In Outsourcing Pricing and Implied Productivity, we discussed the advantages of understanding the underlying staff productivity assumptions in a supplier’s solution and pricing. What are the key IT infrastructure productivity measures that underpin a supplier’s price? We’ve found that in medium to large, full service infrastructure outsourcing deals, a few…
“Are you serious?” It’s a question we often feel like asking clients after they tell us they expect a service level of at least “four nines” from suppliers because that’s what they believe they are achieving. Yet many times, the client doesn’t have the historical performance information necessary to support…
When clients raise the question of the security of an outsourced service, it’s frequently a proxy for the feeling that they can trust/have control over their own people, but don’t really trust the service provider’s personnel. This type of concern showed up in a recent survey of CFOs conducted on…
When considering renewing and extending an outsourcing agreement, a different set of dynamics often comes into play when compared with the initial transaction. As organizations’ outsourced relationships change and mature over time, it’s a good idea to try and capture lessons learned by undertaking a post closing review in order…
Typically, the unit prices for outsourced IT infrastructure services include a base charge (or fixed price) and unit rates applied to defined units of consumption. The units could be physical devices, virtual instances, events (e.g., opening a help ticket) or any other measurable unit designed to account for changes in…
This question comes up whenever a client considers outsourcing IT. What they are really asking is: “Am I paying the right price for the entire life of the deal?” At the beginning of a deal the outsourcing customer typically relies on competition to get the lowest price. On the other…
I just got my new iPad and within a few hours, I was hooked on my new toy. After watching Letterman, I was thankful to learn I was in good company with my new addiction. When someone suggested I sync my tablet with my work email account, I wondered why…
My Mother always told me that cheaper is not a statement about price but rather a comment about quality. In the outsourcing world, cheaper has always been measured as lower unit rates, whether for application developers (dollars per FTE) or computing power (dollars per box or CPU minute) or for…
As the global economy shifts, the global market for offshoring services continues to expand. Countries that would previously never have been considered are now proving to be tempting destinations for outsourcing services. As we reported in this blog, forthcoming tax changes may affect the pricing available from the established Indian…
Cloud computing is getting a lot of traction in a time of shrinking budgets. Industry experts speaking at NASSCOM 2011 are expecting cloud based services to be roughly a quarter of the outsourcing industry over the next two years. So the business team is ready to move everything to the…