Business Plan Discussion


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Business Plan Discussion

  1. 1. Si Business Plan 2010-13 <ul><li>April 2010 </li></ul>
  2. 2. a time of uncertainty <ul><li>Market has been changing </li></ul><ul><li>Budgets are tightening </li></ul><ul><li>Roles and responsibilities of clients are transforming </li></ul><ul><li>Election promises further changes and new policies </li></ul>
  3. 3. <ul><li>Corporate Objectives </li></ul><ul><li>Narrower range of specialisms </li></ul><ul><li>More cross company working </li></ul><ul><li>Consolidating presence in at least 6 regions </li></ul><ul><li>Codifying products and services </li></ul><ul><li>Driving up average contract values </li></ul>PATRICK MCVEIGH SHARED INTELLIGENCE Looking back
  4. 4. PATRICK MCVEIGH SHARED INTELLIGENCE Social Political <ul><li>Changing community needs and expectations </li></ul><ul><li>Service delivery and local commissioning </li></ul><ul><li>Population growth and demographic change </li></ul><ul><li>Social cohesion and equality </li></ul><ul><li>Changing legislation and regulation </li></ul><ul><ul><li>Sustainable communities </li></ul></ul><ul><ul><li>Climate change </li></ul></ul><ul><ul><li>Single Equality Duty </li></ul></ul><ul><li>Partnership working (LAAs, MAAs) </li></ul><ul><li>Localism </li></ul><ul><ul><li>Increased role LAs (SNR) </li></ul></ul><ul><ul><li>Devolved responsibilities </li></ul></ul>drivers of change Environmental Economic <ul><li>Increased environmental concerns </li></ul><ul><ul><li>Air/water quality </li></ul></ul><ul><ul><li>Climate change </li></ul></ul><ul><ul><li>Conservation </li></ul></ul><ul><ul><li>Sustainability </li></ul></ul><ul><li>Reduction in public sector resources and fall in private sector investment </li></ul><ul><li>Changing drivers for economic growth – innovation, skills, entrepreneurship </li></ul><ul><li>Changes in sectoral structure </li></ul><ul><ul><li>New Industry, New Jobs </li></ul></ul><ul><ul><li>Re-emergence of manufacturing? </li></ul></ul>
  5. 5. Process to date <ul><li>Thematic discussions Autumn 2009 prior to full review </li></ul><ul><li>Discussions with Programme Directors </li></ul><ul><li>Thematic discussions at Management Team </li></ul><ul><li>Development and completion of common template </li></ul><ul><li>Development of a new budget model </li></ul><ul><li>Board discussion on 2010-2012 budget </li></ul>
  6. 6. Market Overview <ul><li>April 2010 </li></ul>
  7. 7. Significant Si Expertise Less Si Expertise Potential Growth Markets Declining Markets <ul><li>Strategy development and scenario planning </li></ul><ul><li>Employment and skills </li></ul><ul><li>Sub-regional partnerships </li></ul><ul><li>Infrastructure planning </li></ul><ul><li>Climate change & sustainability </li></ul>MARKETS R MARKETS EXPERTISE Economic development/regeneration …. <ul><li>Housing </li></ul><ul><li>Appraisal/evaluation </li></ul><ul><li>Local econ assess </li></ul><ul><li>Input to masterplans </li></ul>
  8. 8. Significant Si Expertise Less Si Expertise Potential Growth Markets Declining Markets <ul><li>LSPs and thematic partnerships </li></ul><ul><li>Partnership working </li></ul><ul><li>Total Place number crunching </li></ul>MARKETS R MARKETS EXPERTISE © Shared Intelligence <ul><li>Governance reviews </li></ul><ul><li>Total Place facilitation </li></ul><ul><li>Sub regional partnerships </li></ul><ul><li>Organisational development </li></ul><ul><li>Scrutiny </li></ul><ul><li>Political leadership </li></ul><ul><li>Detailed service reconfiguration </li></ul>Public service transformation ….
