Selecting The Right Pricing Models For Infrastructure Services

Pricing models, especially in infrastructure outsourcing contracts, are the key to making outsourcing progressive, agile, and flexible. Alternatively, they can be the root cause for a static relationship that doesn't evolve and that generates high levels of frustration from vendors and clients. The challenge for sourcing and vendor management (SVM) professionals is to identify the right pricing models for different types of infrastructure services — pricing models that support the business needs and also reflect the fundamental properties of the services. Most infrastructure services are highly standardized, commoditized, and sold in consumption-based pricing models, but there are other pricing options that support new service offerings. Consulting-based work and new services (that are not standardized and not commoditized) require pricing models that support their underlying goals and purposes. SVM professionals can drive more progress, innovation, and agility by introducing emerging pricing models into their relationships and including a pricing model review as part of the sourcing process.