Case Study:
Enterprise Software Company
Background
Venture capital funded, global enterprise software company in the Human Capital Management space with more than 720 customers in 15 countries.
Business challenges on arrival
- The Company had burned through $60 million in the prior two years, had an ongoing monthly burn (net) in excess of $3.5 million, and had less than four weeks of cash left
- $4 million of non-renewable term debt maturing in two months
- An undisciplined culture with no financial controls, a headcount of approximately 400, the wrong strategy (to build an exchange for human labor), an obsolete technology platform, and products that did not work
Actions taken
- Rationalized the product lines and streamlined the management team thereby eliminating a lot of unnecessary overhead and inefficient processes (headcount reduced from over 400 to under 100)
- Built integrated business plan across all functions and put metrics and reports in place to measure results and hold everyone accountable
- Established incentive compensation structure to drive behavior and create a performance culture
- Established a go-to-market agreement with Accenture, and a global marketing alliance with Microsoft
- Signed a European distribution and services partnership with Parity, a UK public company
- Led the strategic acquisition of another software company, thereby achieving a market-leading position
- Low margin legacy solutions were "sunsetted" and run on a cash harvest basis
Results
- In only 16 months the Company became EBITDA positive
- Reduced total operating expenses from $6 million per month to $1 million per month
- Grew the Company's top line by 25%