  9. 9. Significant Si Expertise Less Si Expertise Potential Growth Markets Declining Markets <ul><li>Neighbourhood renewal inc NDC, NM, NRF </li></ul><ul><li>(so transfer to WNF/ FJF/ community engagement) </li></ul><ul><li>Equalities - depends on election </li></ul><ul><li>Health - inequalities/ partnership working </li></ul><ul><li>Health - qualitative </li></ul><ul><li>E&S/worklessness - linked to regeneration/ partnerships </li></ul><ul><li>Learning/org change </li></ul><ul><li>Partnerships/place </li></ul><ul><li>Health - NHS specialist </li></ul><ul><li>Health - quantitative </li></ul><ul><li>E&S - large scale quantitative/labour market & benefits </li></ul>MARKETS R MARKETS EXPERTISE © Shared Intelligence Evaluation ….
  10. 10. Significant Si Expertise Less Si Expertise Potential Growth Markets Declining Markets <ul><li>Supporting grant-funded neighbourhood and engagement approaches </li></ul><ul><li>Implementing Community Contracts and co-production </li></ul><ul><li>Implementing boro-wide n-hood approaches </li></ul><ul><li>Organisational change to become more citizen focused </li></ul><ul><li>Online engagement </li></ul>MARKETS R MARKETS EXPERTISE <ul><li>Old skool community empowerment </li></ul>Neighbourhood/community engagement ….
  11. 11. Significant Si Expertise Less Si Expertise Potential Growth Markets Declining Markets <ul><li>Evaluating health themes within regen schemes e.g. NDC </li></ul><ul><li>Tackling health inequalities in partnership </li></ul><ul><li>Evaluating cross-cutting health projects e.g. worklessness and health </li></ul><ul><li>Supporting Total Place </li></ul><ul><li>Learning and improvement in the NHS </li></ul><ul><li>- (Clinical) needs assessment </li></ul>MARKETS R MARKETS EXPERTISE Health ….
  12. 12. Significant Si Expertise Less Si Expertise Potential Growth Markets Declining Markets <ul><li>Public Libraries Strategy </li></ul><ul><li>New technologies </li></ul>MARKETS R MARKETS EXPERTISE © Shared Intelligence <ul><li>Knowledge of Links with other services </li></ul><ul><li>Evaluative skills </li></ul><ul><li>Community Engagement </li></ul><ul><li>Political interface </li></ul><ul><li>IT interface </li></ul><ul><li>Statistical analysis </li></ul>Libraries...
  13. 13. Business Plan Drivers <ul><li>April 2010 </li></ul>
  14. 14. Business Plan Drivers (1) <ul><li>After strong growth between 2000-2008 turnover growth has been sluggish </li></ul><ul><li>Profitability is particularly low given size and age of company </li></ul><ul><li>Our level of overheads can now support a larger organisation and need more income generators to maintain them at current level </li></ul><ul><li>With election and public expenditure cuts we are entering an uncertain year (and 3 year plus public spending squeeze) </li></ul><ul><li>However this is exactly the time to focus on growth and how we increase our market share </li></ul><ul><li>Enhancing our ability to win income in current and new markets is essential </li></ul>
  15. 15. Business Plan Drivers (2) <ul><li>Need to focus on improving profitability including reducing reliance on sub-contractors </li></ul><ul><li>Being really clear about how ‘shared intelligence’ runs through the business </li></ul><ul><li>Need new work winners to help break treadmill </li></ul><ul><li>Also need to enhance project management, supervision and line management to ensure we deliver assignments efficiently and to budget (even when we discount day rates) </li></ul><ul><li>Opportunity to enhance scale of operation in York where overheads are lower and market may grow </li></ul>
  16. 16. Key markets have diversified <ul><li>Economic development </li></ul><ul><li>Skills and employment </li></ul><ul><li>Housing and regeneration </li></ul><ul><li>Local government and local accountability </li></ul><ul><li>Health, social care and children’s services </li></ul><ul><li>Poverty and inequalities </li></ul><ul><li>Neighbourhood management and community engagement </li></ul><ul><li>Libraries, cultural services and community safety </li></ul>
