeping in the same place revenues and expenses already registered and the forecasted ones until the end of the project. The easy to use interface and real time comparisons with the project business case significantly reduce the probability for human error and the reporting is made in real time without being necessary someone to integrate data and generate specific reports. More of that, the application is used by the sales department for forecasting sales offering a real time image at company and group of companies level on the probability of touching the objectives committed in the business strategy.
Counting the work load between the companies was difficult to do. The satellite company doesn’t have support structures, their role being taken by the mother company, and is complicated to evaluate the real costs registered on the projects by both companies. More than that there is the usual use case when operational resources registered on the satellite company are involved in activities on contracts that are registered on the mother company. This practice is an important factor for not being able to objectively evaluate each project for determining the profitability and prevents the collecting of real information for establishing the business strategies and price policies.
Discern solved this issue by allowing to register work hours on any project independent of the company creating the premises for correct collection of the manpower expenses on a certain company done by resources from a different company. Having this data, the companies made B2B contracts for compensating these expenses and the cost evaluation for each project was made rigorously.
Discern added value
Employees responsibility. Because the employee has a clear image on his own work and on the unallocated hours that have to be wisely spent, the work efficiency increased with 40%.
Managers responsibility. Because the manages have full visibility on revenues and expenses, they become more responsible in following the deadlines, wise resource allocation and optimization of the spending. All these increased the success rate of projects with 35%.
Clarity at company level. At company level, part of a greater group of companies, there are dashboards that facilitate keeping under control the revenues and expenses so that the committed business objectives are analyzed creating the premises that management decisions to be taken based on numbers and in real time. These increased the profitability to company level with 32%.
Clarity at group of companies level. At group of companies level there are dashboards that facilitate keeping under control the revenues and expenses so that the misalignment to be identified in time to be resolved. This increased the profitability of the group with 26%.
Clarity for business strategy. There are dashboards that allows the analysis of revenues and expenses on clients and suppliers so that the top management can identify in time some dangerous dependencies on certain clients or suppliers that if lost can jeopardize the entire business. This consolidated the market share and reduced the dependencies of the strategic suppliers.
Positive cashflow. There are dashboards available that track in real time the level of cashflow at project, company or group of companies level. A positive cashflow ensures a good function of the company and is an indicator of wealth. This raised the solvability of the company, increased with 45% the degree of suppliers satisfaction, decreased the suppling costs by eliminating the associated financier risks and lowered the interest rates with 2-4%.