ENSR International

by: Section A, Group 7

background
o Started in 1968 by atmospheric scientists Norman Gaut and James Mahoney to help firms
deal with new air quality requirements and regulations
o In 2000, ENSR completed approximately 3000 projects, with a Total Gross Sales of $ 219
million (it was $ 218.4 million in 1999)
o Net sales after adjusting for subcontractor fees is $ 142 mil for 2000 and $ 137 mil in
1999
o Total market size for the year 2000 was $ 24.3 billion (US alone)
o % Revenue Market Share (RMS) for ENSR in Environmental consulting industry 1%
o % RMS for ENSR in their niche (DES) is 4.59% only

background
o Consulting is majorly done along 8 service lines
o Air Quality, Water Quality, Process Engineering, Due Diligence, Impact Assessment,
Environmental Health and Safety (EHS), Remediation/Integrated Site closure, Capital
Projects Planning
o ENSRs client sector was well diversified (although there wasnt any explicit intention for
the same)
o Organization: By 2000, ENSR had 1200 employees (900 of them were consultants, of
which 15 were dedicated to management and 300 administrative staff)
o Culture:
o Employees were in this not just for money but also for a sense of satisfaction of giving
something back to the society (doing good)

CSC, Seller-doers and Compensation

o ENSR was organized along geographic lines, with each office named as Client Service
Center (CSC)
o Each CSC was run by a CSC Manager (15 years of consultant experience) who is
responsible for the profitability, staffing and developing incentive compensation of the
consultants in that CSC
o Profitability = (No of hours billed by each consultant * Hourly rate) total costs
o 100 designated Seller-doers (70 CSC Managers and 30 Senior Level consultants) whose
primary objective is to build strong relationships with the MEA of client organization
o As a part of this, the Seller-doer will have to appraise the MEA ,
o of the various works that were/are being done by ENSRs other CSCs to that client
o That ENSR worked with similar clients
o ENSRs coverage (active and adequately staffed CSCs across the clients territory of
operation
o That ENSR understood the clients business
o And most importantly, that ENSR did good work

The Buying Process

o Client organization sends an Request for Proposal to various consulting firms
o On receiving a request, CSC manager assigns a Proposal Manager to formulate a bid
o An average proposal team has 3-4 consultants and if required, sometimes more including
people from different CSCs and with different backgrounds
o After submission of bid, the vendor selection by the client is done either on the basis of
price ( if the Purchasing department felt that the consulting firms were on equal footing in
terms of quality) or a joint decision by a team
o One third of the RFPs never materialized into a project, and of the remaining two thirds,
ENSR won half of those
o Ten percent of the projects were awarded as a Single Source contract

Present Objectives and Issues

o Objective is to improve Bottom line
Issues
o Sales has been flat for 2 years
o ENSR has been losing projects to Hughes-Hailey (including the lucrative Westchem
project)
o Utilization rates in some CSCs are very low (Camarillo, CA has a utilization rate of
42%)
o ENSR is winning only 1/3rd of the projects to which it submits a bid (or 50% of the projects
that get commissioned). This implies that they are potentially losing out on business
worth of $ 200 million very year and also the additional single source businesses,
contacts and testimonials these projects can bring in
o CSCs working in silos and each CSC cares only about their profitability and not the
companys
o Three proposals at hand

Pros and Cons of each Proposal

Reintroducing BDO
o BDOs are paid solely to sell. and to bring in business
o Compensation based on the volume of business they bring in
Advantages:
o Consultants can go back to consulting and leave the business development part to the
BDOs
o ENSR has an experience of BDO and hence it wont be difficult to implement
o Doesnt require major restructuring of the firm
Disadvantages
o BDO on its own doesnt address the problem of CSCs working in silos
o BDO doesnt address the problem of CSC losing out on 50% of the projects that
eventually materialize
o Doesnt result in a very strong relationship with firms either

Pros and Cons of each Proposal

Changing incentive structure of consultants
o The present compensation structure doesnt take into the account the non-billable yet
important work put by the consultant (like preparing bidding documents, developing
relationship with MEA etc)
o Subjective criteria to be included when the deciding the bonus
Advantages:
o Incentivize the consultant to take more risks and to go after big deals
o Doesnt require major restructuring of the firm
o Encourages the consultant to spend more time with clients and strengthening these
relationships
Disadvantages
o Doesnt address the problem of CSCs working in silos.
o each consultant is going to worry about the profitability of his/her CSC because the
CSC managers incentive is still tied to it

Pros and Cons of each Proposal

Key Accounts Program Our Proposal
o Develop a database of companies who contribute more than 5% of the ENSRs total
revenue and ,pre than 20% of CSCs revenue Key Account*
o Create a new department at a central level with teams of people, and each team
liaising with MEAs of a client
o The new department should try and develop a relationship with the clients and also
help coordinate the consultants of ENSR across US
Compensation Structure:
o A consultant would be compensated purely on his/her utilization rate
o Each CSC managers incentive will be calculated based on the utilization rate of the
consultants of his CSC
o This compensation plan would also abolish the existing system of treating each CSC
as a profit center
o In the new model, Profitability calculations will be done at the central level
Advantages
o Removes the silo mentality and forces each CSC to look for new businesses