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ENSR International Case Solution
Laws govern by the EPA has initiated the demand for environmental consultants. ENSR International case discusses the developing competitive scenario in environmental consulting firms and the evolving vendor selection process of clientele. ENSR faced the challenge of stagnant sales and declining utilization hours of consultants, and thus came to three strategic alternatives, implementation of key accounts program; Revitalizing BDO program; and restructuring compensation plan. Each of these strategic alternatives is assessed in detail, and there pros and cons are also discussed. After assessing each strategic alternative, most suitable option was recommended, and the justification of the selection parameters was also provided in the recommended action plan. The cause and effect relationship of the alternative is also discussed in the action plan.
Following questions are answered in this case study solution:
Introduction & Problem Identification
Strategic Alternative 1: Key Accounts Program
Strategic Alternative 2: Revitalizing BDO program
Strategic Alternative 3: Restructure Compensation Plan
Recommended Action Plan
ENSR International Case Analysis
1. Introduction & Problem Identification
ENSR is an environmental consulting firm with its headquarters situated in Westford, Massachusetts, and employing around 1,200 people all over the world. Company has 45 regional offices in United States of America and 25 offices worldwide. The firm provides environmental services in domains such as Air Quality, Water Quality, Process Engineering, Due Diligence, Environmental health & Safety, Remediation / integrated site Closure, and Capital permitting / Impact assessment. Majority of its revenues are contributed by two services; Remediation / integrated site Closure, and Capital permitting / Impact assessment. Presently company is facing stagnant sales, and Bob Peterson (CEO and president of the company) is considering cutting its employee base to improve its operational performance. Three different plans were suggested to deliver sales; to implement the Key accounts system, to revive Business Development Officer Structure, and last but not least to reconsider firm’s compensation plan that would assist in sales progression.
2. Strategic Alternative 1: Key Accounts Program
The first alternative that would strategically align firm with its objective is to implementation of Key Accounts Program in the company. The solution was provided by Kathy Anderson, SVP, Corporate Marketing working under the supervision of Bob Weber, COO of ENSR. The usefulness of the program is that the resources would pool in, and a devoted team of sales and marketing would have dedicated clientele. It’s observed that 85 % of the business is generated by the previous clientele, so it is utmost important to have a stronger bond, and in Key Accounts systems each client will be served by a dedicated team, irrespective of geographical distribution, which in result would strengthen the bond between the two companies and business would certainly grow. The landscape of consulting services is evolving, and client firms are limiting their vendors and sole source contract are getting frequent, while the vendor selection process is developing to cut time and cost by selecting vendors that had worked with the client previously.
The downside of the Key Accounts Program is that whole organization would be restructured as presently the organization is structured on regions (on a geographical basis). A new compensation plan would be required; training and counseling would be required to aware other consultants about the program, which in result, increase the operational cost. Also, the geographical spread would expand the area of operation for Key Accounts Program and company will have to incur the cost of travelling involved in, which ultimately affect the operational performance of the company and net income would turn down further.
3. Strategic Alternative 2: Revitalizing BDO program
Bob Weber, Chief Operating Officer, is of the opinion to reconsider the Business Development Officer (BDO) Structure again and implement the same in the organization. The construction of the argument is based on that BDO structure would help the firm to boost sales. The operation of BDO program is to hire sales staff that would interact with the clientele and provide information regarding the services that ENSR offers. It is estimated that the BDO program would boost sales rapidly for the reason that more clients would be taken on board. Another positive outcome of BDO program is that the consultant’s utilization rate would increase dramatically because they would have more work to perform. This will also enhance per consultant efficacy, and hour’s utilization would be on optimum level.
There are a number of concerns raised against BDO program. ENSR implemented the same program earlier and due to its least effectiveness it was abolished few years ago. The basic concern raised against the BDO program is regarding the credibility. According to Anderson Business Development, officers cannot reflect the same credibility as required by the business.
Hiring additional sales force will burden the payroll and financial performance of the company would get affected. Also, there is no significant indication that the BDO program would enhance the operational performance of the firm. Considering the claims of sales enhancement than there is no strong justification that sales would grow further. Though it had been abolished earlier, and implementing same again would give negative signal to stakeholders that management is confused and has no clear strategic direction.
4. Strategic Alternative 3: Restructure Compensation Plan
Bob Kelleher, SVP Human Resources, suggested reconsidering compensation plan, which may further improve the performance of consultants. According to Kelleher the performance of the consultants is judged on the criteria of sales, leads and billable hours as consultants do more things that had a positive impact on the firm’s performance, but they never get reflected on their compensation plan. Kelleher also suggested reevaluate compensation plan and to incorporate subjective evaluation beside objective evaluation.
The result of the subjective evaluation on the consultant’s performance could be seen vividly as more seller-doers would put-in efforts to achieve task and would work in teams to enhance their performance. The enhanced performance would result in accomplishing regional targets and consultants would receive bonuses. The bonuses would be provided on the basis of the target completion and selling activity, to generate more business. The outcome of the strategic alternative would be that sales would spur and hours utilization would increase, which ultimately improves the financial performance of the company.
The strategic alternative suggested by Kelleher is very subjective and has no concrete outcomes that productivity would increase, and the sales would spur. Building performance based culture would require more time and presently the firm is in no situation to delay it further. Also, making incentive plan subjective would cause confusion, as there would be no set criteria for the subjective evaluation and each CSC Manager will evaluate employees accordingly, which may reflect unjustified preferential treatment during evaluation. This preferential treatment may affect payroll negatively, and financial health of the firm may also get affected.
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