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Business Model Optimization


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The alignment of a multinational company’s operating model and its global tax profile enhances the opportunity for value creation.  But that’s no easy task.  Each must adapt to satisfy the demands of the other.  Business Model Optimization (BMO) is the process of pursuing this balance and integrating the operating model and global tax strategy into the way a business operates.  The two do not operate independently of each other.  One must carefully balance business needs with tax requirements.  

In this evolving economic environment, it is always a good time to review your global business model, “How can you create value by pursuing new market share, transforming your value chain, and gaining greater economies of scale?”  Some of the ways to create value in an organization include:

  • Undertaking operational initiatives to pursue revenue and margin growth
  • Evaluating rationalization of the supply chain
  • Integrating acquisitions with existing structures
  • Centralizing management and key supply chain functions, assets and/or intellectual property, regionally or globally

As you evaluate these and other types of business transformations, are you considering all of the relevant factors that may help build value within your organization?

When making decisions related to tax opportunities, the business strategy makes up the framework within which tax opportunities exist.  Tax structures that do not reflect business operations can diminish the bottom line, while a business model that does not consider tax may hamper its cash flow through reduced after-tax profits.  The impact of aligning these two is a more efficient business model with sustainable and scalable tax results.

As organizations look to pursue new markets, gain greater economies of scale, and contain costs, BMO helps to explore important factors, including a range of value creation opportunities and the associated tax consequences.  BMO helps multinational companies integrate their operational and tax planning in a scalable and sustainable manner to help business leaders make more effective decisions on an after-tax basis.  BMO is all about creating value through business transformation.  

There are more than 500 dedicated BMO specialists within our global network of member firm professionals who are experienced with the complexities of implementing new business models and aligning the tax and operating strategy for multinational companies.  Our integrated multidisciplinary team includes specialists in business transformation, information technology, human resources, international tax and transfer pricing, global customs and trade and Value Added Taxes, and project and change management.  Deloitte’s dedicated cross-competency, global team networks have extensive “been there, done that” experience in aligning tax, treasury, intellectual property and business models.  Our teams provide high quality, customized tax and business model transformation services in an efficient manner through the use of our BMO methodology.

Using our established methodologies and tools, our BMO teams focus on the following elements or work streams:

  • Realigning for business transformation
  • Reconfiguring IT systems
  • Readying Human Resources
  • Reorganizing legal, finance, and tax structures

 

Click to enlarge our "4R" methodology infographic

Contacts

Andy Newman
Deloitte Tax LLP
Global BMO Co-Leader
acnewman@deloitte.com
John Henshall
Deloitte LLP
Global BMO Co-Leader
jhenshall@deloitte.co.uk