2009 Jan 29

Referral: Web-based Business P&L Operations & Optimization

My colleague, Jonathan Vanasco, has written an excellent piece on web-based business P&L operations & optimization. I have had the honour of contributing feedback to the piece. I strongly recommend reading it here.

2009 Jan 29

Venture Capital - where does it fit in?

Recently, I had the pleasure (take that with a grain of salt) of discussing, with several colleagues, the pros and cons of taking venture capital investment. Everyone seems to have an opinion. I have seen articles published that VCs are the unsung heroes of modern American capitalism. I have seen others that vulture capital would be a better term. Interesting how the world shifts. Until the 1980s or even early 1990s, pretty much no one outside of the business knew what venture capital was, how it worked, or where to get it.

2009 Jan 11

Cost-savings and cost-cuttings - the ways to reduce expenses

Clearly, the United States (and much of the rest of the world) is in a recession, and has been for some time. Opinions differ greatly as to how long the pain will last - some say weeks, some say months, others years (and some say decades unless we adopt their solutions, whatever they are) - but it is clear that corporate revenues have dropped significantly and the pressure on profitability has increased dramatically.

2008 Nov 20

Operations and the bottom-line? Part II

In the previous article, we laid out the main areas in which the efficiency and effectiveness of operations within a fairly small back-office finance department can impact the bottom-line. In this follow-up article, we will see just how severe the impact can be through a case-study, complete with actual numbers. The Patient The patient, firm X, is a $15MM annual revenue firm, so larger than a start-up, but still on the small side.

2008 Nov 8

NHL and how not to transition to new media

Before continuing back-office operations, we will take a short detour into a case study of how not to transition to new media. As we all know, media properties have been suffering greatly, especially broadcast media. Advertising revenue is down, and enormous numbers of viewers have moved to what is termed new or interactive media, i.e. the Internet. Most media firms have been trying, with varying degrees of success, to find ways to make money on the Internet.

2008 Nov 6

Operations and the bottom-line? Part I

As an expert in operations efficiency and effectiveness, I am often asked how much of a difference back-office operations can make to a firm's profitability? After all, sales are what drive any business, and so the front-office should be the primary focus. While I agree wholeheartedly that sales drive a business - one of the best stories I have heard in this regard is of a startup where everyone had a little box on their desk that went "

2008 Oct 19

Predictable Failure: a case study in a bad merger

As a follow-up to the previous discussions, we will analyse a particular merger that was looked at before it occurred - a rare event - and understand how we knew well in advance it was doomed to failure. Background A number of years ago, I was asked to analyze two firms contemplating a merger. Because of confidentiality considerations, I cannot give the locations, names or industries of the firms. The details I can provide are as follows.

2008 Sep 25

Who do so many M&A fail?

In an earlier post we discussed what are the reasons that a firm, at least theoretically, decides to merge with or acquire another firm. These basically fell into two categories, horizontal integration and vertical integration. And yet, we know that a huge number, 70% to 80% or more, depending on who you ask, fail, most miserably. A question that recurs regularly is why these events fail, and, by extension, what can be done to reduce the failure?

2008 Sep 15

M&A justifications: so what?

In an earlier post, we discussed the justifications, at least theoretically, for a merger or acquisition. Of course, like any financial event, whether buying a company or buying an iPod, the numbers have to make sense. Put in other terms, you have to gain more out of it than you put into it (in business terms, being profitable), otherwise you simply do not do it. In this discussion, we will examine some of the financials behind these events, and how they are justified.

2008 Sep 4

Skype & eBay - an introduction to and case-study in mergers and acquisitions

Earlier today, someone posted on a mailing list an attempt to understand why eBay bought Skype in the first place. For those who have forgotten, eBay, the online auction giant, bought Skype, the VOIP/IM newcomer with around 57MM registered users at the time, for $2.6BN in 2005. The poster wanted to understand why they bought Skype, and how they feared Skype upending their business model. This article is a short introduction to the reasoning behind most acquisitions, in an attempt to improve understanding.