Exploitation of grossly undeveloped or underutilized assets generates value. Maps of business processes and customer networks provide insight required to identify and monetize the value in those assets.
Technology and social networks are among the tools that enable consultants to help their customers generate and monetize value. The return on misused assets can either create a substantial monthly cash flow or produce lump sum payouts.
The following example and several others are discussed here. Two noncompetitive, privately held manufacturing companies are collocated in regional business park. In fact, their owners often meet and talk at a monthly business forum. Both companies manufacture and deliver their product with their own truck fleets throughout the local region. They both are challenged by lower product sales and higher delivery costs.
A consultant, aware of the economic conditions faced by the two firms, proposed to help them for a share of the savings generated. The proposal was simply put: “IF I can save you a significant amount on your operating costs, at little or no cost to you, would you be willing to pay me 15% of what I save you? Otherwise, if I cannot help you, you are under no further financial obligation.”
The two owners agreed to the proposal. Business process maps we reproduced that revealed similarities and differences between the two companies.
Figure 1: Business Process Maps of the two Companies
The consultant explained that the two companies were part of a larger business ecosystem. Customer network map were developed to visualize the customers in the business ecosystem.
Figure 2: Customer Relationship Map for the two Companies
Product distribution, the common aspect of the two noncompetitive businesses, was confirmed by the Business Process Maps. Furthermore, the Customer Network Map confirmed a set of common customers. With these facts, the consultant opened a discussion that produced a win-win solution for both companies.
The larger company agreed to deliver the smaller company’s product for a fee. The win was additional delivery fees and the operational economy of fuller loads. This agreement enabled the smaller company to sell its delivery fleet. The win was asset reduction and lower delivery support costs.
Figure 3: Business Process Map with Shared Distribution
The consultant received a lump sum payment of 25% of the sale of the truck fleet of the smaller company. In addition, the consultant was contracted to investigate:
- Other common aspects of the business ecosystem such as common suppliers
- Integration of supply and delivery processes