Skip to content

Service Providers Accrue Enterprise Value Benefits from All Clients

The trick is to promote a culture of innovation and ultimately capture the best productivity gains from the branches and replicate them across the entire company.

Published on

Jun 14, 2011

By Brett Norgaard

Every branch office in an organization can be thought of as “an experiment in productivity” according to Frank Troppe, author of “Branching Out,” the definitive book on branch office success. The trick is to promote a culture of innovation and ultimately capture the best productivity gains from the branches and replicate them across the entire company. Troppe goes on to develop a formula called, Replication Rule 144X, which dollarizes the Enterprise Value of effective branch-based innovations. Here’s how it works. In a 1000 branch based organization, let’s say that branch #273 invents a way to save $100/mo. through the development of a process such as the on-boarding of new branch personnel, the streamlining of a claims process, or the coordination of requesting and fulfilling equipment, materials, and space for ongoing seminars.

Here’s a breakdown of the formula:

$100 (monthly savings) X 12 months = $1200 Annual Savings per Branch

$1200 (Annual Savings per Branch) X 1000 Locations = $1,200,000 Annual Savings for all Branches

For a public company, let’s assume a Price to Earnings (PE) Ratio of 12 (this is an average—it could be higher or lower)

$1,200,000 (Annual Savings for all Branches) X 12 (Average PE Ratio) = $14,400,000 in increased Enterprise Value

Not too bad for a $100/mo. savings in branch #273 within an organization that can recognize, capture and replicate this innovation. An automated request and fulfillment system like Kinetic Request bundled with Kinetic Task can certainly capture the process and present it for broad usage across an organization. And, there is an integration capability to connect to enterprise systems like IT, HR, Procurement, and Facilities to broaden the scope and scale of the innovations.

As exciting as this is for a single enterprise, it is particularly appealing for a service provider with multiple clients who may each have thousands of branches, stores, offices, centers, clinics, etc. What we are really talking about here is a multi-tenant service request and fulfillment platform that can be configured for each client and where the innovations—captured as processes within service items—are portable and “replicatable” between branches and clients.

To the savvy service provider innovator, Replication Rule 144X is just the start…

 

 

Latest Articles

Unlocking Developer Efficiency with the Right Tools
Complex Workflow   |   Aug 20, 2024

Unlocking Developer Efficiency with the Right Tools

Choosing the perfect Integrated IDE can streamline workflows and boo...

React’s useContext vs Redux: Global State Cage Match
Complex Workflow   |   Aug 13, 2024

React’s useContext vs Redux: Global State Cage Match

This post explores the critical distinctions between React’s useCont...

A Wonderful Front-end Training Experience in Beautiful Baltimore
Complex Workflow   |   Jul 30, 2024

A Wonderful Front-end Training Experience in Beautiful Baltimore

We recently had the pleasure of hosting a special onsite front-end t...