1.1       Major Cost Reduction, Divestiture, and a New Start

A major international PLC in the marketing industry wanted to reduce costs in two phases. The first was to engage in global outsourcing. The second was to identify and divest non-core business assets, some of which were making a loss. Greg Knight offered to help.

1.1.1        Vendor Selection

The multi-billion-dollar global organization was operating as multiple regional corporations, each with their own infrastructure and tools, incurring significant cost inefficiencies, and creating roadblocks to collaboration & innovation.

The first task was to select the offshore vendor to work with and build the financial models for the whole global business. Building the models included goals such as reducing the number of data centers from 42 down to 4, rationalizing the number of service desks in the Americas & Canada down to a single English/French service desk in Canada, offshoring application development etc. Once the models had been built, contracts negotiated, and costs agreed, the transformation work could begin.

1.1.2        Getting Underway

Greg Knight decided to focus on the Americas first, where he felt an effective set of processes and operational models could be built and fine-tuned for the other global countries to copy.

Just migrating the data centers was a huge task. Not only did this involve negotiating new storage and service contract details, but a new global network & GNOC had to be built to service the PLC’s needs. The outsource partner had boasted that they had a comprehensive overarching program “mega-plan”, which they did not want to share owing to it being their intellectual property. This did not impress Greg who insisted that the plan be shared and vetted. It turned out that not only was the plan flawed, but the 5,000+ tasks soon fell out of synchronization with the real tasks, and it became completely redundant.

Furthermore, the outsource vendor, while engaging the A-team to sell and launch the outsource exercise, quickly substituted the B-teams and C-teams when it came to the daily execution. Since Greg Knight has a lot of technical expertise, he was able to identify technical flaws in most of the outsource vendors technical solutions, so working with the client's staff, he changed the operating model to insert their own technology expert-approvals into the operating model. This meant that many of the solutions proposed by the outsource vendor were rejected, and several of the staff supplied by the vendor were dismissed by Greg as not possessing sufficient skills for the role. However, catching this early avoided a number of crises further down the road.

1.1.3        Results

Greg Knight pressed ahead in a spirit of strong collaboration and relationship building, both with the PLC and with the outsource vendor, and established procedures and operating models that ensured success. The Americas transition to offshore was completed on-budget and on-time.

The models and processes that Greg had established and proven for the Americas subsequently became the templates for the other countries where the PLC operated, and Greg acted in a consultancy role for those countries.

1.1.4        Divestiture

On completion of the offshore move, the PLC wanted to focus its future efforts on their critical key business assets, meaning that they wanted to divest non-core business assets. This created a situation where 3 separate businesses in the USA had to be divested.

Greg worked with the PLC, preparing IT cost models and marketing materials, then participating in the sales process representing the PLC’s IT groups. After several months, a buyer was found that was willing to take all businesses together,.

After several months of due diligence, during which Greg also worked closely with the buyers, a deal was struck, and the businesses were sold as a single business.

A condition of the sale, imposed by the buyer, was that Greg Knight would work with the buyer for the next 6 months, executing the plans to separate the IT systems of the companies from the IT systems of the PLC.

1.1.5        Separating the IT Systems

A part of the sale had been preparing technical and project plans on how to separate the IT systems from the “mothership”. This too involved some smaller data center moves, network re-design, and migrating business systems such as ERP and Outlook to new entities, etc. After much preparation and planning, including OCM, “D-Day” came, and it was time to switch 750 users to new systems. Greg organized roaming teams who went through the buildings asking everyone if they were having difficulties with migrating their laptops, and providing a helping hand wherever needed. 48 hours after D-day, everyone that was not on PTO had been converted successfully, and the new business was fully independent from the original PLC.

1.1.6        Turning a Loss to a Profit

Greg Knight was then asked to stay on longer. The new company’s CIO said “It is a great help to morale simply to have you around. Everyone has great confidence in you.”. So, Greg started working on a product strategy that would turn a loss-making part of the newly divested business into a profitable part of the business. Working with the company’s IT staff, he helped designed a new product line. However, that new product was many months away, and in the meantime, what could be done to generate revenue?

1.1.7        An Interim Solution

On separating the divested business, one of the things that Greg Knight had requested was that the buyer get the rights to a new multi-million-dollar product that the PLC had terminated just before the sale. For legal reasons, the product could not be handed over, so Greg had then requested the rights to the UI (user-interface) design of the new product. This was granted, and now became critical.

As a stop-gap measure, while the major new product was developed as a multi-year effort, Greg worked with the divested company’s IT department to resurrect a back-end system that had been abandoned eight years prior, and put in front of it the new UI design. An offshore vendor was found who could take the design and re-implement it using a modern Google UI toolkit, creating a prototype in just three weeks (not months). So, three weeks later, a working prototype product was being shown to new clients. This product took off and has been used to generate significant revenue while the major new multi-year product was being developed.