A division of Archemys Holdings focused on resolving Local Government’s execution paradox
Budget & Funding Innovation
From our turn-around and value re-engineering background, we bring a different perspective to the issue of structuring the financing of commercial opportunities. Typically our approach is to look at current allocation of operational and capex funding.
There’s a great deal of room in most Councils to re-assess their approach to how opportunity is funded. Typically we’d begin with the goal of aiming to make every commercial venture cash efficient. Where revenue can be generated we’re ensuring that it is cash flow positive as quickly as possible.
In the case of service delivery, again we assess the ‘use-of-cash’, usually including the business model in related areas. Within our Venture Lab, we devote a significant amount of time walking the participants through the underlying processes.
Complementing the ‘proactive budget’ concept, additional funding options are thereby increased. Ranging from invest for RoI through to 3rd party shared returns based on validated DCF – a strategy that Archemys has adopted in certain ventures.
We often refer to ourselves as a ‘nuts & bolts’ company – again, our turnaround/value engineering expertise showing! Generally we can re-wire management mind-set and business models fairly quickly. However the deliverable gains are forestalled or even lost due to poor execution.
The ‘why’ and the ‘what’ are understood and accepted, management have broadly bought in but . . . the ‘how to’ shortfall causes drift and eventually inertia to set in and opportunity cost needs to be recognised. We call this ‘leaving cash on the table’.
To help Council management get around the apparent execution brick-wall, we’ve invested in turnkey models that can be quickly implemented. Thus far, these include:
- Independent Living
- Business Performance Club
- Cost Reduction Company
Each can be own-labelled by the Authority with specialist resources in-sourced; either on an interim or concierge basis. A more innovative strategy, combining these turnkey ventures with innovative funding can be the basis for a collaborative venture where Archemys can actively participate in its success, rather than simply as a services provider.
Councils face yet a further paradox.
They have to decide whether a commercial venture is resourced by current management, whilst back-filling all or part of their ‘day-jobs’, or different staff are allocated under the part-time supervision of these managers – until they can make a permanent move.
Hence the oft heard cry of “but we don’t have the resources”.
As part of our management re-wiring exercises we demonstrate the difference between resources and resourcefulness. Given the viability and size of the opportunity, the issue is almost always one of resourcefulness.
Our provisioning experience with early stage and spin-out companies the private sector, has enabled us to build resourcing models that we’ve adapted to Local Government.
As just one example we’re setting up, training and equipping licensed fulfilment partners within the business community. Another is the implementation of Provisioning & Purchasing Exchanges, based upon turnkey subscriber services.
Obviously, within this short briefing we’ve only skimmed through how Archemys Ventures is able to collaborate with Council Management – innovatively ensuring that opportunities for revenue and efficiency are not left to wither on the vine.
As already mentioned one of the most effective ways of identifying the best fit approach for any Council is via the Venture Lab. As this also delivers an Outline Business Case, this would represent a double RoI and with a low cost/risk profile.