战略研究准备

1、35/35 .A Case Study of KPMG Consultings Enterprise Value Creation FrameworkBy: Marcy Jill StraussHigh Tech Lead, Enterprise Value CreationKPMG ConsultingBaoSteel Group . 海量免费资料尽在此Executive Summary3Introduction4Methodology and Analysis.5Findings.7Results.10ContentsE x e c u t i v e S u m m a r y Yich

2、ang, a subsidiary of the $8 billion Chinese steel behemoth BaoSteel Group, came to KPMG Consulting to understand the changes required to be globally competitive, now that China has been admitted into the World Trade Organization (WTO). The client selected KPMG Consultings Enterprise Value Creation f

3、ramework that has been known to create value for companies, and has earned favorable acclaim from external analysts at Goldman Sachs, Aberdeen Group and AMR, among others. Through the Enterprise Value Creation (EVC) framework, the team was able to understand Yichangs primary problems, and to develop

4、 solutions to address these issues. From the beginning, a high level of executive participation helped the team to hone in on the process areas of focus. They included: New Product Development Marketing, Market Analysis, Product PricingSales, Customer Service, Channel Management, Customer Solution D

5、evelopmentFinancial and Managerial Accounting, Cost ControlsPerformance ManagementThe team relied on interviews, management reports, quantitative analysis, benchmarking, competitive intelligence and best practice information to ascertain and document the current state of Yichangs processes and opera

6、tional efficiency. A Scorecard and Value Impact Analysis were used to create medium and long-term target metrics. After two client offsite meetings to gather feedback and to develop consensus within the management team, a roadmap was developed that prioritized and laid out future initiatives. The sc

7、orecard metrics were directly linked to the fulfillment of the roadmap projects so ongoing measurement could be applied to gauge progress. The impact of process changes were also linked to BaoSteels financial statements. In ten weeks KPMG Consultings work positioned the client to:Achieve consensus o

8、n the current state issuesDistinguish the areas of greatest opportunityAgree on remedies to current problemsMobilize efforts to become more efficient and competitiveSystematically measure and achieve the desired results KPMG Consultings primary sponsor, the CFO, believes the EVC project was pivotal

9、in the companys ability to be successful as the implications of Chinas acceptance into the World Trade Organization are realized.I n t r o d u c t i o nChinas economy has been expanding at an annual rate of seven percent over the past three years. The GDP growth of Shanghai has approached ten percen

10、t during that same period. This has been fueled by Chinas entry into the World Trade Organization, as well as the increased globalization of trade and the development of an educated, tech-savvy workforce.While Chinas steel market has become the worlds largest, with annual demand estimated to grow by

11、 50 million tons to more than 182 million tons by 2005, industry expansion plans fall far short of these numbers. Only 27 million additional tons of capacity are forecast to be built, forcing the existing plants to either become more efficient quickly, or to leave a lot of demand on the table.Demand

12、 for steel in the US, Europe and Japan has been sluggish while China has seen growth of over 400% since 1980. Consuming over 130 million toms in 2000, China is now the biggest steel market in the world. China consumed more than 130 million tons1 of steel in 2000, surpassing the United States to beco

13、me the biggest steel market in the world. Three percent of the nations $1Trillion gross domestic product comes from steel and over three million people are employed in the industry.Jonathan Woetzel, a director in McKinsey & Cos Shanghai office believes that the “countrys steel producers are in poor

14、shape to take advantage of their homelands boom. Fragmented, uncompetitive, unprofitable, heavily in debt, and geared to the wrong products, they are losing out to imports.”BaoSteel Yichang, like most of Chinas steel industry, has focused primarily on producing steel rather than on satisfying custom

15、ers. The company tries to keep the mill running at optimal capacity to maximize their Return On Assets instead of focusing on increasing profit and customer satisfaction. Many operational improvements and mind-set changes, such as managing processes instead of managing siloed functions, are required

16、 for real efficiency gains to be felt. Yichang, a subsidiary of the $8 billion steel behemoth BaoSteel Group, came to KPMG Consulting to understand the many changes it would have to make to compete in the global market effectively.The client wanted an actionable roadmap they could embed in their imm

17、ediate operating plans. They viewed the roadmap as the initiating step of an evolutionary process to sustain their profitability as they enter the global steel market. Many management practices that are established in faster moving industries and in more aggressive markets had not yet been introduce

18、d into BaoSteel, given the protected markets and significant government involvement in Chinas steel industry. The Chief Financial Officer considers KPMG Consulting a strategic partner in educating the team in proven business practices. Methodology and AnalysisSpecifically, BaoSteel Yichang sought to

19、:Diagnose inefficiencies in its operational and infrastructure processesIdentify improvement opportunitiesDevelop specific recommendations and solutions for future executionAdd metrics and quantitative measurement around its key process areasInstill more rigorous performance management practices to

20、aid in accomplishing goalsThe client selected KPMGs Enterprise Value Creation framework that has been known to create value for companies, and has earned favorable acclaim from external analysts at Goldman Sachs, Aberdeen Group and AMR, among others. Through the Enterprise Value Creation (EVC) frame

21、work, the team was able to understand Yichangs primary problems, and to develop solutions to address these issues. From the beginning a high level of executive participation helped the team to hone in on the process areas of focus. They included: New Product Development Marketing, Market Analysis, P

22、roduct PricingSales, Customer Service, Channel Management, Customer Solution DevelopmentFinancial and Managerial Accounting, Cost ControlsPerformance ManagementStarting with detailed in person interviews with each of the functional area heads, the team stepped through the five stage EVC process.The

