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Overhead efficiency and cost reduction

Traditionally group purchasing agreements had been established very effectively for all categories of building materials and excellent relationships had been forged with suppliers, who became true business partners.

The Board had set objectives of improving business efficiency and reducing cost levels. We therefore established a team comprising Group Finance Director, nine regional Finance Directors, Group Services Director, Group Supply Chain Manager and a number of existing suppliers, to investigate a number of overhead areas and establish group purchasing agreements.

The overhead areas were selected based on maximum business impact and potential suppliers were contacted. Reviews were undertaken, proposals presented and where appropriate new suppliers were introduced. The changeover was carefully managed to ensure quality of product and service was continued, and in many cases this was improved.

Throughout this change project, opportunities for improving process efficiency were actively sought and where suppliers offered on-line ordering systems these were implemented.

The areas of expenditure reviewed totalled in excess of £12m annual spend and the cost reductions achieved were £3m per annum.

“The move to establishing group purchasing agreements for overhead areas was challenging but the benefits significant enough to follow the change through to effective completion.”

Martin Bevan, Group Supply Chain Manager
Westbury plc 2005

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Customer and sales efficiency

Westbury had over 150 building sites, each with its own sales office where all customer details and sales were processed manually. An automated sales administration system was required to incorporate all customer data and reporting requirements to improve the efficiency of the sales process for customers, front-line sales personnel and back-office personnel based in regional offices. The sites would also need to be connected to the regional network and server ensuring information was real-time.

Early on in the change process, several potential solutions were discussed with a number of service providers. An innovative 'Office in a Box' solution was preferred. This allowed all the required hardware to be called-off when a site opened, then delivered to site and commissioned. Network connectivity was provided using a service that capped the 'call' charges, enabling the costs to be determined and appropriate budgets set.

The initial business analysis was undertaken by visiting several sites to determine requirements, discussing the process with the sales teams. A specification was drafted and agreed and then a technical specification was produced for a third-party software company to undertake the programming and database changes. Extensive testing was undertaken with a six months pilot on three sites. Following this pilot, changes were made to the system and training was undertaken for 250 people, with full on-line documentation. The training of sales personnel was a major undertaking, as many people had not used computers before and the geographical logistics proved to be a challenge.

The software development was managed by the Software Applications Manager, who was a key member of the overall change team. Implementation was undertaken on a regional basis, covering circa 20 sites at a time. A year after the implementation, every site was visited and further enhancements were identified. There was an ongoing process of discussion and software improvement.

Significant business benefits were achieved by the automation of the sales administration process, providing sales and marketing information previously unattainable and improving the customer experience at the point of sale.

“Integrated management information systems were developed by engaging with stakeholders, questioning requirements and expectations, implementing changes effectively and 'of course' to schedule. The single biggest change was the introduction of sales systems to 150 remote locations - considerably improving the customer experience when buying a home.”

John Bennett, Group Finance Director
Westbury plc 2005

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Aligning IT with the business

Following changes in Board-level responsibility at Westbury, the IT department was restructured and resources reduced, leading to poor morale and motivation.

A new leadership style was provided and using the recommendations of an externally provided systems audit, the change agenda commenced:

• internal processes and controls were introduced, including an information security policy
• relationships were established with Managing Directors of operating divisions, creating open dialogue and opportunities to change business systems
• effective relationships were established with key third parties and specific support services outsourced
• regular updates were provided to the plc Board
• the team structure was revised and new managers appointed
• personal development plans were established for all team members, covering technical, interpersonal and business process skills

The impact of these changes was a motivated IT team that really made a difference to the business, working effectively with internal and external stakeholders.

“Following a period of significant disruption, the IT team was effectively aligned with the business through a process of listening to stakeholders, building effective relationships and delivering its promises. Significant benefits were achieved through the introduction
of a structured and integrated approach to IT Governance.”

John Bennett, Group Finance Director
Westbury plc 2005

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Acquisition

Prowting Homes was a family-owned UK house-building company with turnover of £300m. Following a due diligence and bid process, a final bid from Westbury was accepted. The acquired company was integrated with two new regional offices established in Dartford and Bridgwater.

This acquisition in 2002 propelled Westbury plc into the top six house-building companies in the UK and into the FTSE250.

The due diligence and bid process involved the coordination of internal and external resources, including lawyers, corporate financiers, the plc Board of Directors and other internal Directors, to ensure the strict timetable for submission of the acquisition bid was achieved. A summary report of the key findings was produced and issued to the plc Board to request further information from the acquisition target.

The acquisition target company had a number of locations throughout the UK and our responsibility covered all aspects of the acquisition and the coordination and attendance of internal and external change team meetings.

The change team worked extremely closely and there was frequent reporting through weekly formal meetings and other informal communications.

When the bid was accepted the integration of the newly acquired business was planned in detail. This involved the introduction of standard processes and systems into the two retained regional businesses and the decommissioning of systems in three offices that were closed.

The acquisition price was £141m. The reorganisation costs were £5m and the cost of new systems £1m.

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Strategy and business planning

Their business strategy was radically overhauled following a process of consultation and review, with four distinct themes identified:

• quality
• efficiency
• land
• people

Quality and efficiency were coordinated to improve all aspects of the business, both in the ten regional offices and 150 remote building sites, covering process, people and technology changes.

The specific changes included a more rapid on-site building process, systems access to on-site construction personnel, improving the back-office commercial and financial processes and establishing process owners to facilitate continuous improvement.

To assist with the achievement of this strategy, functional business plans were closely coordinated to ensure deliverables were achievable, dependencies understood and resources planned.

“Martin was responsible for the delivery of the quality and efficiency parts of the business strategy, using a practical & holistic approach to change. The end result was coordinated functional business plans which ensured our objectives were achieved in a consistent and structured way.”

Nigel Fee, Chief Executive Officer
Westbury plc 2005

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