Module 8 Assignment
Sodexho HC Consultant Report
Prepared For: Prof. Guy Chartrand
Table of Contents
1984 Sodexho HC (“SHC”) business unit was established under Sodexho group. It is managed through a central office in the Paris area and serves both private and public hospitals in France. Sodexho group is a very successful food and management service provider in the world, its services include a wide range of supports, such as laundry, building maintenance and sterilizing surgical instruments. While Sodexho’s head office is situated in France, some 90% of its business in 2005 was conducted globally in over 74 countries. Food services accounted for 80% of Sodexho’s revenues until the end of 2000. In January 2001, Charles Duchemin, CEO of Sodexho HC resolved to embark on a Balance Scorecard project. His main goal was to ‘clarify and define, together with the management team, strategy and an action plan that would allow Sodexho HC to continue to perform and grow in the years to come.’
1. Apprin-Service, a service offering food purchasing but no production, is highly appreciated by SHC’s clients in the public sector due to shift of responsibility for food safety from hospitals to them. 2. One of SHC’s greatest differentiating factors is the attention they give to their clients. SHC’s clients are asking for their help on innovating and improving their service. 3. SHC is considering offering multi-services to provide added value to each client segment to deliver efficient and effective health care. 4. The CEO has identified its business unit is lacking of coherence. SHC’s regional directors are scattered all over France while the head office managers are in Paris. 5. SHC tends to be very focused on operations.
6. Clients in the public sector and private sector have different needs. The Public sector are more concerned about food safety and workload reducing, where as the private sector is more concerned about gaining a competitive advantage from outsourcing in addition to excellent hygiene standards. SHC currently does not have specialists in charge of developing public clients. 7. Information Technology (IT) was not perceived as being very successful as it was perceived as adding little value compared to the time it consumed. 8. SHC is lacking a key process in the service offering which is the evaluation of their existing offers. There is no information about the actual quality of services delivered. Images in the sterilization service have been a problem. 9. Change in government legislation has seen a consolidation of small clinics into larger organizations. Multi-service offerings has become important for SHC to increases its revenue by increasing its sales volume per client. However, larger hospitals have greater bargaining power which means less loyalty to SHC. 10. Public sector clients have been late in making payments or not pay at all. Improving Cash flow is a high priority and Sodexho HC is trying to develop direct payment systems for better cash flow. 11. Hospital employees are an essential service however they are becoming a scarce resource. Visitors to the hospitals are becoming increasingly important, hospital reception service and round-the-clock food availability becomes particularly important service elements. 12. The length of an average patient stay (APS) is decreasing. The number of hospital beds in France will be reduced by 100,000 in the next four years. 13. Hospital outsourcing was estimated to grow by 20% over the next few years. 14. There has been a slow but steady increase in the number of competitors. Sodexho’s main competitors are Avenance and Compass.
Executives seem to have inconsistent views and understanding on “multi-service” offers (See Appendix 1 & 2), including conflicting views on cost management for public sector, and different expectations on the company’s...
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