American Ingenuity Consulting LLC

Creating Profitable Strategic Business Growth & ChangeĀ 

Strategic Case Blog

Attention... IT Buyers and Sellers!

Posted on September 9, 2016 at 2:20 PM Comments comments (0)

Attention IT Buyers and Sellers!

How do Buyers know which tech options are best for their company? There are so many considerations to sort through. Scalability, mobility, cloud migration, security, collaboration, compatibility, capital costs, operating costs, technical risks, pros and cons of tech maturity. It can really make your head spin!


How do Sellers justify expenses to buyers? Typically, by stating a value proposition. But the value proposition rarely goes beyond the IT related goals. Realistically, there are far greater positive and potentially negative ramifications to the larger business.


When these larger business pros and cons are not analyzed, the CIO can be missing opportunities to help the company grow. The CIO can also be missing critical issues that may directly cause harm to the business. That’s when CIO morphs into “Career Is Over”.


So what is a responsible CIO to do? The decisions are already complex. So how do you add in top level business considerations without muddying the waters? Use a process. Use a process that will quantify strategic business implications both positive and negative. The process for this is not unlike existing technical assessments that are routinely performed for technical implementation considerations. Except that the format and objectives are structured to address the top level business risks and opportunities.


Making the right decisions can change a career ending project into a significant prosperity event. You may even justify a larger budget if the benefits are there. After all, IT has to be a strategic asset.


Ingenuity Risk AssessmentTM is based on the “9 Pillars” of Business Strategy. No business risk or opportunity exists outside of the "9-Pillar" confines. A well-crafted strategy assessment can highlight fatal issues or great benefits to the top or bottom line of the business. The assessment can also include the typical technical factors required for a solid implementation program. Two birds, one stone.


The business strategy assessment also looks at far more than just “Value”, “Value” is only one of the 9 strategic pillars for business success. There are 8 other strategic measurements that need to be done to drive top and bottom line improvement.


The takeaways here are to:


1.) Integrate the needs of the IT group with the needs of the larger business with a comprehensive strategic assessment.


2.) Collaborate strategically with a process to drive growth and profits, this will propel your success.


For more on Strategic Assessments contact [email protected] or visit www.ai-strategy.com

 


See a Sample Case: Organic Growth Vs. Acquisition

Posted on June 21, 2016 at 7:30 AM Comments comments (0)

The Wedoit Company has been growing steadily at about 7% per year  bringing on 5-8 new customers annually. It has been growing because it has quick response times and competitive pricin for its custom metal products. But the market growth potential is limited and margins are narrowing. Management is considering various options for new growth direction.

They can:

A.) Add in new types of products for their existing customer base.

B.) Acquire a company with a standard product line that fits with their existing mfg operations.

C.) Acquire a company that is focused on rapid prototyping services.


 Which path should the executives of Wedoit choose?

The revenues of Options B and C are similar as are the current profitability. Option A requires very little investment, so the initial thought is that Option A has the lowest risk but after conducting an IRA planning project we see that’s clearly not the case.

 This scenario happens every day in the US as companies wrestle with growth and change. Using the IRA strategic planning process, we can evaluate the entire business scenario of each option and deliver a 9 point score that will quickly highlight the most successful option for Wedoit.

 


 The Issues become very clear.

A. If Wedoit Offers new and different products (Option A) , they would be choosing the highest risk option. This is the least likely success path. Although their organization is familiar with the approach the market demand is not great.

B. Acquisition of a product that fits into their existing operations (Option B). In this scenario their organization is geared up for the work they would just have to adjust their sales and marketing structure. But the target acquisition is selling out because the product line is no longer the front runner in their space. Wedoit can remove some overhead costs after the acquisition to improve operating profit, but that doesn’t change market and competitive conditions.

C. The best choice, (Option C) has growing demand in the market and is a service that requires similar skillsets to their existing organization. The slightly lower score for the organization is due to the learning curve with the new markets and technology. But most importantly, Option C represents a stronger market where differentiation is rewarded. This option also helps the company to sell its existing products by being more responsive and opens new market segments to Wedoit.