Aligned Experience: Payroll Services Company
Background
- $200M client was being carved out of a $2B organization.
- The product development team was called upon during aggressive growth cycles to custom-build capabilities that enabled user-friendly administration of payments for clients of HHS agencies. This led to IT being 20% of revenue.
- PIP performed the Carve IT Diligence and identified the potential for significant savings, which led to this full carveout and the cost reduction analysis.
Our Approach
- Performed the full IT Carveout, successfully separating the client from the ParentCo ahead of schedule, preventing TSA cost overruns.
- Performed a full IT cost reduction analysis comparing current TCO with future reduction opportunities, including transitioning some proprietary development to commercial software alternatives.
- Identified significant cost-inefficiency in the onshore location of product IT staff and made recommendations for lower-cost alternatives.
Our Solution
- Identified $52M 5-year savings case for product and non-product IT cost reduction
- Identified cost reduction opportunity of client onboarding (U.S. State Agencies) by 40%, a savings of $0.5M per client (2-5 per year)
- Reduced over $12M of calculated enterprise risk within the 18-month carveout
- Established a new CTO with a multi-year technology plan and an IT capability & governance maturity strategy to increase operational efficiency