Quality Waste Management, Inc is a large waste management company who has engaged Deloitte to help with the determination of a technology solution to improve the overall operations of their business.
Business situation
Quality Waste Management, Inc, (QWM) a $5B company founded in 1929, is one of the oldest and largest waste management, comprehensive waster, and environmental services companies in North America. Most of its business is in the US and Canada, but has been expanding most rapidly in Mexico and Central America. While historically the industry leader, in the past year, macroeconomic conditions have impacted profitability of several business units, especially in the recycling area where costs have risen by 20% and resell value of recycled products have decreased.
The company’s network includes 450 collection operations, 326 transfer stations, 240 active landfill disposal sites, 12 waste-to-energy plants, 290 recycling plants, 120 beneficial-use landfill gas projects and six independent power production plants. Waste Management offers environmental services to nearly 53 million residential, industrial, municipal and commercial customers in the United States, Canada, and Puerto Rico.
QWM grew to become an industry leader mainly through an acquisition and rebranding strategy of incorporating smaller local/regional water companies.
However, a disparate approach to IT strategy has led to QWM utilizing over 1,000 different IT, finance, reporting, and operations systems, with poor integration to front-end user applications. This has resulted in the company struggling to maintain a fragmented IT portfolio, leading to operational difficulties. The last quarter was especially troublesome for the organization as data integrity issues led to the company losing two key clients. An internal audit concluded the disparate IT architecture and governance was a material weakness.
Historically, the organization hasn’t typically prioritized IT investments; however, the CEO has requested the CIO investigate how the company can streamline its back office IT functions to improve operational performance and transform the business to be more competitive. The CIO has invited us to meet and discuss recommendations on the best approach to implementing a best-in-class ERP system to consolidate finance, reporting, and operational functions and integrate with critical consumer-facing digital applications to enhance the “QWM client experience.
Problem statement
QWM has experienced several financial advantages of expansion through acquisition rather than organic growth. However, the lack of integration over time is starting to impact profits, market performance, and is ultimately straining existing client relationships.
Although QWM is still extremely profitable each year, there is a concern around the upward trend in remediation cost for operation inefficiencies and various IT systems maintenance. The CIO wants to understand how the $75M investment of an ERP system will yield future value to her company and positively impact the net bottom-line and meet their goals for continued positive revenue through expansion.
Question 1
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Your Answer
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A great answer could also include:
The ERP’s ability to ensure business process alignment – deciding and understanding the tradeoffs between modifying business processes or modifying the software to support the requirements
Emerging technology – what new “tech trends” can be considered to increase service levels while minimizing cost – e.g. cloud architecture, analytics platforms, etc
Implementation approach – phase vs. big bang implementation. Deciding whether to “go live” at once or in multiple stages has positives and negatives so the strategy needs to be properly thought through. Requirements gathering, design, testing, training, implementation, and other key tasks will be expensive and risky if done at once
Ability to reengineer the customer experience – a new ERP platform provides enhanced, integrated capabilities that will allow for the organization to grow their portfolio of client-specific digital offerings. These should be tailored to address specific issues that have led to customer attrition and also aim to align QWM with industry leaders in terms of delivering best-in-class user experience
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