Case Study – Turnaround of an IT business
The unprofitable business unit was about to be closed which would see a number of people lose their jobs. Gaynor identified a means of turnaround as well as developing a strategic benefit for the parent company. Business profitability was achieved, new innovative services were introduced and the University had a tool with which to build stronger relationships with its alumni. This resulted in a profitable and sustainable business for the future.
The business unit was an unprofitable ‘commercial’ arm of a leading University and provided internet services to over 40,000 B2B and B2C customers. The actual service delivered was robust and fair, but no longer innovative or appealing and the big players were heating up the competition. Margins were being driven down, the industry was extremely volatile and competition occurred primarily on price. Customer numbers were starting to dwindle and there was little or no marketing. The staff had lost interest and the person whom the service was named after asked for his name to be removed. The service simply couldn’t continue in the same way.
First and foremost down-line internet data provision was renegotiated through a tender process, which saw a significant reduction in the direct costs associated with delivering the service.
Through a more open and inclusive approach to leadership and management all 80 people who were involved in providing the services were empowered to influence the future of the business. Through team meetings, involving managers and other interested staff we brainstormed potential ideas for the future and market research of B2B and B2C customers, ascertaining the interest in certain new technologies, was undertaken through the Help Desk and Senior Management. The research allowed us to develop a new brand and fully integrated marketing communication.
A number of new and innovative services and new technologies were introduced that were sold on value, service differentiation and service excellence, allowing us to charge a premium compared with many competitors.
Profitability and customer numbers increased. The business continues to thrive and operate profitably through a committed and engaged team of people. The University has a means of maintaining relationships with its alumni long after they have left the University, which can add significant value to the University.
Gaynor Gravestock is a business specialist and director of Synergy and Strategy Limited.