United Kingdom

Business modelling for success in challenging times 

Planning for the success of your business has seldom been more complex. Given recent economic conditions, you would expect a continued focus on managing businesses more tightly. This is just what we found in our survey of nearly 3,000 business leaders, who highlighted cost efficiencies and cash management as their top two issues. But following these in third and fourth place were interests in transactions and the strategic issue of responding to major business model changes.

Transcript:

Management today face all sorts of complex issues.  We have lower customer demand, we have changes in supplier base as they face the same sorts of issues and we've got fluctuations in exchange rates that we just can't predict and haven't seen for some time.  So actually it's a really complicated world out there.  What's really important, I think, is that management have got the ability to predict how to best improve the performance of their business.

 

So KPMG's Business Modelling team develops sophisticated models that reflect the actual performance of businesses under different scenarios.  So they really help organisations understand how their business might perform in the future, based on changing market dynamics and the decisions that they need make today in order to best take advantage of those opportunities.

 

And that really gives them great confidence that they can make the best decisions today to navigate through the different environments that they're facing.

KPMG's Business Modelling team are really good at going into businesses and quickly understanding what it is that drives performance and then developing the models that support the analysis.  We've got a really successful track record of working with clients and doing this and we've worked across a whole range of sectors on all sorts of different issues.  What I find really, really great is when I go back to clients and they're still using the same tools that we've developed, but to answer really quite different questions to help them navigate their business.

We address all of these issues through our business modelling services:

 

Decide: strategic decision


Deciding the future strategy of the business depends more often than not on the company’s ability to:

 

  • Evaluate planned strategies, for example new sales channels and multinational operating sites. We develop strategic options modelling, used for evaluating multiple options, scenarios and sensitivities quickly.
  • Understand the profitability of new and existing services and products. Our product profitability modelling service focuses on investigating the impact of product sales or service activity on income, operational expenditure and overheads.

 

Shape: shaping the business


Shaping the business so it is fit to meet its future strategy and objectives involves bringing together the right capabilities, assets and expertise through transactional activity and understanding the impact of synergy or separation. We support this process through:

 

  • Transaction modelling, both of individual assets / business units considered for acquisition or disposal and the overall impact on the merged organisation or joint venture structure.
  • Debt structure modelling, investigating the impact of debts, covenants and other funding sources on the profitability and sustainability of the business.

 

Manage: managing the business


Managing the business, as business as usual or in a crisis situation, depends on measuring the impact of current or future changes in the drivers of business. To do this, organisations need to:

 

  • Develop realistic  forecasts to  manage capital spending, cash and regulatory compliance better, a need which we serve through business planning and  modelling.
  • Plan to meet the requirements of multiple contracts and customer expectations. We support this through contract management modelling: breaking down the business forecast and reporting for each contract or customer segment.

How we can help

Modelling across the sectors