Client success story

Uncovering efficiencies to improve margins, operations and productivity

A high-performing safety and security company in the U.S. with a leading position within its industry saw an opportunity to drive exponential efficiencies to increase profitable growth. As a result of several key acquisitions, the company had expanded its scope and geographic reach to multiple branches across the country. However, it historically relied on acquisitions to achieve top-line growth, rather than driving efficiencies in areas like pricing, direct operations and workforce management.

The challenge: Driving EBITDA improvements

While our client’s acquisition strategy led to top-line growth, it also resulted in decentralized operations. This, in turn, led to varied management practices, without a workforce management program in place for its thousands of technicians. The company had generally underinvested in technology, so employees were still relying on manual support activities. In addition, they were dealing with more than 1,000 active vendors, with inconsistent purchase prices for identical items, and a wide variance in their services prices given the absence of a centralized pricing committee to support their branch network.

The company brought in KPMG in Canada to help drive efficiencies using KPMG Elevate, a solution to help identify and deliver rapid EBITDA improvement through a top-down performance optimization strategy and bottom-up implementation.

The opportunity: Identifying efficiencies

The KPMG team uncovered a profitable business with great potential to help improve margins. During a rapid assessment over six weeks, we identified more than US$20 million in potential EBITDA uplift across five workstreams, which would help to streamline pricing, improve workplace productivity, optimize procurement spend and transform the business through technology.

For example, by investing in digital transformation, the company could reduce manual labour for support activities and enable long-term EBITDA improvements through the selection of enterprise resource management (ERP) and human capital management (HCM) systems.

After finding significant upside opportunities, the company engaged KPMG to help deliver the upsides with a limited time window of opportunity.

The outcome: Sustained benefits over time

Within 12 months, our KPMG team helped the client realize more than US$13 million in EBITDA uplift, with an additional US$26 million forecasted to be achieved as a result of the processes put in place. This involved creating a tier-based pricing model based on a value-based pricing methodology in most of its branches. The team also helped to set up a strategic procurement function, with a panel of 28 preferred vendors, and created a 30-vendor initiative program to sustain those benefits over time.

In addition, we helped create a workforce productivity program, which included developing more than 40 documents and tools to help technicians do their jobs more efficiently. And, to reduce manual support, we assisted the company in executing RFIs for ERP and HCM systems across six vendors.

This transformative journey not only bolstered the company's financial standing but also enriched the lives of its employees. With new tools, branch managers and technicians saw a shift from manual to digital, making work less burdensome and more effective. And generally, the KPMG's Elevate program streamlined operations, helping to make the company a more robust and efficient organization.

The company's transformation was not just a story of improved margins and operational efficiency, but also a testament to the power of change in enhancing the work lives of its people.

Contact the KPMG team to discuss your business objectives and how our network of specialists can support your organization.

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