4. Margin Erosion

Tech hardware   Turnover £250m

Margin erosion

Need: add 5 pts back to margin

Outcome: Margin stabilised and returned to target over course of one year – over £12m pa profit improvement

  • Processes: authorisation changed to stop discounting; contract management control processes changed to flag violations prior to signing
  • People: Re-training on calculation of deals; disciplines developed to discourage discounting; reward and recognition for higher margin
  • Systems: reporting developed to show low margin/loss making support contracts –contracts renegotiated or cancelled