Blog | 08.14.2012

Are You Profitable in Fixed Price Projects?

Global competition, reduced IT spends, and rising salary costs have severely impacted profitability at Indian IT services companies and large back-offices. Business deals are shifting to Fixed Pricing, and this is putting the service organisations under pressure to deliver the best, keeping the costs under control and to gain profitability out of the projects.

The major challenges vendors face while executing Fixed Price projects include the affects of under-estimations of effort required, costs incurred and difficulty in measuring the productivity of the employees, where they tend to start on a low note but eventually put a lot of effort to improve the slack developed. This results in exceeded deadlines, which causes Cost Overruns and a reduction in profitability margin.

Once the organisations start facing these problems they try to find a solution, but they fail to identify the pain areas within the organization.

This is where our product Sapience plays a big role. It provides the vendors an illustrated set of data such as Time Hygiene, Activity Mix, and Capacity Optimisation Indicators, which helps the Managers to identify the root cause of the problems.

Sapience provides the following benefits to the service organisations:

  • Reports on Time spent on various activities related to the project, ensuring that majority of the time are spent on top 3-4 activities.
  • Gives Lead Indicators for both Over-utilised as well as Under-utilised teams so that corrective measures can be taken to maintain a uniform output from all the teams.
  • Allows the Project Management teams to track work efficiency as a metric indicative of operational and management oversight and comparing actual effort with estimates.
  • Provides useful insights to the Sales team to improve the effort estimation on future fixed price deals.

One of our customers is a leading IT services firm which provides their customized solutions for Content Management, Business Automation, and Enterprise Mobility, deployed Sapience to improve their productivity. Within a span of 4 months, over 15% work output gain was achieved by enhancing the Time/Effort being put in. They were able to estimate the efforts more proficiently and maintain a healthy Team Workload balance.

This is what our customers say about us:

”While quality of service delivered is being accomplished through CMMI and other quality standards that we follow at Zensar, Sapience will plug in and help us meet the challenge of accurate effort measurement using high level of automation, something that has not been possible so far.” Sanjay Marathe (Senior Vice President and CTO, Zensar)

Our uniquely compelling and patent-pending solution has found rapid acceptance at 30+ customers and 15,000+ users in just one year. Try our 30-day trial for up to 100 users. Please contact us at sales@sapienceanalytics.com or https://sapienceanalytics.com/try-sapience