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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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Home / Custom Decision Support / Pricing & Contracting

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.

The value of our pricing research

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.

Our pricing and contracting offerings

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.

Price benchmarking on-demand

Our price benchmarking on-demand service provides comparative pricing data and rate card data by job role and location, across functions such as applications services, systems integration and professional services, and up to 19 job roles from junior developer to data integration architect. The data is drawn from our comprehensive live-deal benchmarking database, adjusted for Tier 1, 2 and 3 locations in up to 30 countries across Europe, North America, Latin America and Asia.

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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Our pricing experts

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