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Horizontal Integration – The Direct Path to Digital Success

Overview

Three Tips for Incorporating Digital Holistically Across Your Business When tackling digital transformation, many CEOs chose to structure their digital teams as separate entities. They believed that approach would be less disruptive to their core businesses and will be easier and faster to get off the ground. However, we now know that adding digital vertically limits its benefits. Though there are short term gains to building or buying a separate digital arm to your organization, integrating digital across your business can leverage valuable existing company assets in ways that a separate unit cannot. And aligning digital closely with a firm’s other capabilities fosters the internal speed and agility critical to meeting the “anytime, anyplace” expectations of today’s digital marketplace. Nike is a prime example of a company that has transformed itself by weaving digital organically through its enterprise to strengthen…

Don’t Forget the Basics While Chasing the Changing Retail Marketplace

Overview

In October 2018, I had the pleasure of joining a panel with Michael Kollender, Rick Perkal, and Colin Watts at the Association for Corporate Growth’s M&A East event in Philadelphia. We had a practical and engaging discussion on “The Changing Retail Industry and the Impact of Amazon.” Our discussion revealed that while the new retail landscape presents challenges and Amazon has forced many to rethink their operating models, some have simply taken their eyes off fundamentals.  Below are a few ideas that emerged from our conversation. 1.    Develop “outside-in” leaders who win in the business of today and tomorrow. CEOs and leadership teams must be able to recognize and act upon the trends that have potential to improve their business. The ever-increasing pace of disruption demands that organizations build a method to constantly identify disruption while evaluating ROI and required capabilities to apply them. Yet,…

The Future of Health insurance in the United States

Overview

Is the 20th century model still viable in the 21st century’s new economy? The 20th century’s health insurance business model based on risk pooling no longer reflects the social, technical, economic, and political realities of the 21st century. The new reality and long-term trend suggest that health insurance in the US will evolve into a third-party administrator (TPA) of value-based claims processing on behalf of government entities, where the lowest cost provider of services will win in the marketplace. SSA & Company’s national bench marking study on the economics of 174 payers, combined with scenario based planning techniques, yields insights about which payers are well positioned for the coming sector disruption, and what steps need to be taken now that will set payers on a path for longer-term success. Read the complete op-ed that further delineates our insights and conclusions…

Jason Meil and Regenia Sanders contribute to CFO Magazine Article, “Big Data: The Latest Rage in Supply Chain Management”

Overview

Early uses of big data were concentrated in two areas: customer segmentation/marketing effectiveness, and financial services, particularly in trading. Recently, supply chain has become the “next big thing.” Why? A company’s supply chain is rich with data, and it’s also a large cost component. Combined, those facts mean that advanced analytics can become a strategic weapon for optimizing the supply chain. However, many companies can’t see the forest for the trees. They are optimizing, but not strategically. When applying data to supply chain, it’s critical to step back and look at what truly drives business value. “They’re Digging in the Wrong Place” As every fan of “Raiders of the Lost Ark” knows, Indiana Jones found the Ark of the Covenant first. The Germans had far greater manpower and resources and they were more efficient, but they were competently digging a…

Cutting Costs Through Shrink Reduction

Overview

For an industry where company margins typically hover between 1% and 2%, shrink remains a critical opportunity to enhance company performance and improve the bottom line. While most retailers have tried a variety of tactics to reduce shrink’s monthly toll on profitability, for many it remains a frustrating game of trial and error: some efforts reduce shrink at the cost of losing margin while other techniques compromise sales. Continue reading

Addressing the Root Causes of Risk in Clinical Trials

Overview

As Pharmaceutical companies shift their emphasis away from the blockbuster model, they need to bring a broader portfolio of drugs to market. This escalates the complexity of clinical trials—the most costly and time-consuming component of the drug R&D cycle—through higher costs, recruitment challenges and new training demands. A potentially more serious problem is discussed less frequently, however: the increased risk to regulatory compliance and patient safety. Continue reading

Making Risk Management Work in Financial Services

Overview

Never before has the financial services industry faced such intense pressure. While Washington lawmakers and regulators debate the need for additional regulations on the industry, financial services firms must themselves remain focused on improving how they manage risk. Managing risk has always been a core concern of the financial services industry, but far too few firms have done it successfully. Perhaps this is because many managers have treated risk management as an inevitable balancing act between keeping risk under control on one hand, and keeping costs down on the other. The conventional wisdom has been that some trade-off was necessary. Most have believed that any effort to reduce costs would pose new or higher risks, while adding steps to increase risk monitoring would add unwelcome costs in a highly competitive environment. SSA & Company, drawing on in-depth work with financial services clients, approaches the…

The Hidden Cost of Electronic Payments

Overview

Over the last ten years, consumers have dramatically increased their use of electronic payments, particularly when it comes to credit and debit cards. In fact, since 2003 debit and credit card purchases in the US have consistently exceeded check and cash payments. Given the much lower cost of processing electronic payments and the interchange revenue that credit and debit cards generate, banks have welcomed the electronic payment trend, encouraging both businesses and consumers to leave paper behind and enter the world of virtual finances. In the electronic payment frenzy, however, many financial institutions have failed to recognize that the increased adoption of electronic payments results in higher customer service costs. Customer service contacts per electronic payment easily exceed contacts for check and cash transactions, leaving financial institutions with unexpected costs. There are two primary causes for the higher rate of…

Offshore Oil Platforms: Measuring the Way to Success

Overview

In the offshore oil industry, the old adage “if you can’t measure, you can’t improve” rings as true as ever. While corporate management teams monitor profit, uptime, flow rates and a few other high level metrics – all of which are important – very few oil companies truly understand how to best measure the operational performance of their platforms. In the absence of understanding the key inputs, outputs, and business drivers of day-to-day platform operations, oil companies miss the opportunity to decrease costs, improve productivity, and optimize their profits. There are several critical metrics that many oil companies fail to measure in the regular course of business, resulting in both inefficient and ineffective oil platform operations. These metrics, also known as Key Business Indicators (KBIs), include the measurement of items such as profit, reliability, integrity, safety, and people. KBIs provide…

Quantifying the Soft Stuff

Overview

So, we know as business leaders, that this process is a priority for improvement – no question. The process output, let’s says quality improvement, is clearly aligned to our business goals and quite frankly demands improvement from a competitive standpoint. The pain of the cost of poor quality is clear and the “defect” must be minimized, better yet eliminated. OK, let’s charter the project, assign to a project leader and team and oh yes, determine the anticipated financial benefit to the organization. This is where things could get interesting. Are the benefits “hard savings”? Well, not exactly as we don’t expect to free up any personnel – today’s strategy – and we also can’t count on other benefits, such as increased sales due to improved quality, with a high level of probability. So, we determine the benefits will be labeled…