Impact Story
Created a Capital Stewardship Framework to Manage Expansion Plans for Boosting Earnings and Growth
A leading manufacturer of value added products asked Agamya to develop a framework for capital stewardship to manage significant capital investments and link to financial covenants and operating performance. Agamya evaluated the portfolio of expansion projects and developed a robust framework and model for managing the portfolio of capital investments. The result: a significant increase in transparency of initiatives and tracking of capital and milestones. This framework and resulting fact base created alignment on generating desired financial performance from the CAPEX commitment.
Situation
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Our client is a leading manufacturer of valued products in the US with significant global capabilities. The company is led by a visionary CEO and a strong management team that anticipated significant potential for growth in market share and earnings by expanding its suite of value added products as well as increasing its processing capacity. Other competitors had recently undertaken various expansion strategies but did not appear to have cohesion, which opened up further opportunities for the company. And increasingly, the company found that international markets are key to continued growth. The company asked Agamya to develop a framework for managing the portfolio of expansion projects, to allow the company to track the CAPEX and milestones, and provide a strategic and real time lens into portfolio performance.
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Our Approach
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As part of the initial assessment, the Agamya team discovered that the client’s strategic objectives and associated investment plans were sound. However, the plans were missing the requisite structure to properly identify the drivers of cost and associated value, and as a result, it was difficult to track the progress of initiatives in a meaningful manner to ensure that the right people in the organization were accountable for executing initiatives and measuring their progress. These findings revealed the need to create a scalable approach to developing a robust framework for capital stewardship that allows monitoring of all investments across the portfolio of initiatives, link to returns, and monitor the financial covenants that governed the capital usage.
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Results
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In applying this new fine-grained strategic approach to capital stewardship, the client has emphasized an organization wide effort to management by measurement, thereby improving its ability to track capital usage significantly more effectively. As a result of our involvement, the client has
As the client uses this strategic approach to chart a new course through its expansion plans over the coming years, it expects to achieve a double digit increase in sales and single digit increase in profitability, a substantive and game-changing acceleration of growth for a company with an already established industry position. |
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To learn more about how we have helped our clients create step changes in financial, operating and organizational performance, please click below:
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