Total revenue

$650K

Impl + managed services

Total cost

$338K

Labor + infra + expenses

Gross profit

$312K

Before SG&A allocation

Gross margin

48.0%

Target ≥ 45%

Contribution margin

$233K

After 12% SG&A ($78K)

Revenue & cost breakdown

Resource plan

By SOW line

Scenarios

Margin risks

Revenue breakdown

Line item	Amount	% of total
Implementation — Fixed fee	$170,000	26%
Managed services — Yr 1 ARR	$480,000	74%
POC credit (AWS funded)	$8,500 pass-thru	—
MAP credit (AWS funded)	$40,000 pass-thru	—
Total DFX5 billed revenue	$650,000	100%

Revenue mix

■ Impl 26% ■ Managed 74%

Cost breakdown

Cost category	Amount	% of rev
Labor — delivery team	$248,000	38%
Labor — pre-sales SA	$22,000	3%
AWS infra & tooling	$28,000	4%
Travel & expenses	$18,000	3%
Subcontractors	$22,000	3%
Total direct cost	$338,000	52%

Gross margin vs. target

48%

0% Target 45% 100%

Margin waterfall

Resource plan — delivery team

Role	Name	Rate/hr	Impl hrs	MS hrs/mo	Total hrs	Total cost	% of labor	Margin contribution
Lead Architect	Miguel Torres	$120	320	40	800	$96,000	35%	35%
Sr. Engineer	TBD	$95	400	30	760	$72,200	26%	26%
Engineer	TBD	$75	280	40	760	$57,000	21%	21%
PM	TBD	$85	160	16	352	$29,920	11%	11%
QA / Support	TBD	$65	60	10	180	$11,700	4%	4%
Pre-Sales SA	Miguel Torres	$120	180	—	180	$21,600	—	Pre-sales cost
Total labor					2,832 hrs	$288,420	—

MS hrs/mo shown for ongoing managed services. Total hrs = Impl hrs + (MS hrs/mo × 12). Pre-sales cost excluded from gross margin calculation.

Profitability by SOW line

SOW / line	Type	Revenue	Direct cost	Gross profit	GM %	vs. target
Implementation — Phase 1	Fixed fee	$170,000	$118,000	$52,000	31%	⚠ below 45%
↳ Discovery & design		$28,000	$16,800	$11,200	40%
↳ Build & configure		$96,000	$74,000	$22,000	23%
↳ UAT & go-live		$46,000	$27,200	$18,800	41%
Impl. subtotal		$170,000	$118,000	$52,000	31%

Managed Services — Yr 1	Retainer	$480,000	$220,000	$260,000	54%	✓ above target
↳ Monitoring & ops		$240,000	$96,000	$144,000	60%
↳ Optimization & roadmap		$144,000	$80,000	$64,000	44%
↳ Incident response SLA		$96,000	$44,000	$52,000	54%
MS subtotal		$480,000	$220,000	$260,000	54%

Total		$650,000	$338,000	$312,000	48%	✓ above 45% target

Note: Implementation GM at 31% is below the 45% target. Build & configure phase is the main drag at 23%. Consider adjusting scope, rate card, or adding a contingency buffer before SOW is finalized.

Scenario modeler

Adjust key variables to see the impact on gross margin before finalizing the SOW.

Impl. fee adjustment $170,000

$120K$250K

Managed services rate/mo $40,000

$28K$60K

Delivery cost overrun buffer 0%

0%+30%

Discount applied 0%

0%Max 15%

Scenario result

Revenue

$650,000

Direct cost

$338,000

Gross profit

$312,000

Gross margin

48.0%

0% Target 45% 70%

✓ Above target margin — safe to proceed

Base costs: Impl $118K · MS $220K · Fixed overhead $22K (infra + travel). Overrun buffer applied to delivery labor only. Discount applied to total revenue.

Margin risk register

High — scope creep (implementation)

Build & configure phase is fixed-fee at 23% GM — the lowest margin line. Any unplanned scope additions (custom CRM integrations, additional IVR flows) will erode further. Recommend a 15% contingency buffer in the SOW or a T&M clause for integrations beyond 3 defined systems.

High — discount pressure at close

CFO (economic buyer) not yet engaged. Procurement-led buyers in LATAM banking typically request 10–15% discounts. A 10% discount on total revenue drops GM from 48% to 40% — below the 45% floor. Protect with value-based close strategy; do not discount before executive alignment call.

Medium — resource ramp & availability

Client Delivery Architect is unassigned. If a senior resource is unavailable and a subcontractor is used at market rates ($110–130/hr), delivery cost increases by ~$18K, reducing implementation GM to 20%. Assign internal resource before SOW is signed.

Medium — managed services churn at renewal

MS ARR ($480K, 54% GM) accounts for 74% of deal revenue and drives the blended margin above target. If the client does not renew or reduces scope at month 12, the project-level GM drops to 31%. Recommend embedding a 24-month renewal clause with a 10% Year 2 discount option.

Low — AWS infrastructure overrun

AWS infra budgeted at $28K (4% of revenue). Amazon Connect pricing is consumption-based — if call volumes exceed POC estimates by more than 40%, costs could rise $8–12K. Consider capping pass-through in the MSA or including a usage buffer.