Outsource Magazine Issue 27 - (Page 84)

PAYING ATTENTION? Ensuring the most appropriate pricing option is in place is essential – and, increasingly, a “pay as you use” transaction-based model is gaining traction… Sabimir Sabev, Novo Altum Sabimir Sabev is the director responsible for shared services and outsourcing at Novo Altum, a CFO advisory firm specialising in comprehensive transformation programmes. I 84 ● t’s a fundamental, but frequently overlooked, truth: choosing the right pricing option is critical to the success or failure of any outsourcing exercise. While this may sound obvious, often it isn’t, with many companies selecting the model which they think represents best value for money or will deliver the greatest efficiency gains, without considering whether it is really the most appropriate for the type of services to be outsourced. Of the myriad of different models for pricing outsourced business services, most organisations will opt for one of three main types:  Input-based – where the cost is based on the resources required to deliver the service (in much the same way that the equivalent retained in-house operation would have been costed).  Output-based – charged on the basis of results, for example, if a specific end-result is met such as a project being delivered on time and to budget.  Transaction-based – where you only pay for what you consume, rather like a household electricity bill. Flexible, transparent, costeFFective pricing model gains momentum… While input- and output-based models have tended to be the most common in the past, "There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man's lawful prey." – John Ruskin ● ● www.outsourcemagazine.co.uk http://www.outsourcemagazine.co.uk

Table of Contents for the Digital Edition of Outsource Magazine Issue 27

NEWS
PLANET ITO
NORM JUDAH MICROSOFT’S
IN THE KNOW
CALL BRITANNIA
DAVID EVELEIGH
CHAIN GAIN
CAN EVERYTHING BE OUTSOURCED?
NOA ROUND-UP
QUICK CHANGE?
TRANSFORMING FINANCE
CAROLINE STOCKMANN
GOOD REVIEWS
OUTSOURCING IS NOT MAKE VERSUS BUY: IT IS A CONTINUUM
PAYING ATTENTION
POWERING UP YOUR CUSTOMER SATISFACTION ENGINE
BEHAVIOURAL ECONOMICS
HEAD-TO-HEAD
TOP TEN
THE LEGAL VIEW
HFS RESEARCH
HEADLINES...
ONLINE ROUND-UP
INSIDE SOURCE
THE LAST WORD

Outsource Magazine Issue 27