How can the transparency of strategic decisions be increased?

hpo Practical Case Mobility

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hpo Practical Case Mobility

Since 2005, the number of passenger kilometers traveled by rail in Switzerland each year has increased by 13 percent to almost 21 billion. The Federal Office of Transport predicts a further increase by 2040 despite the temporary slump due to the pandemic.

Managing this demand is becoming a major challenge for railway transport companies. The transported customers continuously make high demands and attach great importance to punctuality and a modern and high-quality standard of the rolling stock.

The industry model creates transparency in strategic outsourcing decisions.

More and more railway transport companies are actively questioning their own strategic positioning and evaluating possibilities for a focus on their value creation. The outsourcing of individual stages of the value chain is considered in many cases. The main driver of these considerations is primarily to become more efficient by choosing a specialized outsourcing partner.

Aim of the project

In one specific case, hpo was commissioned to investigate the possible advantages and disadvantages of outsourcing the maintenance activities of a Swiss utility company. What would be the short and long-term effects?

Approach

Together with the customer, hpo evaluated three possible outsourcing options:

the outsourcing of the entire maintenance to a third-party provider;
the outsourcing of heavy maintenance only;
the takeover of the entire maintenance by a jointly newly founded company (joint venture).

In order to better understand the key value creation stages, interfaces, and market participants and to be able to make a statement about the effects of outsourcing on the strategic positioning of the customer, an industry model was developed together with an internal project team. The industry model is an analysis and modeling tool for positioning the company in the market. It is used to identify the value creation stages within an industry. This allows the interfaces between the value creation stages and the market services per stage to be presented in a clear and precise manner. Relevant players (customers, suppliers, partners, competitors, authorities, etc.) can be classified in the industry model and their specific roles made visible. The industry model is seen by customers as a “unique map” to discuss strategic positioning issues.

With the help of the industry model, hpo was able to show the client possible synergy and conflict potentials of the individual outsourcing variants in a transparent and clearly understandable way. Other criteria which were part of the evaluation included:

the complexity of the control system;
the dependency on potential suppliers;
the possible cultural challenges and tensions at the interfaces between the railway transport company and outsourcing partner;
possible effects on the reputation of our client.

Results

The analyses enabled our customer to draw on a much broader information base and thus make an informed decision about the future of maintenance.

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hpo makes companies more successful and more innovative. The strategy consultancy for enterprise design boasts more than 25 years of experience in the creation of strategies and organisations spanning many different industries. The management consultants at hpo specialise in the meticulous development of strategies, processes, business models, innovation and culture, and in accompanying the transformation.

The hpo design approach enables companies to better cope with strategic and organisational challenges and to realise substantial competitive advantages. The basis of the industry-spanning design approach is an academically grounded methodology with which high performance organisations are shaped and which is continually further developed with the latest findings from research and practice.

The management consultants at hpo come from a commercial or technology background and stand out with their high level of analytical and emotional intelligence. They are passionate in their dedication to the client’s concerns and enjoy working in a team.

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