Submission from Group 12: Sahil Arora (G005), Rishabh Gupta (G021), Shabnam Manji (G034), Soumya Pradhan

(G043), S Shyam(G060)

Automation Consulting Services

Problem Statement

ACS, launched in 2011, is a technical consulting firm specializing in factory automation for
industrial manufacturing firms. From its home base in Boston, ACS has expanded in Seattle
and Philadelphia in 2012 and 2014 respectively and acquired a local partnership in San Jose,
California in 2016. In keeping with the executive committee’s emphasis on revenue growth,
each office was managed as a revenue centre, with the partnership as a whole treated as
the sole profit centre. After visiting all four firms as part of their semi-annual practice, ACS’s
founders, Reed, Leland and Goldberg have found out some major issues in all the 4 firms.
Although, these issues are different from one another, but ultimately the root of these
problems is autonomy of local managing partner. Therefore, should they continue giving
such autonomies to local firms or they should formulate a centralized structure?

Analysis

 One of the San Jose partners, Douglas Crowley, was engaged in cross-subsidizing
with the permission of managing partner Kyle Ross whenever the costs of a
particular job were significantly below the contract price ceiling.
 Seattle office relied on a small number of large clients and lacked the client breadth
that had developed at the larger, older offices. Instead of compensating for this
vulnerability with a business development plan, the Seattle partners had been
focusing exclusively on 3 very large existing projects. S a result, when two of them
will be finished within a few months, half of the staffs would have no billable work.
 Boston office had recently won a bid to oversee next generation automation of a
university library system. As ACS has never served in non-manufacturing business
before, it was running over budget and behind schedule.
 In Philadelphia office, the number of dollars being spent on “supporting” activities
had been creeping up, but the executive committee has no way to monitor. A lot
more things are buried in 15% to 20% called “other expenses” under P&L statement.

Recommendation

 ACS should clearly communicate to San Jose office that this cross-subsidizing is not
acceptable and this does not go with company’s vision.
 They should hire a new consultant for the Boston office to supervise library project.
 Besides revenue generation, other parameters should also come in play. The firms
must follow other metrics like customer satisfaction, bringing new clients and cost
optimization. This is applicable for all 4 firms especially Seattle and Philadelphia.
 ACS must make sure that partners will still be motivated to help other offices and
maintain a unified, firm-wide image.