  17. 17. Key markets/processes Themes Processes Visioning/ Strategy devt Partnership devt Evaluation Shared learning & peer review Good practice guidance Leadership dev Economic development Skills/employment Housing/physical regen Neighbourhood management/ com. engagement Libraries/cultural services Local government/local accountability Health and social care
  18. 18. Markets to focus on (1) <ul><li>Be clear about which are growth markets and which are areas where we are growing our market share </li></ul><ul><li>Ensure capacity to build on ED/Regen strengths </li></ul><ul><li>Roll out/resource our Total Place offer – capitalise on our current market lead </li></ul><ul><li>Integrate/extend sub-regional partnership offer – leading experts in this area </li></ul><ul><li>Broaden/deepen our employment and skills offer in growing market </li></ul>
  19. 19. Markets to focus on (2) <ul><li>Strengthen health sector capacity and market share </li></ul><ul><li>Enhance our housing capacity and market share </li></ul><ul><li>Strengthen use of evaluation and across all activity areas </li></ul><ul><li>Develop more short-term/task and finish shared learning programmes </li></ul><ul><li>Reinvent our learning network offer – service based </li></ul><ul><li>Review how to use Peer Review expertise </li></ul><ul><li>Develop Si Foresight offer </li></ul><ul><li>Significant stock take of market in June and October </li></ul>
  20. 20. Business implications (1) <ul><li>Strengthen top level Programme Director capacity </li></ul><ul><li>Increase work winning capacity more widely </li></ul><ul><ul><li>additional staff in public services and health </li></ul></ul><ul><ul><li>strategic links with work winners (associates/part – time senior appts etc) </li></ul></ul><ul><li>Ensure we have right capacity to deliver work </li></ul><ul><li>Continue to strengthen project management and supervision </li></ul><ul><li>Manage by real cost not discounted day rates </li></ul>
  21. 21. Business implications (2) <ul><li>Focus on developing York office capacity and scale </li></ul><ul><li>Strengthen marketing and visibility </li></ul><ul><li>Focus on raising average value of contracts </li></ul><ul><li>Maintain focus on getting on framework contracts </li></ul><ul><li>Continue to build more robust business systems </li></ul><ul><li>Better use of coretime to better manage resource allocation and income profile </li></ul>
  22. 22. The Budget Model <ul><li>Built new budget model </li></ul><ul><ul><li>Distinguishes between admin and fee earning staff </li></ul></ul><ul><ul><li>Treats network staff as consultants </li></ul></ul><ul><ul><li>Distributes overhead costs evenly across fee earners </li></ul></ul><ul><ul><li>Looks at the real cost of each staff member and the day rate we need to charge to cover costs and meet 12% return </li></ul></ul>
  23. 23. Assumptions in Financial Models <ul><li>Base line </li></ul><ul><ul><li>Current staff profile </li></ul></ul><ul><ul><li>Replacement for vacant posts and maternity cover </li></ul></ul><ul><ul><ul><li>D-L July </li></ul></ul></ul><ul><ul><ul><li>Celia July </li></ul></ul></ul><ul><ul><ul><li>Laura June </li></ul></ul></ul><ul><ul><ul><li>Benedict July </li></ul></ul></ul><ul><ul><li>Utilisation </li></ul></ul><ul><ul><ul><li>Principals, Seniors and Consultants 15 days/month </li></ul></ul></ul><ul><ul><ul><li>PD 10-14 days/month </li></ul></ul></ul>
  24. 24. Assumptions in Financial Models <ul><li>Growth Scenario </li></ul><ul><ul><li>PD Employment and Skills Sept </li></ul></ul><ul><ul><li>PD Economic Impact Sept </li></ul></ul><ul><ul><li>PD Economic Development Jan </li></ul></ul><ul><ul><li>Graduate Sept </li></ul></ul><ul><ul><li>Labour Market Economist July </li></ul></ul><ul><ul><li>Principal Public Services (TP) Sept </li></ul></ul><ul><ul><li>Principal Health Oct </li></ul></ul><ul><li>Tweaking utilisation downwards </li></ul><ul><ul><li>MD down to 9 days/month </li></ul></ul><ul><ul><li>2011-12 other rates reduced </li></ul></ul>
