Pricing IT outsourcing services has always been an area of
great interest and can be scanned through the lenses of both buyers and
suppliers.From the supplier’s point of
view, pricing is a combination of cost and margin.
Several factors such as location of resources,
maturity of the supplier, and complexity of the job content govern costs.Margin enjoyed by a supplier is a more
complex topic, which less tangible factors often drive.
For the purpose of this analysis we separated suppliers
depending on the location of majority of their service-delivery centers as
follows:
Multinational Suppliers.We observe multinational suppliers (MNCs) to be fairly mature in both
pricing and service delivery.They
frequently use complex pricing models and employ a mix of onshore and offshore
resources.
Indian Suppliers.We
observe Indian suppliers typically concentrate their operations in low cost
offshore locations and tend to gravitate toward lower complexity in pricing,
typically preferring an input-based model.
This whitepaper focuses on two areas of pricing:
Comparison of similar rates between offshore and MNC players
Comparison of margins on offshore rates across skills in ADM
and IO
This paper discusses:
IT outsourcing services pricing and its components
Onshore and offshore rates and the difference in these rates
and margins that offshore and MNC players charge
Note: this report is from 2012. See our most recent R2R research report.
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