| Item | Description |
| DaaS Solution: | DaaS IT |
| Client vertical: | PBO & SAP Consulting in the Manufacturing and Production Sector |
| A number of employees: | 550 |
| Client country: | Germany |
| 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 |
| Annual Contract Value [€]: | €2.160.000 |
| Amount of contracted people: | 4 at the beginning and then ramp up to 45 people minimum in 2022. |
| 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 four people. In the Junior and Senior Development Area as well as in the Senior Solutions Architect arena, with fluent German language skills. This is the start of the Austrian entity. After that, they will ramp up to 41 more people in 2022. In 2022, most likely the Swiss and German Teams will also come on board, which would increase the potential number of people to over 90 in operations.
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 globally to be 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, wina 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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