Case Study: How a Current State – Future State Assessment Led to a Complete Optimization of Business Systems

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Executive Summary

Withum’s Management Consulting Services (MCS) Team used the Customer Journey technique to quickly gain an understanding of a manufacturing and supply company’s business. The assessment served as a roadmap to help them tackle their primary accounting and inventory issue. In addition, it also uncovered a roadblock that hindered the company from future growth and provided opportunities and technology alternatives that maximized operational efficiency and promoted real-time visibility into business performance.

The Client

A large, family-owned manufacturing and supply company that produces high-quality specialty alloy, wire ribbon and strip for use in electrical and mechanical projects and related applications found itself struggling to optimize and adopt QuickBooks Online (QBO) and accurately address job costing and inventory tracking. As an industry leader and premier supplier, they pride themselves on manufacturing products from the best compliant sources and knew their internal operations had to match that standard.

Withum’s MCS Team aided a manufacturing and supply company with stabilizing and optimizing the adoption of QBO and inventory challenges. This process defined the internal and external flow points, system landscapes and integration points, and current reporting of the company.

The Challenge

It’s not uncommon for family-owned businesses to find themselves ill-prepared when their once state-of-the-art technologies are suddenly outdated and unable to provide the functionality required to maximize performance. In most cases, this is an enviable problem to have. It means the one thing that all businesses strive for – growth! This growth presented two unique challenges:

• Navigating the landscape of change and modernization necessary to compete in the present competitive environment without interrupting the business’ ability to serve its customers.
• Ensuring the new systems can grow and scale as fast and as successfully as the business itself.

Such was the case with this manufacturing and supply client. After more than 35 years of delivering quality, custom-engineered wire, the company found itself profitable, but with little insight into how their business activities were impacting the bottom line. Withum’s MCS Team was contacted to assess the current state of the client’s business operations and help optimize their software capabilities. More specifically, Withum was engaged to stabilize and optimize the client’s adoption of QBO as its accounting solution. The MCS Team was also tasked with addressing the company’s inventory challenges, particularly their struggle to accurately assign costs to generate inventory or attribute revenues to its sale.

The Approach and Solution

To fully assess the scope of the client’s needs, Withum used a technique called the Customer Journey to quickly gain an understanding of the organization. This approach allows the business to be seen through internal and external customer touchpoints and ultimately provides the inputs required to align solutions with strategic vision. This client’s Customer Journey discovery process involved establishing a holistic review of the current IT and operational landscape. This was done through a series of boardroom workshops in which interviews and discussions were held to uncover key business processes and scenarios for consideration, with particular emphasis on:

• Internal and external process flows
• System landscapes and integration points
• Understanding of current reporting

Across the organization, current state pain points were observed and recorded as issues to address in an enterprise-wide solution. With such pain points top of mind, the organization’s short-, medium- and long-term goals were considered to define a future state vision for the company.

The solution began with a simplification of the client’s chart of accounts and a complete optimization of its present QBO functionality. To supplement the client’s refreshed QBO capabilities, a full-scale inventory tool was suggested to address the client’s issues with job costing and inventory tracking. Beyond the initial scope of the engagement, the MCS Team also suggested the procurement of a CRM/Marketing software for customer management, generating and tracking new leads and driving further business growth. A host of other potential software tools was recommended to streamline all aspects of the client’s business; from reporting to accounts payable to job time tracking, and more.

The Results

In meeting with employees and other business stakeholders to more fully understand their pain points, Withum noticed several themes threaded throughout the client’s current technology state. These pain points were standing in the way of their desired future state functionality and included:

• Manual processes and disparate systems
• Insufficient documentation and communication
• Lack of reporting and process controls

Outdated, manual processes throughout the company’s business units kept vendor and customer information decentralized, making it difficult to foster and manage healthy and growing relationships. The lack of interconnected tools left the enterprise open to severe communicative and operational inefficiencies. This tribal knowledge, coupled with little standardized documentation or control procedures, posed several unnecessary and preventable risks to the business. Thankfully, to accompany the client’s long list of opportunities for improvement, Withum also observed the most important prerequisite to every business transformation — a willingness to improve.

With a well-rounded understanding of the client’s current state and a clear vision for their desired future state, it was left to Withum to assess key functional gaps and take the client to where they wanted to be. To do so, Withum summarized a host of different options for the client to consider. These options not only addressed the primary accounting and inventory troubles but also offered a number of opportunities and technology alternatives available to maximize operational efficiency and promote real-time visibility into business performance. The recommendations were more than aspirational. They were accompanied by high-level estimates of time, effort and cost along with a high-level summary of the level of change and investment involved with each future state option.

“We knew we had the right guys for the job. Withum’s MCS Team went out of their way to be available to us when needed, and they were instrumental in not only choosing the best inventory management system for our company but also helping us to get the best price and best contract. Their enthusiasm and sincere interest in our company and its success is obvious and appreciated.” — National Electric Wire Company