Tessellate: A $118 M Transformation Case
Strategy
medium45 min0 submissionsGoldman Sachs
Scenario
Tessellate is a startup-stage developer tools business in US with $858 M of revenue.
The COO has proposed a $118 M digital transformation over 4 years. Roughly 47% of core operational processes are still manual or spreadsheet-driven. The business case claims 3.7% of revenue in annual run-rate savings once complete.
Complications the board is aware of:
- Two previous system implementations were abandoned mid-way
- Industry studies suggest 63% of transformations of this size miss their stated benefits
- The proposal assumes headcount reduction that no one has yet discussed with the affected teams
- The savings are back-loaded: almost none arrive before year 2
The CEO wants to know whether to approve it, shrink it, or reject it.
Supporting data
context
- prior failed attempts
- 2
- manual process share pct
- 47
- industry failure rate pct
- 63
financials
- revenue
- 858
- investment
- 118
- programme years
- 4
- claimed annual saving pct
- 3.7
derived hints
- annual saving
- 32
- simple payback years
- 3.7
Your task
Advise the CEO. Your answer should provide:
- Analysis — the business case on the numbers, including payback.
- Risks — what makes this fail, and how you would detect it early.
- Recommendation — approve, resize, phase or reject, with a specific first step.
State any assumptions you make.
Ready to move forward? Up next: Kirana Connect: Where Should the Acquisition Budget Go?Next question
How you'll be graded
100 points, 60% to pass.
- business case25
- execution risk25
- recommendation25
- problem structuring25
Hint
Reveal suggested structure
Business case and payback; risk-adjusted return; phasing and gates; adoption as the constraint