Sie sind auf Seite 1von 6

1 Charging Models

1.1 Summary

Capgemini has the capability and experience to put in place the right blend of pricing
mechanisms that will drive value, flexibility and predictability. We can use a range of
mechanisms including innovative approaches such as scorecards linked to sustainability and
risk / reward investments.

The key price mechanisms we can use include:

Fixed Price
Output based pricing and Catalogue pricing
Target cost with Gain-share
Risk / Reward
Time and Materials (T&M)
Volume Discounts.

1.2 Our Approach

Fixed Price

Capgemini typically use this mechanism where the IT requirements are predictable, relatively
simple to manage and where the costs are largely fixed. The CLIENT will benefit from
predictable fixed charges with value for money being delivered by an agreement on service
levels against the fixed price. The price will also include a deflation glide-path across the life
of the deal to reflect efficiency improvements from new technology, increased staff
productivity and improved delivery processes. We would normally build benefits resulting
from efficiency and deflation of certain IT costs into our overall fixed price.

Capgemini typically use fixed charges within all of its contracts for some element of its
services. We therefore have significant experience in operating fixed price contracts and have
consistently delivered to the SLAs against these commitments. Capgeminis experience
supports agreeing a complete fixed price such that no elements of the service to be delivered
are excluded from the contracted price. This limits the number of change controls that need
to be raised for additional elements of scope not contractually included in the price. For one
of our large public sector account of over 35,000 users, which used a combination of fixed
and output based pricing, the change controls have averaged around 1 per month over the
life of the contract. This leaves the governance team free to concentrate on strategic
initiatives that can add value to the contract.

Output based pricing and Catalogue pricing

Capgemini tries, where possible, to map its pricing strategy to the needs of the clients
business and typically uses variable pricing where possible to ensure that the client is only
paying for the services they actually use, whilst still transferring risk to Capgemini. The
volume drivers therefore need to be output based rather than input and Capgemini will ensure
the outputs are closely aligned to real CLIENTs business drivers.

The level of cost variability will drive the level of utility pricing that Capgemini can offer. For
those services that have an element of fixed and variable pricing, Capgemini would offer a
mechanism whereby there is an agreed core charge against a volume baseline such as the
Additional Resource Charge (ARC) / Reduced Resource Charge (RRC) model shown in
Figure 1.

Flexible Target Pricing Model (ARCs / RRCs)

Major Change
+ Y2%
Ceiling
Adjustment made to invoice
based on no. of units consumed
above the Upper Threshold

Upper +Y1%
Threshold No Change in Principle
Unit Price Invoice
Baseline 0%
Forecast Stays the Same
No Change in Principle Unit
Lower Price -X1%
Threshold
Adjustment made to invoice
based on no. of units consumed
below the Lower Threshold

Floor
-X2%
Major Change
Unit
Volume

Figure 1: ARC / RRC Model

The ARCs and RRCs methodology takes into account the fact that the outsourcing cost
drivers are partly fixed, partly semi-fixed and partly variable. The ARCs / RRCs methodology
is structured around providing a base fee for planned baseline volumes (e.g. # users, # servers)
for each defined service component. The price for each service component is fixed as long as
the actual consumption remains within a specified variance above and below the baseline.
This band is called the stable range or dead band, within which no ARCs / RRCs fees apply
i.e. no change to the baseline invoice.

Variances above the dead band will be charged using the ARCs rate, while variances below
the dead band will be credited using the RRCs rate. Maximum and minimum consumption
threshold are mutually set, at which point a new baseline is then agreed with associated price
and ARCs / RRCs changes.

For those services that have a high element of variable pricing we would offer full utility
pricing where charges are based on an agreed rate * output volume.

In terms of the output delivery level requirements, we would be happy for some services to
tailor the output based volume drivers to match the business requirements more closely,
creating a catalogue of output based unit charges. In our experience this works well where the
output requirements are well understood but need to consider the impact on the financial plan
and invoicing in terms of any additional financial modelling complexities.

