About the client:
The client is a multinational corporation located in the United States recognized for its specialization in optical and routing technologies, as well as automation software.
Serving customers worldwide, the company focuses on developing and manufacturing advanced networking systems, including optical devices, routing solutions, network management platforms, and automation products.
Challenges:
The client noted that the project budgets for Customer Setups and Live Support Services (Subscription Services) are going short before their scheduled end dates, leading to multiple change requests to increase the budgets for these projects and subscriptions.
This has resulted in losses for the quarter and the overall annual profits, creating a significant pain point in the services P&L.
The FlairsTech PMO team conducted a series of in-depth workshops with the Implementation and Operations Support teams, Delivery teams, and relevant stakeholders to identify the root causes of the recurring budget impacts across different projects. The conclusion was:
Outdated Price Rates
The customer sales team was underselling the setup and support services because they were using outdated cost estimates for the Level of Effort (LOE) of all team members involved in either project setup or operational support services.
Uncalculated Third-Party Cost
The cost of a third-party partner was not included in the pricing model presented to several of customer’s end users, resulting in ongoing expenses that the customer must pay on a quarterly basis.
Wrong Time Reporting
Solution Architects or Subject Matter Experts (SMEs) were reporting their time spent on these projects against the assigned budgets, even though their efforts should be considered part of their regular daily work rather than dedicated project work.
Solutions:
The solution that FlairsTech PMO Team provided was covering the main 3 pain points which impacted the customer P&L, as the solution was:
Updating the LOE
The PMO team collaborated with deployment, implementation, and support team members to develop an accurate Level of Effort (LOE) and an updated cost model for all customer services provided to end users.
Publishing the Third-Party Services Price Plans
The team included the cost of third-party pricing plans, based on estimated end-user data processing, as a standard practice with the sales team.
Correct Consultancy Effort Time Reporting
After approval, the PMO team conducted awareness sessions and communicated with the relevant Solution Architects (SAs) and Subject Matter Experts (SMEs) to clarify the cost centers and projects on which they should report their time.
Impact:
These solutions led to the following:
- More revenue generation
- More cost control
- Better third-parties cost prediction
- Less change requests