The Total Economic Impact™ Of Andela

Cost Savings And Business Benefits Enabled By Andela

A Forrester Total Economic Impact Study Commissioned By Andela, June 2024

Digital transformation of business operations around the world is driving demand for technically talented workers. However, organizations face hurdles with recruiting and scaling up technical talent, including lengthy hiring timelines, underperforming hires, and administrative costs. To avoid these challenges, organizations need a partner that can capably provide high-quality, reliable talent.

Andela operates a global marketplace of skilled technologists. Through Andela, organizations can quickly source and onboard proven, technically skilled talent to drive digital transformation. This adaptive approach to hiring allows companies to scale up or down as needed to respond to their rapidly changing needs.

Andela commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Andela.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Andela on their organizations.

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Return on investment (ROI)

97%97%

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Net present value (NPV)

$10.9M$10.9M

To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four customers and surveyed 30 respondents from companies with experience using Andela’s services. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a global organization headquartered in North America with 2,500 employees and revenue of $1 billion per year.

generates in annual revenue and has employees. It expects to hire professionals from Andela in Year 1, in Year 2, and in Year 3 of the analysis. Custom results are based on user inputs and the TEI case study.

“Which of the following benefits has your organization experienced as a result of your investment in Andela?”

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Base: 30 representatives of organizations that are Andela customers
Source: A commissioned study conducted by Forrester Consulting on behalf of Andela, May 2024.

Key Findings

Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:

  • Accelerated time to hire talent by 66%. Andela’s services significantly shorten the time to hire technical talent for the composite organization. In particular, the recruiting and screening stages are streamlined so the organization no longer has to create job listings, reach out to candidates, and sort through them. The organization saves 106 hours on hiring efforts per talent brought on board, totaling over 2,000 hours saved in Year 1 and over 5,200 by Year 3. The organization also avoids professional employee organization (PEO) costs by working with Andela. Altogether, these benefits total $753,000 in value.

For , this benefit might be worth over three years.

  • Accelerated timelines and high-quality work resulting in millions of additional revenue. The composite organization quickly scales up the number of talent supporting projects, and the quality of work they bring helps accelerate project timelines by 33%. With a faster time to market and less rework or fixes due to talent performance, the organization recognizes value on projects sooner. In Year 1, the organization brings in $3.7 million in additional revenue; by Year 3, this grows to $13.8 million. With operating margin applied, the three-year present value totals $2.3 million for the organization.

For , this benefit might be worth over three years.

  • Avoided compliance infraction risk costs of $640,000. By working with Andela, the composite organization avoids handling paperwork around contractors and reviews of legal compliance of the contracts. Andela assumes this responsibility and limits the organization’s exposure to the risk of misclassifying employees, thus helping them avoid incurring significant fines.

For , this benefit might be worth over three years.

  • Avoided $2.4 million in costs for replacing talent. The organization avoids challenges that come from unexpected departures and/or poor employee performance, like loss of knowledge, training, and loss of productivity on projects. By adding talent to support specific projects, who also perform satisfactorily, the organization avoids turnover that would otherwise cost $300,000 per employee.

For , this benefit might be worth over three years.

  • Recognized cost savings of $80,000 per talent hired from Andela. The organization maximizes hiring budget limitations by adding talent from Andela that is 40% more cost efficient than if they hired talent themselves. More workers are added to support projects than could be afforded previously, helping employees meet project delivery goals.

For , this benefit might be worth over three years.

Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:

  • Ability to scale talent up and down. Andela enables greater flexibility to add or remove talent based on project needs. The speed with which Andela satisfies requests for talent shortens the window to bring people on board. Meanwhile, Andela’s management of the talent relationship helps with shifting workers to support other projects. The organization can bring in the right talent and produce better outcomes faster and more cost effectively.
  • Diversity of talent supporting projects. Andela’s global reach helps the organization to leverage talent from around the world, incorporating their perspectives into day-to-day work to produce richer outcomes. This diverse talent composition helps organizations to better reflect their global customer base and create more informed, well-rounded deliverables.
  • Andela’s support to clients. Andela’s understanding of business context and ability to skill match, including through the use of AI capabilities, helps the organization to quickly find the right talent to support projects. This helps technical teams to move forward quickly and confidently with their work. Positive interactions help foster a strong partnership between the companies.

Costs. Three-year, risk-adjusted PV costs for the composite organization include:

  • Andela’s talent services costs. These costs vary based on the skill sets of workers available through Andela. For the composite organization, the mix of Andela talent costs $10,000 per month on average.

For , these costs could represent over three years.

The financial analysis which is based on the interviews and survey found that a composite organization experiences benefits of $22.0 million over three years versus costs of $11.2 million, adding up to a net present value (NPV) of $10.9 million and an ROI of 97%.

might experience benefits of over three years versus costs of , adding up to an NPV of and an ROI of 0%.

“The reason we work with Andela is the agility it gives us. We’re able to onboard somebody faster with the right skill set, they’re able to ramp up quickly and swiftly deliver results to get us over the finish line.”

VP, worldwide partner and expert services, software

Key Statistics

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    Return on investment (ROI):

    97%97%
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    Benefits PV:

    $22.0M$22.0M
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    Net present value (NPV):

    $10.9M$10.9M
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Benefits (Three-Year)

Hiring cost effectiveness Increased product value from increased productivity Avoided compliance infraction costs Avoided talent replacement costs

TEI Framework And Methodology

From the information provided in the interviews and survey, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Andela.

The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Andela can have on an organization.

  1. Due Diligence

    Interviewed Andela stakeholders and Forrester analysts to gather data relative to Andela.

  2. Interviews And Survey

    Interviewed four representatives and surveyed 30 respondents at organizations using Andela to obtain data about costs, benefits, and risks.

  3. Composite Organization

    Designed a composite organization based on characteristics of the interviewees’ and survey respondents’ organizations.

  4. Financial Model Framework

    Constructed a financial model representative of the interviews and survey using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees and survey respondents.

  5. Case Study

    Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.

Disclosures

Readers should be aware of the following:

This study is commissioned by Andela and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.

Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Andela. For the interactive functionality using Configure Data/Custom Data, the intent is for the questions to solicit inputs specific to a prospect's business. Forrester believes that this analysis is representative of what companies may achieve with Andela based on the inputs provided and any assumptions made. Forrester does not endorse Andela or its offerings. Although great care has been taken to ensure the accuracy and completeness of this model, Andela and Forrester Research are unable to accept any legal responsibility for any actions taken on the basis of the information contained herein. The interactive tool is provided ‘AS IS,’ and Forrester and Andela make no warranties of any kind.

Andela reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.

Andela provided the customer names for the interviews but did not participate in the interviews. Andela also provided respondents for the survey. Forrester fielded the double-blind survey using a third-party survey partner.

Consulting Team:

Corey McNair

Carmen Serradilla Ortiz

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