An EPC Leader Transforms Itself Amid Intense Volatility
Agile cost transformation ensured discipline, speed, and accountability.
A sudden drop in global oil and gas prices can challenge engineering, procurement, and construction (EPC) firms, given their large overhead cost structures. When demand plummets, they must quickly restructure their business to ensure financial sustainability. It’s a complex problem that we help clients in every industry solve.
We helped EngineeringCo* save over $300 million over two years, leading to a 5% increase in its EBITDA margin and a 2.5x increase in its stock price over the same period. The transformation strengthened the company’s market position and financial performance, and even enabled a major acquisition.
Demand for EngineeringCo’s services had crashed by more than 40% in the two years prior to their engagement with our team. So, we began with a rapid due diligence intended to put the brakes on spending. This “cash hunt” increased the company’s cash position by 20% in the first 100 days while reducing its net debt load.
This work also helped us identify many opportunities to make long-term improvements, such as an optimization of accounts payable and receivable, which released about $350 million in working capital. EngineeringCo also took this transformation opportunity to centralize seven support functions, a streamlining that would deliver about $50 million in savings over 12 months.
Working collaboratively with business unit leaders, we designed more than 500 initiatives spread across 40 countries and involving 20,000 people. These initiatives targeted savings in external spend, labor, project resources management, and business development effectiveness.
EngineeringCo achieved these outstanding results through our Accelerated Performance Transformation solution, which promises capability building and rigorous change management to ensure that results are sustainable.
Beyond the fast-paced approach and ambitious targets, what made EngineeringCo’s transformation so successful was the focus on line-led delivery. Every initiative was spearheaded by the company’s internal talent, whom our team coached and trained in agile ways of working to ensure discipline, speed, and accountability.
With this approach, initiative owners and sponsors tackled problems in two- to four-week sprints that were tailored to the nature of specific opportunities. A cadence of regular meetings ensured that employees could make decisions quickly and adjust priorities when necessary.
For example, the optimization of seven support functions shifted EngineeringCo from in-country, office-centric teams to a more efficient regional model that also enabled specialized capabilities. The company designed models for HR, finance, legal, IT, and other functions—agile approaches that allowed EngineeringCo to deliver simpler, more standardized services with greatly reduced activity volumes.
And to make it stick, we helped the company establish a Results Delivery Office—our proven solution for change management—to track its progress, engage stakeholders, and manage risks, ensuring a smooth and fast implementation.
The company’s multiyear transformation delivered such powerful, sustainable results that the company was able to lead industry consolidation, creating significant value and reinforcing strong leadership positions. Today, with new offerings, greater resilience, and global reach to support customers, EngineeringCo continues to lead the industry in embracing the energy transition and establishing more sustainable businesses.