23、interviews focused on understanding the current processes used in each area. These meetings, paired with reviewing management reports and other materials, comprised the primary method used to develop the Operational Blueprint (EVC Phase 2). Pointed questions laid the foundation for the teams explora

24、tion of the As-Is state. Each interview was augmented by further discussions with individuals responsible for key tasks within each process. Interview questions included:What are the key processes in your area?Diagram the key processes.What is the estimated cost of each process?How long does it take

25、? How many people are involved?What metrics are used today to manage the processes?What are the problems associated with the current processes?What do you think should be done instead?What metrics should be used to manage the new process?What changes are needed to transition to the new processes?Wha

26、t organizational structure would optimize process efficiency? (Draw it)Process maps were developed that highlight the key steps in each focus area. The team distilled the metrics currently applied to as-is processes to understand how efficient and effective they are. These process maps, together wit

27、h conclusions regarding how the processes are managed and monitored, were integrated into a current state blueprint.FindingsBased on this information, the team identified trends throughout the organization suggesting that an inconsistent level of integration among the functional groups was hindering

28、 efficient management of fundamental cross-functional processes. In some cases the team had to create the as-is process maps during the interview and to ferret out the implicit metrics around the vital activities within that process. Together the team came to an understanding that functional walls a

29、nd the siloed orientation of the enterprise were significant factors in creating inefficiencies and driving up costs. Information useful to many teams was frequently the domain of one function, and was not necessarily communicated to other groups. Decision making relied on limited understanding of t

30、he impact on processes further up and down the value chain. This impeded accountability for the decisions, and disincented a broad, contextually informed approach to tasks. Additionally, performance incentives were function specific and put the Manufacturing, Sales and Marketing teams at loggerheads

31、. The former is incented to keep asset utilization levels high, while the later two are measured on customer satisfaction and sales levels. A number of the groups had a difficult time diagramming the key processes under investigation. Individuals thinking had been caught within functional walls. Lin

32、king tasks that spanned different departments, such as new product development, required puzzeling together pieces of disparate functional responsibilities.This meant that communication addressed specific tasks instead of overall processes. It also meant that there were few or no metrics used to man

33、age efficiency and effectiveness from end to end. Metrics such as New Product Introduction Cycle Time, keenly regulated by many High Tech companies where product iterations are introduced every 3-6 months, were not in place at BaoSteel Yichang. While the manufacturing team could tell us the value of

34、 scrap produced in tuning a new width of cold rolled steel sheets, the cost or time of the development process itself was not readily known or managed.Once the current state processes and conclusions had been validated, the team set out to aggregate best practice processes to create a gap analysis.

35、Methodologies, metrics, benchmark values, process maps, and example case studies were developed for each of the four areas. The research came from analyst groups such as Gartner Group, IDC, Meta Group, as well as Harvard Business Review, and steel industry related publications. Non-industry specific

36、 information was customized to address Yichangs needs by the Client / KPMG Consulting process teams. Using this information, the team located gaps between best practices and the current state as-is processes. Three to five recommended projects were scoped in each of the four process areas that would

37、 help BaoSteel Yichang fill the gap. Each new process, organizational and infrastructural change was supplemented with corresponding metrics. These metrics and benchmark values are considered indispensable to manage the process effectively.A two day offsite meeting was held an hour outside of Shangh

38、ai to communicate the details of the recommendations. The team and executive sponsors focused on making sure that each internal stakeholder felt his/her needs were well represented and met by the current assessment and recommendations. Best practice information was presented in support of all recomm

39、endations, so the client could understand the sources of the ideas and how they can be put into practice at BaoSteel. Project scoping and validation was accomplished the second day leaving the team to prioritize the recommended projects. A decision model called the Business Value Matrix was employed

40、 to help prioritize projects by ranking them based Operational Importance and Ease of Execution. Each project was reviewed and ranked by the team along these criteria. An indication of the ranking was then placed on the matrix so the overall portfolio of recommendations could be understood. It is im

41、portant to note how the recommendations for each process area are prioritized. An aggregation of projects in one area, suggesting similar roll-out priorities, can require lofty demands on management and staff time. This makes them difficult to roll-out effectively without staggering the timing. This

42、 occurred with the Finance recommendations. The team re-scoped the projects to include the greatest benefit up front while still laying the necessary foundation for future requirements. The placement was then re-evaluated based on sequencing requirements, corporate goals, and the expected impact of

43、earlier projects on later stage initiatives. Once this “second-round” prioritization step was taken, those initiatives falling in the top right quadrant those of high importance that are easy to execute are generally pursued first. A Value Realization Roadmap (EVC Stage 3) was then crafted. The road

44、map phased the projects into three month increments. A Scorecard (EVC Phase 5) was then built to enable management to keep the team focused on what needs to be accomplished. It is also a tool to drive performance. Current and target values were calculated for 40 operational and financial metrics. Th

45、e metrics follow the four high priority process areas. Example metrics are:New Product DevelopmentNPD Cycle Time Percent of Revenue from Products Less than Two Years Old Marketing, Market Analysis, Product PricingMarket ShareForecast AccuracySales, Customer Service, Channel Management, Customer Solution DevelopmentAverage Contract SizeOn Time DeliveryDispute Resolution Cycle TimeFinancial and Managerial Accounting, Cost ControlsInventory TurnsCash to Cash Cycle Time COGS Percent of Reven