Value-Based Pricing Assessment

There is significant disparity in the prices IT services service providers charge for the roles they provide their clients. For example, pricing for a project manager can range from $116 per hour at the high end of the spectrum to $50 on the low end.

But outsourcing buyers should not make their selection or retention of one service provider over another based solely on price. They must also take into account the value each service provider can provide in relation to their own value priorities, or their own key value drivers.

For example, if the results of the assessment determine that risk management is the client’s top priority, its best-fit service provider is one that excels in avoiding cost overruns, meeting business objectives, etc., independent of the relative price charged by that particular service provider.

Everest Group’s Value-Based Pricing Assessment begins by capturing buyer priorities and service provider performance for each value driver. Everest Group analysts then use statistical analyses and predictive price modeling based on value permutations to neutrally guide selection or retention of the most appropriate service providers. The end-deliverable is a comprehensive document that enables the client to not only evaluate service provider pricing in terms of current value delivered, but also to predict the fair value pricing of future value delivered.