How will we make money, not just today but prospectively? Today’s complex business decisions require a detailed understanding of the underlying economics and core challenges to sustained growth and profitability. There will be new challenges in every business launch, expansion, new venture, partnership… even with business-as-usual. Ensuring that critical business model and business case key success factors and risks are understood by an executive team is a cornerstone to both short- and long-term success.
Business Case Modeling and Analysis
CSMG regularly helps clients and executive teams with highly detailed, bottom-up economic analysis. Whether our client is entering a new line of business or market, embarking on a partnership, or considering an investment, CSMG will “roll up its sleeves” and ensure the detailed underpinnings of a business model and business case are well understood. We provide our clients with clear and compelling economic analysis regarding customer usage data, sales and marketing, SG&A, technical and operational costs, and capital investments. Key sensitivities must be understood to enable executives, investors, and partners to plan for the future. Typical CSMG client work in this area covers the following:
- Customer Needs/Drivers Analysis: CSMG leverages secondary research and conducts primary research to develop both quantitative and qualitative understandings of customer expectations and needs/attributes supporting product & service offers and company interactions, and through this determines those key customer events that affect customer satisfaction. By identifying the key drivers of customer satisfaction, purchase intent, contract renewal, and willingness to recommend, CSMG can analyze differences in important attributes based on customer segments and other customer demographics.
- Ecosystem Analysis: After assessing major industry drivers and constraints as they affect the value chain, CSMG typically evaluates various vendor solutions, platforms and product capabilities. The ecosystem analysis will focus on evaluating key technologies and required capabilities across a "solution stack" and customer lifecycle or value chain metaphor, and evaluating the eco-system requirements to support expected solutions, platforms or offers.
- Technical and Operational Assessment: CSMG will assess the various functional and technical areas and identify the inventory of business performance gaps, and through structured analysis convert these into a set of strategic improvement opportunities, defining a set of business requirements and a high-level future state business architecture. We will also gather quantitative data and qualitative inputs to support the development of a very high-level business implementation plan using a multi-factor evaluation methodology to determine an acceptable level of implementation difficulty for our client.
- Operational Model Development: CSMG develops the operational model leveraging the detail around key operational design requirements, determining what can be leveraged internally and what external partner needs are required. Often, the effort includes determining the detailed go-to-market service delivery planning requirements focused on the key elements of marketing strategy, channel, customer, operational support and billing systems (OSS/BSS). The completed operational model will have determined key mega-processes and metrics, defined key functional team competencies and capabilities, develop high-level FTE forecast, and identified internal, new hire or vendor decisions.
- Business Case Modeling: After determining what will be the necessary core capabilities of any program (product release, network build-out, etc.) CSMG develops the business case model to understand and evaluate financial impacts usually in economic terms (e.g. higher ARPU, lower CPGA variables, etc.) that are relevant to our client’s industry segment. The business case model includes key revenue and cost fact and assumption sets modeled into income statements and cash flows detailing revenue, opex, capex, peak funding, etc. The model may also be developed with various sensitivity analysis and scenarios such as "high"/"low" testing or tornado analysis.
- Partnership Strategy and Analysis: CSMG develops an effective and collaborative partner value chain across manufacturers, suppliers, distributors, and resellers/dealers. The partnership strategy is a very deliberate and focused attempt to generate increased competitive advantage through the development of an effective and relevant partner network – alliances as well as channels. Understanding how independent businesses within the partner network generate profits can provide insights into what is likely to motivate them. CSMG determines what sources of competitive advantage have been "left on the table" by competitors and what value partners can gain from a partnership strategy.
- Negotiation Support: CSMG’s deep understand across all areas of the business case and business economics for a client allows us to support executive teams in delicate negotiations with partners. For example, in order to better inform and prepare our client, we often model the economics and pain points of their potential partner.