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Outsourcing Pricing: The Key Trends Impacting Your Agreements

Michel Janssen, Chief Research Officer; Abhishek Sharma, Partner

Do you know what you don’t know? The method and manner of pricing outsourcing deals never stops changing. Some trends are rapid and significant – and others simply incremental.

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The value of our pricing research

Ensure you pay the right price every time with our pricing analytics

Contact us for detailed pricing analytics targeted toward your outsourcing needs.

As the leader in outsourcing pricing analytics, we give you a deeper level of expertise and data, ensuring that the price you pay matches the value you need without overpaying, or under-scoping.

Every shift in outsourcing strategy – automation/technology leverage, location, delivery model, solution dynamics – impacts pricing. From price benchmarks to strategic reviews of your engagement, the impacts of next-generation delivery models on pricing, to proposal and contract insights, we can help you on all your pricing challenges.

Outsourcing pricing models

Input-based pricing

Fee is linked to the time or effort delivered by the resource.

Example: Rate per hour for a developer resource.

Output-based pricing

Fee is linked to the output of a certain service or process.

Example: Price per invoice processed.

Outcome-based pricing 

Fee is linked to an actual business outcome.

Example: Fee for procurement strategic sourcing and category management which is linked to the committed savings achieved.

Our pricing and contracting offerings

Pricing Analytics as a Service

Enterprises often pay more than they should for outsourced services during the life of a contract. By relying on one-time, milestone-based benchmarking, they are likely to in catch-up mode for truly competitive pricing. Considering how fast the market changes, we believe organizations want to avoid pricing bloat, skewed contract terms, and underwhelming improvement efforts, they need continuous access to market data and expertise.

Pricing Analytics as a Service is an annual membership providing access to custom price benchmarks, performance metrics, and ongoing access to our pricing and contracting experts who are available to support you throughout the year.

Custom price and performance benchmarking
We assist clients in custom price benchmarking for services with multiple forms of benchmarking, from input-based to output-based to the surrounding pricing model, operational metrics, and contract. And we do this across IT infrastructure, applications development & maintenance, contact center, transactional processes, judgment-based processes and specialized skills.
Price benchmark catalog

The catalog is an off-the-shelf roster of the most common contemporary roles and resource unit price benchmarks based on live deals in the last 12-18 months. It covers benchmarks for all major IT and BPO functions across 30+ onshore, nearshore, and offshore locations. The benchmark catalog is refreshed bi-annually and coupled with on-call expert time to respond to queries or offer guidance.

Strategic engagement review

Pricing is important, but the true value of a global services engagement comes from best-in-class performance measures, equitable contract terms, and robust governance and pricing models. We can help you align all these dimensions and associated interdependencies to create an equitable relationship.

Service provider pursuit support

Enterprises expect targeted solutions, optimal pricing, and equitable contracting when selecting service providers. We help service providers clearly articulate their value and create a win-win relationship with their clients.

PriceBook

Enterprises often need quick access to pricing information. PriceBook is an off-the-shelf reference with insights on price, performance, and delivery metrics for key outsourced services. It also includes drivers that impact the pricing of ITO and BPO services in onshore, offshore, and nearshore delivery geographies.

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Blog

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Our pricing experts

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