Scaling Reed & Mackay's infrastructures and operations with a VCC

Client

Reed & Mackay, a leading corporate travel management firm, built its reputation on delivering high-quality, bespoke travel solutions. Following their acquisition by US-based firm Davaan in 2023, the team faced a critical challenge: an outdated tech stack that limited scalability. 

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The Challenge

Reed & Mackay's outdated tech stack did not fit the team's evolving business needs, while the existing systems presented multiple obstacles:
 

• Travel customization for clients was slow and ineffective, as adjusting to different corporate travel needs was extremely complex. 
• Generating reports was hefty, leading to delays in decision-making and operational inefficiencies.
• Scaling the business was challenging, as the technology stack was not designed to support high-volume operations.

Hiring a large engineering team in the UK was cost-prohibitive, yet a complete modernization of the setup was necessary. The company needed a solution that provided technical excellence, cost efficiency, and operational flexibility.

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The Solution: A Virtual Captive Model designed for growth

Dataction has been working with Reed & Mackay since 2020 under a fixed FTE or rate card model, with a small team of four or five developers and testers. The initial collaboration started slowly as the UK team had limited experience working with offshore teams. However, in late 2023, with a new CIO in place and a clear modernization mandate, the client recognized the need for a dedicated offshore team to drive transformation at scale.

Rather than setting up a separate entity, as Jet2 had done, Reed & Mackay opted for a Virtual Captive Center (VCC) model, which provides the benefits of an in-house team with the efficiency of an offshore setup.

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How we structured the VCC 

We designed a model that balanced cost advantages with operational control, allowing Reed & Mackay to scale effectively without compromising quality:

• Joint selection process

Resources were selected collaboratively by Dataction and Reed & Mackay to ensure technical and cultural fit.

• Salary transparency 

Reed & Mackay had full visibility into resource salaries, ensuring a clear understanding of value.

• Transparent markup model

A predefined and agreed-upon cost structure removed uncertainty.

• Scalability and flexibility

The ability to scale the team up or down based on project needs without the complexities of in-house hiring.

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The Outcome: Building a scalable team to drive radical business transformation

Reed & Mackay launched with an initial team of 40 talent focused on engineering and testing. However, the model's success led to rapid expansion, with the team growing to 100+ professionals, expanding into product development, UI/UX, data engineering, and data analytics.

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Key Achievements over 18 months 

Data Engineering and Systems Modernization

• Stabilized core systems, eradicating frequent crashes and reducing customer complaints.
• Migrated to a modern cloud-based data warehouse, improving performance and scalability.
• Refitted the reporting infrastructure, resolving data inaccuracies and securing real-time insights.

Digital transformation and new business opportunities

• Developed seven to eight new systems that opened new revenue streams.
• Built and integrated a customized system for oil, gas, and marine clients, expanding into specialized industry solutions.
• Created event management and meeting solutions, enhancing service offerings.
• Integrated with rail and hotel systems, streamlining travel services for corporate clients.
• Enabled Reed & Mackay to offer third-party airline seats by integrating Amadeus into legacy systems, driving additional business growth.

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The three-layered impact of the virtual captive model

Cost Efficiency

• 45-50% savings compared to hiring in the UK.
• 25-30% savings over traditional offshore consulting models.
• Transparent cost structures ensured that resource utilization optimization, 

Scalability and Flexibility

• The model allowed Reed & Mackay to expand from 40 to 100+ employees within a year.
• Resources could be scaled dynamically based on business and project demands.

Operational and Business Impact

• Improved development speed, efficiency, and delivery quality.
• Streamlined workflows, replacing inefficient legacy processes with modern, scalable frameworks.
• Created a foundation for continued digital transformation and future expansion.

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The Virtual Captive Model provided Reed & Mackay with a scalable, cost-effective, and operationally efficient solution to its modernization challenges. The company reduced costs, accelerated innovation, and unlocked new revenue opportunities by structuring an offshore team that felt like an in-house extension.

Reed & Mackay's story demonstrates how a well-executed offshore strategy can go beyond cost savings and drive business transformation, operational excellence, and long-term growth.