An Example of Outcome-based Pricing in Revenue Cycle Management | Market Insights™
April 4, 2023
Revenue Cycle Management
Revenue Cycle Management
Selecting the right low code/no code pricing model is essential for enterprises to realize the many cost savings benefits these popular citizen-led development platforms offer to enterprises. Read on to learn about the various factors to consider to make the best choice for your organization.
The last few years have been rough for most enterprises, to put it mildly. The COVID-19 pandemic disrupted supply chains and forced many businesses to close their doors. The subsequent war in Ukraine and its ramifications, such as energy crises, supply chain disruptions, etc., left many business leaders struggling to make difficult decisions and pushed enterprises to quickly adapt to new ways of working.
With market uncertainty and macroeconomic impacts looming, enterprises are seeking innovative, cost-effective tech solutions to adapt to changing demands. Low code/no code platforms aim to bridge this gap of unrelenting business needs and the restricted bandwidth of IT teams through the rise of the citizen developer.
The increasing popularity of low code/no code platforms can be partially attributed to the diverse pricing options that cater to various customer needs. The extensive options offer customers greater flexibility to select the most suitable pricing to meet their requirements, enabling them to leverage low code/no code platforms and remain within budget constraints.
While offering a wide range of choices provides flexibility to procurement teams, it also can make it confusing and difficult to choose the option that works best in each context. Let’s simplify the different scenarios.
First, pricing options can be divided into these two categories:
Perpetual licensing – Customers pay a one-time fee to use an application indefinitely.
Subscription-based licensing – Customers pay a per user/application fee. This pay-as-you-go model has gained greater acceptance among enterprises, with over 80% of clients preferring it
Now, let’s compare the two most frequently used subscription-based licensing models below:
When does application-based pricing make sense? Application-based pricing models usually are starting points for organizations to explore low code/no code platforms. It allows them to dabble with the trend without breaking the bank because it is easier to control the number of applications. For example, an organization might use application-based pricing when replacing an HR Management System with a group of three applications (for core HR, learning and development, and payroll) built on low code/no code platforms
When does user-based pricing make sense? More mature enterprises that have had successful proof of concepts and are looking to scale this organizational capability will probably find user-based pricing more convenient. At this point, their objective typically will be to democratize low-code capabilities across the organization rather than to target specific use cases.
Keeping the number of internal and external users of low-code applications as one of the primary metrics for measuring success makes sense in scale-up mode. This model also allows enterprises to pay for actual usage rather than committing to a bundle of applications they may not deploy to production
Low code/no code platforms are the superheroes that enterprises need in the current uncertain and rapidly changing business environment. However, to achieve the elusive return on investment (ROI) that all enterprises look for, selecting the correct platform from the plethora of available offerings is equally essential to choosing the right pricing model.
Selecting an appropriate pricing model hinges on multiple factors, including an organization’s goals, development level, and intended use cases. Failing to properly align these requirements to the available models and pricing options can lead to either overpaying (by double or triple) for the requirement or result in dissatisfaction due to feature or usage restrictions at the chosen price point.
If your organization needs help in determining the right low code pricing model and the market price benchmarks for your low code/no code platform, email [email protected] or contact [email protected] or [email protected].
Watch the Software and Cloud Pricing and Contract Negotiations: Keep Spend in Check webinar to hear Everest Group’s software pricing experts discuss recent pricing trends, key tactics enterprises use to keep their software spend in check, and the outlook for software and cloud pricing in 2023.
Stiff competition in the large deal space among the large IT services companies is leading to a fall in pricing, stoking fears of a margin headwind in the coming quarters. According to industry insiders, though many numbers of cost takeout deals are coming to the market as enterprises are looking to save costs, competition is rising among both Indian and global players to increase their shares.
“It is clear that the pipelines are large and stacked with cost-saving deals. Most large firms have a significant number of mega deals in their pipelines; however, with everyone going after these deals, the close rates will likely drop,” Peter Bendor-Samuel, CEO at Everest Group.
Investing in cybersecurity can be costly for organizations but is essential in today’s risky environment. With a myriad of confusing pricing models, determining your cybersecurity spend shouldn’t be another threat. Learn some simple steps to feel more secure in negotiating cybersecurity pricing.
Contact us to further discuss this topic or for questions.
With demand for cybersecurity services skyrocketing in recent years, budgeting decisions have moved beyond IT discussions to C-level conversations by the boards of the largest enterprises.
This focus at the highest levels, along with the rapid evolution of cybersecurity technologies and services, has brought an unintended pain point – unwieldy cybersecurity pricing structures with a great deal of overpricing by providers.
The problem is exacerbated by a few practical issues, including:
It is not surprising that most enterprises we spoke with in the last twelve months were unsure whether they had struck the right deal with providers for their cybersecurity spend. Let’s explore this further.
Despite the nebulous structures, transparency in cybersecurity pricing can and should be achieved by following these four simple steps:
The potential savings that can be realized by going through this process can be substantial, as illustrated in this example of a large natural resources company that had a standalone cybersecurity services relationship with a Tier-1 IT service provider.
The relationship had comprehensive coverage across the security value chain (including endpoint security, host intrusion prevention, endpoint detection and response, identity and access management, cloud security, firewalls, email gateways, network intrusion prevention, security information, and event management).
The provider financed licenses for CrowdStrike and Netskope, while the client financed licenses for other platforms such as Symantec and Palo Alto Networks. The contract had a black box fee model for a defined range of volumes (number of endpoints, firewalls, gateways, EPS, etc.).
Working closely with the client through the four-step process described above, we benchmarked the current cybersecurity spend. As a result, the client locked in a 16% spend reduction at renewal, even though the general pricing trend in the industry was clearly inflationary.
For more cybersecurity pricing tactics to increase contract efficiency and competitiveness, please reach out to [email protected] and [email protected].
Hear from our pricing experts as they discuss recent pricing trends, key tactics enterprises use to keep their software spend in check, and the outlook for software and cloud pricing in 2023 in this webinar, Software and Cloud Pricing and Contract Negotiations: Keep Spend in Check.
Economic changes have taken the global market by storm, and Europe is no exception. In this webinar, our analysts will discuss changes in enterprise expectations and the defining characteristics of an outsourcing deal in 2023 in Europe.
Join us to learn what an ideal outsourcing deal in Europe should entail in terms of offshoring, automation, pricing and cost savings, engagement models, and contract terms.
Our speakers will discuss:
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Software License
Detection and Response
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