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In addition to the above 3 elements, proactive thinking is one of the most important habits of our service managers. Gamutsoft is now challenging to improve our delivery manager’s competency.
<<Service Level Based Contract>>
Unfortunately or fortunately, most of our current service contacts are based on labor basis. Hence, Gamutsoft does not need to make hectic effort to reduce its headcounts. Are you angry?

Based on labor basis, we simply need to follow the customer IT manager’s direction. Gamutsoft obligation is to provide skilled engineers to implement the services at the agreed minimum level SLA.
If a Gamutsoft Service Manager makes effort to improve the service efficiency and successfully reduce the headcount, our service revenue will decrease. Why should we do it? There is no incentive nor motivation at all in Gamutsoft to go an extra mile for the customer with labor based contract.
There is a saying that “Four eyes see more than two” or “Two heads are better than one”.
Our offer is “why don’t we jointly, with a true business partnership, make effort to improve the service productivity and to reduce the service cost by introducing better processes and/or better tools?” By doing so, the customer will get 2/3 of the cost reduction results as the service price down, and we Gamutsoft gain 1/3 as its margin increase. This is a win-win scenario, isn’t it?
When you issue an RFP, it is much easier for you to estimate the service cost by head count and persuade CFO (or your budget controller).
However, if the contract is service based, we will make much-much more effort to reduce the cost whilst maintaining the same service level.
If we could successfully reduce its engineers from 10 to 7 within a year or two, 20% is your price reduction and 10% will become our margin increase. There is no doubt that the Gamutsoft Service Manager will make his/her great effort to improve the efficiency of service since their bonus would be driven by it (smile!). Beside that, all the gained TVO is what you can proudly sell to your BU’s as shown in the chart above.
Isn’t it worth to try to change the contract to a pure service based when the next contract renewal time comes?
<<Difference between Service Based contract and Managed Service contract>>
1. Any labor based contracts can be changed to a service based regardless whether our service manager is a dedicated or a part-time, as far as no more head count based pricing.
2. If the scale of service contract reaches to a certain level including service desk, on-site service, asset management, and some more that often requires a bit higher level management and tools such as Dashboard, Gamutsoft may offer Managed Service at certain fee that assures a dedicated service manager and the Gamutsoft backyard engineering team’s support.
Should you have any questions, please contact our sales or marketing representatives.
T. Kato, EVP, Gamutsoft Corporation |