The Impact of Engagement Delivery Models on Project Profitability: A Study in Automotive Consultancy

This study examines the impact of the two primary Engagement Delivery Models (EDMs), Time and Material (T&M) and Fixed Price (FP), on profitability and efficiency in the automotive consultancy sector. A literature review was conducted to investigate EDM applications across different industries, highlighting a lack of research specifically addressing the automotive sector. While engagement models have been extensively analysed in IT and software development, their adaptation within Original Equipment Manufacturers (OEMs) and consulting firms remains largely unexplored. The analysis suggests that profitability drivers vary between the two models, with project size playing a key role in T&M contracts, while cost control represents the primary challenge in FP engagements. Additionally, the influence of offshore resources allocation, governance structure, and contractual constraints on supplier margins and overall project success is examined. To validate these hypotheses, an empirical analysis was performed using a Capgemini Engineering dataset, assessing the impact of worked days, average cost, turnover, and governance complexity on financial performance. The findings provide practical insights for both researchers and industry professionals, presenting a data-driven approach to EDM selection in automotive consultancy.