Case study
How OSATA supported a $30M scaleup to profitability and 42.4% margin boost in 12 months.
How OSATA supported a $30M scaleup to profitability and 42.4% margin boost in 12 months.
How OSATA supported a $30M scaleup to profitability and 42.4% margin boost in 12 months.
-4min read-
A scaling British renewable technology company. 4 core product verticals. Recently bought by Private Equity. Chasing EBITDA profitability.
A scaling British renewable technology company. 4 core product verticals. Recently bought by Private Equity. Chasing EBITDA profitability.
A 20%YoY growth company developing SaaS and IoT technology for the wind energy industry. The company had recently been acquired by Growth Equity (PE), and was doubling down on product & internal efficiencies to reach EBITDA positivity for the first time, as soon as possible.
OSATA lead, Chris Ruddock, joined the team in April 2024, supporting as part of the connected hardware team, overseeing Product Operations across 6 international offices.
Primary skills deployed:
Product Management, Product strategy,
Financial analysis, Supply Chain analysis.
A 20%YoY growth company developing SaaS and IoT technology for the wind energy industry. The company had recently been acquired by Growth Equity (PE), and was doubling down on product & internal efficiencies to reach EBITDA positivity for the first time, as soon as possible.
OSATA lead, Chris Ruddock, joined the team in April 2024, supporting as part of the connected hardware team, overseeing Product Operations across 6 international offices.
Primary skills deployed:
Product Management, Product strategy,
Financial analysis, Supply Chain analysis.
Work kicked off with a meticulous, end-to-end audit of deals closed in the previous 12 months across all global sales regions. This aimed to find low hanging fruit that could support top- and bottom- lines.
From proposal to delivery, over 150 deals were analysed line-by-line across business functions to answer questions including:
"Are we winning all the deals we're proposing?"
"What percentage of optional upsells proposed are being ordered?"
"What's the real margin per deal, considering per-project specs, variation, quality & overheads?"
"Do existing systems help global teams to align on the broader strategy?"
Until this point, 6 globally distributed teams had been optimising within functional silos. Delivering great work individually, but without the big-picture visibility that held the answer to company-level EBITDA.
Work kicked off with a meticulous, end-to-end audit of deals closed in the previous 12 months across all global sales regions. This aimed to find low hanging fruit that could support top- and bottom- lines.
From proposal to delivery, over 150 deals were analysed line-by-line across business functions to answer questions including:
"Are we winning all the deals we're proposing?"
"What percentage of optional upsells proposed are being ordered?"
"What's the real margin per deal, considering per-project specs, variation, quality & overheads?"
"Do existing systems help global teams to align on the broader strategy?"
Until this point, 6 globally distributed teams had been optimising within functional silos. Delivering great work individually, but without the big-picture visibility that held the answer to company-level EBITDA.
Month 1-6
Refocusing to work on the business as much as in the business.
First things first.
Low-hanging fruit.
Month 1-6
Refocusing to work on the business as much as in the business.
First things first.
Low-hanging fruit.
Outcomes of Phase 1 of work included:
1) Unified reporting and training across global teams. Sales teams now better aligned, supported & directed towards validated, profitable verticals by Product team.
2) Updated proposal structure & deal terms for EU teams. These made charges (incl. shipping) simpler, and profitable. Shipping was now included upfront, charged in a way that was easier for customers to budget for.
3) Clearer communication and alignment between sales, customers and delivery teams. This minimised costly expedited shipments, with orders fulfilled on time in full (OTIF) at significantly reduced cost.
4) Data to support a radical new approach to Product architecture. Delivered in Phase 2..
Outcomes:
1) Clearer alignment between Sales, Product & Delivery teams.
2) Simpler supply terms that benefit both customer and company.
3) Significant costs saved.
Unexpected findings.
Missed revenue and
post-deal margin leaks.
Unexpected findings. Missed revenue and
post-deal margin leaks.
The audit uncovered four key observations:
1) The product category everyone thought was least profitable, wasn't as bad in reality.
2) While customers had agreed to pay for shipping, 2 of the 6 regions were missing shipping charges from invoices, accounting for £22k lost revenue.
3) Logistics costs (often expedited, partial batches instead of on time in full, OTIF) were adding up and eating margin for smaller deals. Costs couldn't be recovered due to the structure of initial purchase terms.
