Cash & Capital Management - Research & Development Optimization

  • Until recently, many executives regarded managing cash flow and liquidity as tactical functions left to administrative managers. Yet when the global financial crisis choked off credit, it became clear that executives needed to think more strategically about cash management and capital allocation. Our perspective is that companies that aggressively manage cash and liquidity create opportunities to prosper regardless of what is happening across the broader economic landscape.
  • ExpertActions helps clients around the globe in liberating cash, increasing the velocity of capital through the system, instilling a disciplined approach to driving cultural change. In most cases, the effort is self-funded with very short payback periods.
  • We work with clients across the liquidity spectrum. This includes helping firms with strong balance sheets improve resource deployment across lines of business to generate higher and better returns for investors. At the other extreme, it encompasses recognizing if and when an imminent cash pinch will threaten an organization, and devising ways to address the issues, no matter how severe.

Our approach combines strategic, tactical and organizational elements to ensure quick wins and creates a dynamic process and new, ongoing organizational capabilities to ensure sustained results:

  • We begin with an assessment of whether case and capital are aligned with strategic principles, followed by a deep examination and prioritization at the product level. This process typically begins with charting a clear cash picture of the receipts and disbursements over a two month period to gain visibility into the real-time differences between expected and actual results. Detailed analysis of any variances highlights the differences between one-time, timing-related and persistent variances. Persistent variances are a warning sign that could indicate emerging problems in product lines, customer channels or vendor relations.
  • Visibility leads to addressing problems actively before it is too late. This can have strategic implications, as shown in the chart below :
  • Once we have this visibility, we model various scenarios informed by daily, weekly or monthly cash-flow and liquidity measures. These create a foundation for contingency planning. For instance, they can provide powerful insights into which rivals are vulnerable, which customers are strongest and which vendors might not survive. Unlike analyzing accrual statements, which are like reading yesterday's news, cash focused analysis is forward-looking.
  • Firms have relied on ExpertActions's cash and capital management expertise to help transform capital and liquidity management into a strategic platform of differential investment. Indeed, the downturn has only underscored the need for ongoing liquidity discipline and deep understanding of cash cycles. These inform the discovery of new and better ways to deploy scarce resources that strengthen business units, create desirable products, serve new geographies and meet customer needs better
  • ExpertActions & Company has helped many leading companies, across a range of industries, maximize their returns on R&D investments. But delivering superior returns often requires transformational change: treating R&D as an integrated innovation system rather than as a functional silo.
  • In our experience, we find that complexity slows innovation. Among the typical complexity pain points our clients experience: too many projects that are not fully aligned with company or product strategy, too many processes that may not be consistently followed or are not delivering what wins in the market, too many decision makers without a single point of accountability, and too many sites, capabilities and design methodologies without a clear understanding of what drives competitive advantage.

We work closely with our clients to untangle their complexity and install a clear and concise, repeatable R&D formula. Specifically, we enable them to innovate rapidly and spend more wisely by helping them to:

  • Understand the customer ecosystem and prioritize customer needs
  • Build innovation roadmaps to deliver on those customer needs
  • Align processes to deliver on a differentiated performance in time-to-market, cost and quality
  • Optimize project team resources, organizational structures and infrastructure allocation
  • Build a global footprint and install continuous learning systems

The outcome of our work is a finely tuned R&D engine delivering superior returns.