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15 August 2010 · Article

Next Generation Pricing

The outsourcing industry has travelled a bumpy road in terms of pricing models since its birth in the late 1980s / early 1990s. Initially pricing was input-based: prices were set in terms of the amount of resource used. The resistance to accepting a move from the ‘old’ regime was down to suppliers being concerned about the risk transfer inherent in a service output-based model. In time though, suppliers have warmed to the new regime: it gives them control over the service inputs and, therefore, whilst suppliers bear the resource volume risk, they equally enjoy the rewards of delivering the service outputs in a more efficient manner. So what next?

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IAN DEEKS, Ten Squared Limited


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