4) In a minority of cases, deals starting as highly profitable at sale were being eroded by unseen product rework costs in-field. Top lines looked healthy to sales & product teams, but deployment challenges weren't visible to senior leadership. These hidden costs were pulling margins towards net loss for the business as a whole.
The audit uncovered four key observations:
1) The product category everyone thought was least profitable, wasn't as bad in reality.
2) While customers had agreed to pay for shipping, 2 of the 6 regions were missing shipping charges from invoices, accounting for £22k lost revenue.
3) Logistics costs (often expedited, partial batches instead of on time in full, OTIF) were adding up and eating margin for smaller deals. Costs couldn't be recovered due to the structure of initial purchase terms.
4) In a minority of cases, deals starting as highly profitable at sale were being eroded by unseen product rework costs in-field. Top lines looked healthy to sales & product teams, but deployment challenges weren't visible to senior leadership. These hidden costs were pulling margins towards net loss for the business as a whole.
Outcomes of Phase 1 of work included:
1) Unified reporting and training across global teams. Sales teams now better aligned, supported & directed towards validated, profitable verticals by Product team.
2) Updated proposal structure & deal terms for EU teams. These made charges (incl. shipping) simpler, and profitable. Shipping was now included upfront, charged in a way that was easier for customers to budget for.
3) Clearer communication and alignment between sales, customers and delivery teams. This minimised costly expedited shipments, with orders fulfilled on time in full (OTIF) at significantly reduced cost.
4) Data to support a radical new approach to Product architecture. Delivered in Phase 2.
Outcomes:
1) Clearer alignment between Sales, Product & Delivery teams.
2) Simpler supply terms that benefit both customer and company.
3) Significant costs saved.
Phase 2
Phase 2
Co-ordinating a longer-term restructure
for 42.4% average per-unit margin improvement.
Co-ordinating a longer-term restructure
for 42.4% average per-unit margin improvement.
Phase 2
Co-ordinating a longer-term restructure
for 42.4% average per-unit margin improvement.
Simplifying delivery.
Improving quality.
and boosting operating margin.
By seeing things with fresh eyes.
Simplifying delivery.
Improving quality.
and boosting operating margin.
By seeing things with fresh eyes.
Phase 1 audits identified that post-sale product rework, customer management and returns from a few small, specifically challenging global regions were significantly impacting profitability,
It also highlighted that, while 80% of the hardware functionality was shared between the 4 major product categories - each was a unique assembly, with unique stock management, install instructions, development cycles troubleshooting, knowledge base and quality control.
The business had rightly - and successfully -adapted to evolving customer needs over the years with new product variants. This had put the organisation in a great position for sustained top-line growth and market share. A changing focus to profitability however, required a consolidation of Product Strategy.
Phase 1 audits identified that post-sale product rework, customer management and returns from a few small, specifically challenging global regions were significantly impacting profitability,
It also highlighted that, while 80% of the hardware functionality was shared between the 4 major product categories - each was a unique assembly, with unique stock management, install instructions, development cycles troubleshooting, knowledge base and quality control.
The business had rightly - and successfully -adapted to evolving customer needs over the years with new product variants. This had put the organisation in a great position for sustained top-line growth and market share. A changing focus to profitability however, required a consolidation of Product Strategy.
A project had already been tentatively explored internally to take a platform approach to the product portfolio. Phase 2 took this further, starting with a robust and business case that demonstrated the value of consolidating common parts of each system for the senior leadership team. The plan was then agreed across global teams and stakeholders.
The new approach -instead of building 4 separate product stacks - aimed to build common functionality into a single hardware solution that could be made low-cost at scale. Individual 'cards', specialised for each product variant could then be added to adapt systems to customer needs.
In addition to reducing direct costs, this approach offered greater supply chain flexibility, standardisation of peripheral systems (returns, installs, troubleshooting) better customer service and improved agility to address future customer needs. Development time for any new product vertical was reduced from 12-18months, to less than 6 months.
A project had already been tentatively explored internally to take a platform approach to the product portfolio.
Phase 2 took this further, starting with a robust and business case that demonstrated the value of consolidating common parts of each system for the senior leadership team. The plan was then agreed across global teams and stakeholders.
The new approach -instead of building 4 separate product stacks - aimed to build common functionality into a single hardware solution that could be made low-cost at scale. Individual 'cards', specialised for each product variant could then be added to adapt systems to customer needs.
