During his
summer internship with BCG, Shankar worked
on a
pre-merger integration planning assignment for clients in the
healthcare technology industry. Shankar’s objective was to develop a
comprehensive, market based, bottom-up revenue forecast for the
combined entity, to inform post-merger strategic planning. Shankar
made extensive use of Pivot Tables to segment over 200K practices in
the US healthcare industry by specialty and practice size. The
market potential represented by each market segment was translated
to a revenue
opportunity for the client using a methodical 5-step
process:
- The addressable market opportunity was determined by applying
penetration and adoption rates by segment
- Products in the client’s portfolio were positioned against market
segments that they best served
- The number of deals to be won was calculated from the addressable
market by estimating reasonable sales force coverage and win rates
by product and segment
- The total order intake was estimated using an average deal size
per product
- Revenue recognition rules were applied to translate order intake
into an annual revenue figure
Logic similar to what is outlined above was used to determine the
revenue opportunity represented by cross-sell and up-sell deals.
Shankar’s analysis is being used by the client CFO’s office to
validate Wall St. expectations from the merger and develop revenue
targets for individual business units. The tools and modeling skills
developed in FY DA & DAO courses definitely paid off for Shankar!
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