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Second opinion (Technology advisory)

Industrial recycling services

ERP & CRM vendor solution

Our work

The investor was seeking to transform the company into a fully tech-enabled services business to improve EBITDA and increase the multiple at the next capital event.

The Management Team was tasked with identifying the optimal solution: either extend the existing CRM & ERP systems, invest in a new third-party system, or build a proprietary service delivery system.


As part of their research, the Management Team had commissioned a systems integration provider to identify the best solution and propose an implementation plan with pricing. Whilst the provider worked closely with the company to review its current processes, a lack of detailed analysis in their subsequent proposal suggested that they had predetermined a technical solution to suit their own capabilities (rather than suit the best needs of the company). As a result, the Management Team was not in a position to make any recommendations to the board.


So we checked the vendor’s review of the operational processes and potential business process redesign, which we found to be comprehensive and accurate. We moderated some of the stated efficiency gains and the service improvements that would be achieved through implementing any ERP and CRM system. We then reviewed the suitability and pricing of the proposed technology options, which is where identified that the vendor’s preference would not deliver the best sustained increase in EBITDA, and that the alternative solutions had been ‘glossed over’.


Outcome

Our analysis was then used by the Management Team to brief the board and to identify a more effective solution from a different vendor, at 23% lower cost.

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