Sub-Contracting Takeout & Capture
Case Study
A diversified services organization relied heavily on third-party subcontractors for delivery, driving inflated SG&A and eroding margin. New Wave Associates designed and executed a take-out and capture program to internalize high-value delivery work, renegotiate vendor relationships, and institute formal governance — producing multimillion-dollar recurring savings.
Opportunity
- More than 40% of total delivery costs tied to subcontracted resources
- Redundant scopes between internal and external teams
- Absence of vendor visibility, utilization tracking, or standardized agreements
Approach
- Conducted enterprise-wide subcontractor spend and utilization analysis
- Identified internalization opportunities based on complexity, criticality, and ROI
- Built transition plans and talent pipelines to backfill vendor capacity
- Established vendor scorecards, quarterly business reviews, and KPI governance
- Created an ongoing performance-management loop across SG&A functions
Outcome
- Annualized SG&A savings of $12M+ through vendor consolidation and insourcing
- Internal labor utilization up 25%, with margin per engagement up 8 points
- Framework institutionalized across all business units for recurring cost capture
About the Author
Craig Keller, Managing Partner at New Wave Associates, specializes in SG&A optimization and operational efficiency for services organizations.