In addition to reducing direct costs, this approach offered greater supply chain flexibility, standardisation of peripheral systems (returns, installs, troubleshooting) better customer service and improved agility to address future customer needs. Development time for any new product vertical was reduced from 12-18months, to less than 6 months.
Refactoring 4 separate products into one cohesive platform.
To improve Operating Margin - not just gross product margin - that was holding back positive EBITDA.
Refactoring 4 separate products into one cohesive platform.
To improve Operating Margin - not just gross product margin - that was holding back positive EBITDA.
Actionable 'North Star' criteria aligned technical and financial stakeholders around a common and measurable definition of success.
This united cross-functional teams and made collaboration easier.
Actionable 'North Star' criteria aligned technical and financial stakeholders around a common and measurable definition of success.
This united cross-functional teams and made collaboration easier.
Phase 2 work included initial business case validation and communication with developers, customers and senior leadership to correctly define success for the project.
Once teams were aligned, work transitioned to hands-on, end-to-end Product and Project management for the new platform. This included building, validating and communicating user requirements, technical specifications, certification, prototyping, and managing success metrics across the business. This involved co-ordination of teams across each global region to ensure cross-functional alignment.
Stage gates assessed the project through three key north stars, that worked in unison to ensure bottom-line success, while remaining relevant to development teams; 1) Total system hardware cost; 2) Total install time and; 3) Up-tower rework time using actual prototype measures.
These North Stars gave engineers a clear and actionable definition of success, with highly defined scope. By using install and rework time instead of typical financial benchmarks, success could be presented and measured in a relatable way for technical teams to deliver. This clarity gave freedom for engineers to think laterally, all the while tying outcomes to the P&L for senior leadership and sales.
Framing the North Stars correctly was a key part of maintaining clarity and direction between cross-functional, globally distributed teams that each had their own motivations and responsibilities within the project.
Phase 2 work included initial business case validation and communication with developers, customers and senior leadership to correctly define success for the project.
Once teams were aligned, work transitioned to hands-on, end-to-end Product and Project management for the new platform. This included building, validating and communicating user requirements, technical specifications, certification, prototyping, and managing success metrics across the business. This involved co-ordination of teams across each global region to ensure cross-functional alignment.
Stage gates assessed the project through three key north stars, that worked in unison to ensure bottom-line success, while remaining relevant to development teams; 1) Total system hardware cost; 2) Total install time and; 3) Up-tower rework time using actual prototype measures.
These North Stars gave engineers a clear and actionable definition of success, with highly defined scope. By using install and rework time instead of typical financial benchmarks, success could be presented and measured in a relatable way for technical teams to deliver. This clarity gave freedom for engineers to think laterally, all the while tying outcomes to the P&L for senior leadership and sales.
Framing the North Stars correctly was a key part of maintaining clarity and direction between cross-functional, globally distributed teams that each had their own motivations and responsibilities within the project.
A new and significantly more robust hardware platform was developed, validated and managed with cross-functional alignment within 12 months.
Initial targets aimed to improve average gross margin across the 4 verticals by 18%. The result was an exceptional 42.4% average improvement, weighted by projected volume. Results were calculated using actual, functionally validated hardware prototype costs.
Deployment was prioritised by customer impact. The product category that had experienced the most in-field rework was prioritised. This ensured the greatest initial benefit to customer experience and deal profitability. Volume categories that benefitted from the platform's 42.4% margin boost then followed.
During Chris' tenure, the company posted its first quarterly EBITDA positivity, with the sensing team delivering its highest ever top line growth of 36.7%.
A new and significantly more robust hardware platform was developed, validated and managed with cross-functional alignment within 12 months.
Initial targets aimed to improve average gross margin across the 4 verticals by 18%. The result was an exceptional 42.4% average improvement, weighted by projected volume. Results were calculated using actual, functionally validated hardware prototype costs.
Deployment was prioritised by customer impact. The product category that had experienced the most in-field rework was prioritised. This ensured the greatest initial benefit to customer experience and deal profitability. Volume categories that benefitted from the platform's 42.4% margin boost then followed.
During Chris' tenure, the company posted its first quarterly EBITDA positivity, with the sensing team delivering its highest ever top line growth of 36.7%.