Have you ever wondered how companies offering innovative solutions cut their own costs? Sander Nijssen, a CFO at the New Motion talks about IT cost reduction and their own solution to electrical driving.
Sander: The New Motion was founded in 2009 by Ritsaart van Montfrans and Alef Arendsen. These guys have solid financial, entrepreneurial and IT background. Ritsaart worked as a Strategy Consultant at McKinsey and was an Investment Banker at J.P. Morgan. Alef was very successful with two IT companies before. They both started the company and entered the Electric Vehicle market without a clear vision on what the business model would exactly be. The only thing they knew, was that electric mobility would become a big thing. Today The New Motion is leading the market in offering charging solutions and charging services to owners of electric vehicles in the Netherlands. We are currently expanding our business towards Germany and Belgium.
We sell two types of products. Our first product is called lolo smart. This is a charging station for electric cars and is perfect for home use. Thanks to integrated IT intelligence this charging station prevents your household from possible problems with insufficient amount of electricity and helps you to control your electricity costs. So, if it happens that there is not enough electricity to charge your car and use your oven, your flat screen or other devices simultaneously, the lolo smart will stop charging the car. The second feature it has is that we can remotely monitor how much electricity has been charged through the charging points. Most of the people who own an electric car don’t buy the car themselves, usually their employer provides them with an electric car. But you need to charge it at home, so you have to pay for the electricity the car uses. Sure you want to charge this electricity to the employer and it would be difficult to prove how much electricity was used by your car if you would have our lolo smart. So we basically arrange an online declaration for the employee. We send an invoice to the employer and we arrange that the charging costs are compensated to the driver by the end of the month.
Daxx: How much time is needed to charge your electric car?
Sander: There are different types of cars with different battery packs, some have a big battery and the others have small batteries, so depending on the battery pack it could be within 2 to 6 hours. There is also another technique to charge the car battery. It is called fast charging or quick charging and you would need a very powerful charging installation for this. You would typically find these in The Netherlands at petrol stations and roadside hotels/restaurants. With a fast charger you can charge your battery up to 80% in 15-30 minutes.
Daxx: How much electricity does electric car usually consume?
Sander: If you start driving an electric car your energy bill for your home will double. A car will consume as much as a regular household.
Daxx: Can you compare the cost of electricity and petrol in Holland? What will be the difference?
Sander: Basically you can say the electricity costs are much lower than the costs of petrol. However buying an electric car is still more expensive than buying a petrol car. So the investment is higher for electric cars but the usage costs are lower. This makes that total cost of ownership (TCO) is similar to TCO of a petrol car.
Daxx: How many people use electric cars in the Netherlands? Why do people decide to drive electric?
Sander: There are currently around 12,000 electric cars driving on the Dutch roads.. There are three main benefits to why people or companies choose an electric car over a petrol car.
#1 Environmental Benefit
The first one is because of the environmental benefit and this is not only reducing CO2 emission, but it is also polution of air by small particles. CO2 deteriorates the ozone layer and the particles provide health problems cities.
#2 Fiscal Incentive Scheme
As I said the total cost of ownership is already comparable for driving electric cars and driving usual cars. However in Holland there is a fiscal incentive scheme, which makes it financially attractive if you are an entrepreneur to buy or lease an electric car. This makes driving an EV in the Netherlands even cheaper than driving a car with a combustion engine. This however does not hold for all countries as the Netherlands are quite unique in their stimulation policy.
#3 The Driving Experience is Amazing
And the third reason is that the driving experience is amazing. The acceleration of these cars is amazing and the driving experience is really comfortable as you don’t have the usual noise of a combustion engine.
Daxx: Can you tell me more about the second product you are selling?
Sander: People who drive an electric car will not only charge at home but also when they are on their way. This creates the need for being able to charge at charging stations in the public space. Transaction settlement has proven to be a problem here as the providers of public charging stations want to be compensated for the electricity they supply. In order to solve this problem we have introduced a charge card. This card has similar features as a credit card and allows the user to identify her/himself via an RFID reader and to pay for the electricity transaction. We make sure we invoice the user and compensate the location owner who supplied the electricity. We call this transaction ‘payment settlement’ and Daxx is helping us with developing the back-office which links all of these pieces of information together and makes it possible to arrange the payment settlements.
Daxx: Thank you. So, your company has remote developers with Daxx. Why did you decide to look for a solution of this type? What were the drivers?
Sander: I think there are two main reasons. One is the lack of availability of good developers in Holland and the fact that the few who are really good, tend to be very expensive.
Daxx: Can you compare the costs of developers in Ukraine and in the Netherlands?
Sander: Yeah. If we compare the costs of what we pay Daxx and what we would be pay to a Dutch developer. I would say that Daxx is about 25%-30% cheaper.
Daxx: Have you used project outsourcing companies, freelancers or other IT subcontractors?
Sander: Daxx is really the main supplier. The rest of our IT development is being done in-house. We did recently started working together with a company that does an external review and tests of the robustness of our IT systems in terms of data control and privacy. We thereby make sure it is not easy for other parties to hack our systems to gain entry to our customer data.
Daxx: How did you choose Daxx? Did you participate in the selection process?
Sander: I was personally involved in the selection process. A friend of mine has his own company and worked with Daxx for several years. He was very enthusiastic about this partnership. We did look into some Indian companies offering similar services but eventually decided to choose for DAXX based on the positive feedback from my friend about Daxx.
Daxx: Today we are talking about IT cost reduction. Are there any IT cost reduction strategies you can share?
Sander: For one, our company has over 85 fully employed people, so we are pretty big and we still don’t have internal IT facilitation desk. I think lots of companies of that size have at least one person who just makes sure that everybody can work efficiently. So that would be someone who installs software and who makes sure that there is a backup of the data, servers and those kind of things. Even when we were a startup at early phase everybody worked from the Apple, a MacBook. Some people will think it is ridiculous, as a MacBook is really expensive but it doesn’t require any maintenance. If you work on Windows every half a year your computer crashes or you need to install updates, you need to get virus software and everything else. So if you than have 80 people working on a Windows computer you do need somebody to fix the problems all the time. I think choosing for Mac’s was a very good decision. The second thing is that we don’t have any servers. All the IT we use is SAAS (software as a service programs). For example, we use Dropbox and an online accounting package called Twinfield.
Daxx: Is there anything you can add?
Sander: I think in general that, in order to be successful in working with remote developers, you need an IT person at the head-office with very good project management skills. You need somebody who really tightly manages the process. If you do this, working with remote developers could be incredibly efficient. If you fail it could become a real nightmare.