Client is a major utilities company based in the mid-west. It conducted a phased implementation of Acro Service Corp’s XRM^SM Solutions (XRM^SM), which was completed in March, 2003. Client uses this system to manage the services of between 250 and 300 contract labor employees, provided by sixteen current suppliers.

XRM^SM Solutions systems and services are provided to Client at no cost. All XRM^SM program fees are funded by a supplier paid transaction-based fee that is more than offset by direct savings accrued by the suppliers. Client’s only added cost from implementation of XRM^SM Solutions results from its voluntary acceleration of supplier payments, but is more than offset by the considerable savings derived by Client, as shown in the analysis.

Background Data

Client’s contract labor spend is expected to remain relatively constant over the first three years of the program. Client’s current spend is approximately fifteen million dollars per year. Client’s contract labor base is relatively stable, with average turnover of approximately 30% per year.

The list below presents aspects of Client’s annual contract labor spend and other assumptions that are relevant to the projection of savings from implementation of XRM^SM Solutions.

Current Spend:

IT: $7 million
         Admin: $4 million
         Engineering: $4 million
         Pre-Implementation Bill Rate: $77.45/ST hour
         Post-Implementation Bill Rate: $53.00/ST hour
         Annual Turnover Rate: 30%
         Annual Inflation: 3 %

Case Study Methodology

This case study focuses on costs and benefits of XRM^SM Solutions at Client that:

·     Clearly, directly and immediately result from implementation of XRM^SM Solutions,

·     Are easily quantified based on known costs, and

·     Result from the direct elimination or addition of cost and/or human effort

This case study does not address “soft” benefits of XRM^SM Solutions, which may nonetheless be of substantial importance to Client.  Soft benefits from the proper implementation and management of XRM^SM Solutions include:

·     Reductions in the “time to fill” contract labor positions resulting from improved procurement processes and the automated organization and presentation of candidate selection information

·     Improved quality of contract labor staff resulting from a more objective candidate selection process and improved supplier competition

·     Reduction in “negative” turnover (i.e. undesirable contract labor attrition) as a result of improved and more timely employee On Boarding and employee review processes, leading to substantial client savings from reduced retraining and productivity losses

·     Improvements in pricing that result from improved efficiencies within participating suppliers - XRM^SM Solutions effectively eliminates the need for suppliers to expend marketing effort (all approved suppliers automatically receive all Job Orders), invoice for their services or expend collection efforts (billing and supplier payment are fully automated, electronic processes)

Case Study Results

The direct costs and benefits resulting from the implementation of XRM^SM Solutions at Client are presented in detail in the following table.

XRM^SM Solutions Cost Savings Projection

* Year 2 and Year 3 totals are calculated using a 3% inflation adjustment

** Net savings percent is based on a level contract spend of $15,000,000