The Capgemini contract with a major UK Police force is predominantly based upon output
based pricing. The contract has over 35,000 users but is successfully operated within an Open
Book environment using output based volume drivers that include the number of Desktops,
Laptops, Servers, PDAs, Telephones, Pagers and Printers.
Other output based volume driver examples include Gold, Silver and Bronze levels for server
and desktop support or categorising users by priority (standard, remote, VIP etc), where the
criticality of the service being provided is reflected in the charge.

Another example is the Aspire contract with HMRC which includes a number of output based
charging mechanisms including the use of function points within the Applications area.

Effectively the mechanism works by defining how much functionality you get from an
application and using this as a metric for the HMRC business benefit. Applications are then
banded by type based on the complexity involved in developing each function and this then
becomes the basis of a unit charge applied to the development or enhancement of an
application i.e. the charging mechanism is now aligned to a real benefit of the client, being the
development of functionality. An alternative to this is to base the charges on man-day rates
but tied to function productivity. This can then be applied to a risk / reward mechanism
whereby Capgemini are incentivised to deliver functionality development in a more cost
effective way.

The benefits to the CLIENT of output based pricing and catalogues is that charges are linked
to the CLIENTs business usage. In addition, future charges can be predicted based on volume
scenario analyses and this can provide the CLIENT with valuable management information to
aid future decision making. Business changes such as an increase in the level of IT support or
the addition of a new office can be clearly understood in terms of the cost impact to the
CLIENT, and factored into any business case analysis.

Target cost with Gain-share

Capgemini has experience of operating target costing models with gain-share in an open book
environment, generally with input based cost plus models, and believe that if structured and
managed correctly can influence the behaviour of both parties to create real benefits for both
parties. Examples where Capgemini currently operate gain-share include:

For the Aspire contract with HMRC there is a mechanism of sharing open book margin above
an agreed contracted percentage. This is calculated as follows:

Each service has a contracted target margin in each year of the contract. The sum of these
target margins form the Target contract margin
At the end of each year the actual margin by each service line is calculated and summed
to give an actual contract margin
An Imbalance adjustment is applied to take account of any changes in the mix of
business in the overall deal to arrive at an adjusted actual contract margin
Any excess margins are then shared with the client.

The share given to the client was agreed to be increased year on year to take account of
expected cost reduction opportunities available to the supplier from ongoing technology
improvements and efficiencies.

In another example for an account with a large global pharmaceutical client, an agreement
was put in place whereby Capgemini would take on the management of certain third party
supplier contracts, with a gain-share in place for any savings achieved through renegotiation
of terms.
Risk / Reward

Capgemini understands the need for incentives in any commercial relationship and believe
that under the right conditions, a risk / reward mechanism can achieve this, but the risks and
therefore the rewards need to be carefully balanced to achieve the right outcome. From our
experience risk / reward is a strategic mechanism that only works in a trusting partnership.
Capgemini believe the following risk / reward models could be used with the CLIENT.

Milestone payments Capgemini are paid based on the successful completion of agreed
project milestones such as transition or transformation. In addition, payment can be increased
or decreased based on agreed criteria. For example an additional payment could be agreed
that would be made to the contractor if it delivers a project early. This would be balanced
with a commensurate reduction in charges if the project is delivered late. An example of this
on the Aspire contract with the HMRC is used in the trials of development work. As the
project work is completed Capgemini are paid the cost only of the man-day effort but not the
margin element. During the completion of the trials of the deliverables 50% of the margin due
is paid with the final 50% paid on successful completion of the final trial

Scorecard an element of the Capgemini fee is paid against certain scorecard performance
metrics such as sustainability, efficiency or asset performance.

Service Levels an element of the Capgemini fee is paid against service performance with a
lower than acceptable performance resulting in service credits but an over performance
resulting in service debits.

