DaaS IT - Business Case 2021 - SGS JSC

DaaS IT – Business Case 2021

 

Item Description
DaaS Solution: DaaS IT
Client vertical: PBO & SAP Consulting in the Manufacturing and Production Sector
A number of employees: 526
Client country: Swiss
Client and Project Information
Project Start date:  06.07.2021.
Contract length [month]: 36
Project Team: Junior Front end and/or Back-end Developer and Senior Solutions Architect
Area of Expertise Client: Business Consulting
Geography [Contract]: Germany, Austria, Switzerland, Great Britain, North America, Australia, Ireland
Contract Value/year [GBP/€]: < €250.000
Amount of contracted people: 2 at the beginning and then ramp up to 6 in 2021
Deal profitability [%]: 34%
Implementation Time [days]: 90 days

Customer Description:

The Client assists medium-sized businesses and multinational enterprises in digitizing their business processes. The Client has been in business for over 30 years and employs over 800 people in European and Pan-European locations. OUR CLIENT relies on suppliers such as SAP and Microsoft for solutions and technology. They have done over 2,001 customer projects for more than 500 clients in various sectors, such as automotive supplies, construction supplies, electrical/electronics, mechanical & plant engineering, logistics, metal, consumer goods and trade.

Customer Problem:

The customer has an ever-growing need for Engineers, Developers & Solutions Architects. Consequently, resources are in high demand in the various European countries where the customer operates.

These resources are costly and can quickly wander off to other companies. To prevent that from happening, the customer is seeking a solution to keep those resources long-term within the company, by providing them with a great work-life balance and income ratio. This way, the client has a stable long-term integrated team, lower operational cost for staff, up to 40% cost reduction.

Thus, this will allow the client to build a centralized team as well as generate better margins and profit in their client projects. In the end, it makes the company more competitive in the market. If they would be in a competitive sales scenario, they will be able to deliver a good value for money compared to their competition.

Provided Service:

The client will now ramp up in Zagreb a DaaS IT Development team: they will start with two people, one as a Junior developer and one Senior Solutions architect, both with fluent German language skills. This is the start of the Austrian entity. After that, they will ramp up 4 more people this year, for the Swiss and German Teams.

Next year, the team will be expanding to approx. 3 – 5 times the size of the current setup. This way, in the long run, the customer will implement multi-language and multi-region support. The developers and architects will work on international projects and travel there. The side effect is that travel costs are usually cheaper from Croatia, compared to other European countries.

That is the second gain of savings. The team will be recruited across the EMEA and the CEE region, employed in Zagreb. The team members report directly to their respective project managers.

Costs:

Overall, with SGS’s help, the Client achieves a cost reduction of 60% operational expenditure compared to running the same department in the Client’s own country. The strategy is to build a team, winning completely new customers, increase sales farming and hunting in their customer base. Because of the work ratio, 2.5:1, which is specific for Switzerland, the Client increases their performance output from 1 FTE [Full Time Employee] =100% to 3 FTEs = 287% for the exact same budget, which is possible because the resources at SGS, work at 15% more capacity compared to other European counterparts.

Potential Risks:

The concept of a fully specified, selected, trained, managed, and operated distant virtual workforce by the Client is novel.

Key factors for this success:

For the Client, the most important component is to completely grasp the potential for cost savings, increased productivity, and improved performance in the Client Sales department. The present costs of having one senior AM [Account Manager] in Switzerland are the same as having two AMs plus a PA in Croatia, as provided by SGS.

Expected Return on Investment:

Year 1 = 41% | Year 2 =46% | Year 3 = 46%

Client Statement:

The Client likes the cost reduction.

 

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