Neil Barton

Thursday, February 26, 2009

Everest on IT Services Pricing

I found an interesting paper published by Everest on The Pandora's Box of IT Services Pricing ($249).

They compare rate cards from on-shore service providers and off-shore service providers, and find some differences which they describe as peculiar. (They don't say how many contracts they used in their research).

They also include an analysis of their view of supplier margins. For me, this is the really peculiar part, for while they break out the price structure of a supplier with confident authority, these pricing structures are almost never disclosed by suppliers, especially not to consultants whose primary living is to advise customers.

They conclude that "costs alone do not define rates charged by suppliers". No argument there, anyway, though it's a conclusion that's probably not worth $249.