{"id":3715,"date":"2018-05-03T19:03:02","date_gmt":"2018-05-03T19:03:02","guid":{"rendered":"http:\/\/joapen.com\/blog\/?p=3715"},"modified":"2018-05-03T19:07:42","modified_gmt":"2018-05-03T19:07:42","slug":"transformations-require-provide-value","status":"publish","type":"post","link":"https:\/\/joapen.com\/blog\/2018\/05\/03\/transformations-require-provide-value\/","title":{"rendered":"Transformations that require to provide specific value"},"content":{"rendered":"<h1>Background<\/h1>\n<p>We are working on a contract renewal with a customer that is driving the process with clear goals and expectations. They want to renew just for 2 years and have a YoY savings of 6%.<\/p>\n<h1>Initial approach<\/h1>\n<p>We were requested to look into the current solutions, look for improvements and identify transition or transformation projects that enable a new contract with the 6% savings.<\/p>\n<p>We have done the analysis and after that we have done some specific conclusions and a generic conclusion about the situation.<\/p>\n<h1>What is the typical cycle of CAPEX investment where you are looking for ROI?<\/h1>\n<ul>\n<li>5 Years contract.<\/li>\n<li>Transition &amp; transformations during the first 2 years.<\/li>\n<li>Positive return in the fith year.<\/li>\n<li>Consider basic calculation\/benefits, I have not added any additional benefit as time to market, or other benefits.<\/li>\n<\/ul>\n<p>In my analysis I have created simple scenarios:<\/p>\n<ul>\n<li>Scenario 1: plain scenario, as baseline for comparison (I do not do anything).<\/li>\n<li>Scenario 2: T&amp;T with 10% on 5 years contract with small YoY reduction.<\/li>\n<li>Scenario 3: T&amp;T with 10% on 5 years contract with a more agressive YoY reduction.<\/li>\n<\/ul>\n<h1><a href=\"http:\/\/joapen.com\/blog\/2018\/05\/03\/transformations-require-provide-value\/tt-roi-analysis\/\" rel=\"attachment wp-att-3716\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-3716\" src=\"http:\/\/joapen.com\/blog\/wp-content\/uploads\/2018\/05\/TT-ROI-analysis.jpg\" alt=\"\" width=\"990\" height=\"520\" srcset=\"https:\/\/joapen.com\/blog\/wp-content\/uploads\/2018\/05\/TT-ROI-analysis.jpg 990w, https:\/\/joapen.com\/blog\/wp-content\/uploads\/2018\/05\/TT-ROI-analysis-300x158.jpg 300w, https:\/\/joapen.com\/blog\/wp-content\/uploads\/2018\/05\/TT-ROI-analysis-768x403.jpg 768w, https:\/\/joapen.com\/blog\/wp-content\/uploads\/2018\/05\/TT-ROI-analysis-500x263.jpg 500w\" sizes=\"auto, (max-width: 990px) 100vw, 990px\" \/><\/a>Conclusion<\/h1>\n<ul>\n<li>When creating T&amp;T programs with specific returns, you require some time to<\/li>\n<li>T&amp;T should not be more than 10% &#8211; 12% of the overall price of your solution.<\/li>\n<li>In environments where automation is deployed and there are not other major angles to improve, a different approach is required (change of solution with a business case that requires more CAPEX and years to obtain ROI).<\/li>\n<li>Hidden cost is an obstacle to be competitive.<\/li>\n<li>In our case, it is mathematically not possible to propose a T&amp;T project to recover the ROI is just 2 years (if you are not removing a clear major issue). The only available approach is to accelerate continuous improvement on the existing services.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Background We are working on a contract renewal with a customer that is driving the process with clear goals and expectations. They want to renew just for 2 years and have a YoY savings of 6%. Initial approach We were requested to look into the current solutions, look for improvements and identify transition or transformation &#8230; <a title=\"Transformations that require to provide specific value\" class=\"read-more\" href=\"https:\/\/joapen.com\/blog\/2018\/05\/03\/transformations-require-provide-value\/\" aria-label=\"Read more about Transformations that require to provide specific value\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[101],"tags":[],"class_list":["post-3715","post","type-post","status-publish","format-standard","hentry","category-program-management"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Transformations that require to provide specific value -<\/title>\n<meta name=\"description\" content=\"Background We are working on a contract renewal with a customer that is driving the process with clear goals and expectations. 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