IT application rationalization effort fails to net $30M savings
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Total IT cost exceeds 5% of total expense
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CFO departs
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Hiring slows significantly past mid-year target
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New data center behind schedule by at least 4 months
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Intolerable
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Possible
1
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Probable
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Semi-annual conference is the primary event for revealing new product lines. Conference may double prices given the number of new entrants into the market.
Marketing
Acceptable
Possible
None possible
Reprioritize marketing budget to accommodate FurnConf expenses
FurnConf announces new prices beyond $50K per vendor
Sean Donoghue
No-cap social ad budget means aggressive bid practices could send spend beyond $2M
Marketing
Acceptable
Likely
Develop dashboard for social ad spend, to be refreshed weekly
Issue directive to cut all social ad spend by 10% and identify campaigns with unprofitable (LTV<CAC) metrics
Social ad spend > $2M
Sean Donoghue
Declining employee morale may result in increased employee turnover
HR
Tolerable
Possible
Establish weekly leadership Q&A to boost transparency
Launch deep-dive employee interviews and survey to identify root cause of employee turnover
HR leaders deem turnover too high
Howie Liu
Latest difficulties on manufacturing floor could result in TAT declining past 3 weeks
Engineering
Tolerable
Possible
Develop dashboard for TAT to be refreshed weekly
Root cause analysis for TAT, renegotiate for better SLA in supplier contracts
TAT > 3 week
Sean Donoghue
CompCo, our primary competitor in the bedroom furniture market, is rumored to have developed a product line that they will price at $175 for the 2018 season. This will undercut our $195 line.
Marketing
Tolerable
Likely
Seek out more information from our connections in the industry to confirm or gain more information on the specific product they are launching
Develop new positioning around quality/luxury
CompCo announces new product at $175
Sean Donoghue
Print services have gotten more expensive in the last 18 months. May require a review of print service demand if print marketing becomes too expensive
Marketing
Tolerable
Likely
Perform light diagnosis of distribution of current demand of print services
Cut all print marketing unless deemed absolutely necessary by team leads
Spend on print services exceeds $2M
Sean Donoghue
Early signs that revenue may miss in Q3 as it did in Q2. Need to prepare early for investor relations activities if this happens
Leadership
Undesirable
Unlikely
Perform quick scan for low-hanging fruit revenue opportunities by region
Release investor guidance for revenue target miss and outline go-forward actions
Revenue misses Q3 target
Shani Taylor
MaterialCo, based in Singapore, is currently our largest supplier for our home furniture business. Given market movements, there is potential that MaterialCo raises prices across the board by at least 10%
Supply Chain
Undesirable
Possible
Actively begin negotiation process to reduce impact of price raises across the board. Consolidate vendors for higher leverage.
Begin public RFQ process for a new supplier to increase pressure on MaterialCo to maintain prices. Launch cost-cutting effort to cut core operational costs (IT, support functions)
Wood commodity prices up at least 10%
Howie Liu
As we have allowed each department to purchase SaaS licenses on an as-needed basis, we face increased risk that SaaS costs become unsustainably high due to lack of centralized purchasing.
IT
Undesirable
Possible
Issue letter to team leads warning of potential overspending on SaaS licenses. Establish directory of existing services to encourage consolidation
Conduct rapid consolidation of duplicate services and eliminate unnecessary licenses
Monthly SaaS cost exceeds $300K
Sean Donoghue
APAC has been facing continued losses, which is expected given our recent entry, but could exceed $100M, stated in the original strategy plan as a trigger point for a change in strategy
Leadership
Undesirable
Likely
Perform quick scan for low-hanging fruit revenue opportunities by region
Release investor guidance for revenue target miss and outline go-forward actions
APAC expansion exceeds $100M loss at Q3
Sean Donoghue
Ongoing effort to rationalize IT apps estimated to produce $75M in savings, but savings number eroding by the week.
IT
Undesirable
Likely
Request weekly update for app rat initiative
Reset initiative with more forceful standards for savings
Est. savings < $30M
Sean Donoghue
Growing demand for IT services has resulted in IT slowly growing towards the 5% of total expenses mark. If this happens, we need to launch a diligent cost-cutting effort to manage this growth and position ourselves for more sustainable IT cost growth
IT
Undesirable
Probable
Launch pre-emptive diagnosis to confirm potential savings opportunities in key levers
Extend diagnosis for deep, lever-by-lever analysis
Total IT cost > 5% * total expense
Howie Liu
CFO Cheryl Williams may depart given recent division among leadership. Would require a plan for an interim CFO and search for new CFO
Leadership
Intolerable
Unlikely
Leadership summit to strengthen relationship along the divide
Immediately retain HireCo to begin CFO search and transition COO and finance SVP to fill CFO roles
CFO pens resignation letter
Howie Liu
Target of 100 new roles is aggressive given hiring standards and faces risk of not being met
HR
Intolerable
Possible
Broaden hiring sources and encourage referrals via referral bonuses
Increase referral bonuses to $5,000
At end of Q2, hiring hits less than 80 new roles
Shani Taylor
Construction in Ireland location has long been delayed by 1-2 months but delay may extend beyond 4 months in the next 5 months
IT
Intolerable
Probable
Engage with developer directly and encourage tightening the relationships
Begin public RFQ for developer to finish developing data center
New data center exceeds 4 month delay at monthly checkpoints
Shani Taylor
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Employee turnover becomes unmanageably high
Loaded
Short Name
Employee turnover becomes unmanageably high
Description
Declining employee morale may result in increased employee turnover
@
{name}
Areas of Impact
HR
Potential Impact
Tolerable
Likelihood
Possible
Mitigation Plan
Establish weekly leadership Q&A to boost transparency
@
{name}
Contingency Plan
Launch deep-dive employee interviews and survey to identify root cause of employee turnover