  25. 25. Implications for day rates Day rates have been calculated as follows:                                 Assume a gross salary of £30,000                                   Gross salary               30,000 Employers' NIC @ 12.8%             3,840 Pension @ 5%               1,500 Payroll cost               35,340 Share of overheads (note 2)             24,905 Annual fee income needed to breakeven           60,245                     Utilisation (chargeable days per month), say           15                     Minimum day rate (annual fee income needed / 12 months / utilsation)     £335 Day Rate to make margin             £404 Assumed day rate for business plan           £500 Target day rate               £600
  26. 26. How do we resource? – Phase 1 <ul><li>Recruit to cover recent/planned departures (in hand) </li></ul><ul><li>Ensure that new MD arrangements are resourced </li></ul><ul><li>Initial focus on ED capacity with strong link to building capacity in York </li></ul><ul><ul><li>PD Economic Impact Assessment ( & to contribute to evaluation work) </li></ul></ul><ul><ul><li>PD Employment and Skills </li></ul></ul><ul><li>Immediate demand for Labour Market Economist </li></ul><ul><li>Next priority capacity to spread TP work </li></ul><ul><ul><li>Have 3+ PDs who could lead, need capacity behind that </li></ul></ul><ul><ul><li>Principal consultant Public Services </li></ul></ul><ul><li>Grow health sector work </li></ul><ul><ul><li>Principal with hands on health sector experience </li></ul></ul><ul><ul><li>Strategic links with key senior associates (work winners) </li></ul></ul><ul><li>Routine recruitment of graduates Sept and Jan </li></ul>
  27. 27. Resourcing – Phase 2 <ul><li>Second phase once we understand better election impact and policy/budget directions </li></ul><ul><li>Further strengthen York </li></ul><ul><ul><li>PD Economic Development </li></ul></ul><ul><ul><li>Graduate (Jan?) </li></ul></ul><ul><li>Test scope for additional TP/ service transformation, organisational change work </li></ul><ul><ul><li>Principal consultant </li></ul></ul><ul><ul><li>Explore strategic links with key senior associates/part timers </li></ul></ul><ul><li>Look at how we strengthen housing offer </li></ul><ul><ul><li>Senior Consultant - Housing and Regeneration (? Also York) </li></ul></ul><ul><li>Assess community/N’hood engagement market immediately post-election </li></ul><ul><ul><li>Senior Consultant </li></ul></ul>
  28. 28. Strategic alliances <ul><li>We already work with a wide range of partners </li></ul><ul><li>Looking forward there is a need to review our relationships and be clear on added value </li></ul><ul><li>We also need to build new alliances based around our longer term vision </li></ul><ul><li>Who are we getting in bed with on TP in terms of the ‘full package’ technical delivery capacity </li></ul>
  29. 29. Risks <ul><li>Election/context </li></ul><ul><ul><li>Uncertainty, potentially prolonged with hung Parliament </li></ul></ul><ul><ul><li>Budget and CSR </li></ul></ul><ul><li>Management </li></ul><ul><ul><li>Teams and project management </li></ul></ul><ul><ul><li>Getting skills mix right </li></ul></ul><ul><ul><li>Quality assurance </li></ul></ul><ul><li>Competition </li></ul><ul><ul><li>We don’t keep up/get squeezed in key markets </li></ul></ul><ul><ul><li>We don’t recruit the right people quickly enough </li></ul></ul>
  30. 30. Systems <ul><li>Accounting system </li></ul><ul><li>Embedding Coretime (and imps) </li></ul><ul><li>CRM </li></ul><ul><li>Document management </li></ul><ul><li>Quality assurance </li></ul><ul><li>Health and Safety </li></ul>
  31. 31. Accommodation/Equipment <ul><li>Premises </li></ul><ul><ul><li>Leases (London and York) </li></ul></ul><ul><ul><li>Use of space – hot desking etc. </li></ul></ul><ul><li>Key investments needed </li></ul>
  32. 32. Next steps <ul><li>Management team discussion </li></ul><ul><li>Final Board agreement to budget </li></ul><ul><li>Staff briefing and discussion </li></ul><ul><li>Drafting of actual plan </li></ul><ul><li>Staff engagement and presentation </li></ul><ul><li>In discussion with recruitment consultant to help with search and selection </li></ul>