Innovation Capgemini will be happy to share investment in innovative programmes to


achieve future cost savings to the CLIENT. These investments would offer a profitable return
to Capgemini on the achievement of agreed cost savings or business benefits to the CLIENT.
This method of risk / reward is also employed in the Aspire contract with HMRC where a
framework exists specifically for giving support to:

Gaining approval for furthering innovation ideas


Developing a business case (and who picks up the costs)
Defining project outcomes
Agreeing the responsibilities of both parties with respect to risk, deliverables and benefit
management
Agreeing the basis of the payments and how they are linked to the project outcomes

The framework is designed to create a balance of creating ideas and strategic thinking whilst
taking into consideration the commercial outcomes.

Time & Materials

Capgemini will provide the CLIENT with a range of rate cards and options for charging work
carried out outside of the core services. In addition to a standard rate card by role, Capgemini
will be happy to explore the following:-

Blended rate cards this can include various levels of blending including by role and
location. In its simplest form we can provide a single man-day rate for an agreed scope of
work. This transfers the risk of delivery on to Capgemini who then must manage the profile of
skills on the project. A variation of this model which can handle different levels of scope
within projects is to create a blended rate based on the level of risk and complexity of the
project. Figure 2 outlines this mechanism.
Figure 2 Risk Graded Rate Card

Each letter represents a blended rate (A rising to E) with each project being graded according
to risk and complexity in order to determine the relevant man-day rate to be applied. Under
this mechanism risk is still transferred to Capgemini but due to the more refined evaluation of
the projects, Capgemini can offer more competitive blended rates

Pooled days Capgemini will be happy to work with the CLIENT to evaluate using a pooled
man-days mechanism. Under this model the CLIENT would commit to a certain number of
man-days per annum, with some allowance for monthly and annual carry over. In return
Capgemini will be able to offer improved man-day rates that factor in higher utilisation of its
staff

Volume discounts

Capgemini recognises the commercial benefit that arises from increased volume throughput
and would like to offer volume discounts where relevant. This will include discounts against
time and material rates for agreed notice periods and commitment of man-days and discounts
to ARC / RRC rates and catalogue rates for agreed unit volume bands

In deciding the exact mechanism of the charging models it is important to remember that they
are key inputs into the Value Assurance Process and the overall financial management model.
For this reason the charging models should always remain simple to understand, easy to
operate and reconcilable against metric information and financial reporting

Aligning the right mechanism to the services

Capgeminis recommendation is that the majority services be provided on a mix of fixed price
and output based volumetric pricing. We also recommend that time and materials pricing is
used for more occasional and variable work. Finally, we should use Risk and Reward pricing
to encourage specific outcomes where that is appropriate.

The following table outlines how we might apply the various charging mechanisms to the
different services:

Mechanism Services Output Volume Driver


Fixed price Network Management Fixed price so N/A.
WAN
LAN
Cross Functional (Procurement,
Asset Management)
Service Management
Governance
Information Security
Training.
Output based price ARC / Datacentre Services Space (Sq Ft)
RRC Server Management Operating System Instance
Database Management Databases
Application Support Applications and SLA
Managed Print Service (Catalogued by Gold,
Service Desk Silver, Bronze)
On Site Support. Printers
Users (Catalogued by
priority)
Devices (Catalogued by
standard).
Output based price Utility Server Management (if servers Operating System Instance
virtualised and including asset and
maintenance) Space (Gb)
Storage Services Handsets / call usage
Voice Services Operator consoles.
Audio Services.
Target cost with gain-share Applied to the overall deal or specific
initiatives.
Risk / Reward Transition / transformation / project
Milestones development
Scorecard Any service in principle
Service levels Any service in principle
Innovation Initiatives over and beyond core
services.
Time & Materials Application Development Based on either standard rate
Application Enhancements card or blended.
In-flight projects.

Das könnte Ihnen auch gefallen