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Evaluating IT Services Price Benchmarks under Uncertainty

Dimension Value
  • Type of the Research Result
  • Model
    • Descriptive Model
  • Current Status of Development
  • In Progress
    • Without Pilot Application
  • Number of Cases
  • None
  • Functional Area
  • Coordinating Processes
    • Strategic Planning of Product-Service-Systems
    • Core Processes
      • Core Processes Second Level
        • Distribution of Product-Service-Systems
    • Company Size
    • Not Specified
    • Lifecycle Phase
    • Not Specified
    • Types of Customers of Value Bundles
    • Not Specified
    • Industry Sector
    • Not Specified
    • Standardization
    • No Standardization

    IT  services  prices  change  as  technology  and  business  processes  evolve  and  competition  intensifies.  To  ensure price-competitive IT services over the life of the contract, client firms  often rely on price benchmarks,  whereby  a  third-party assesses the prevailing market price for the service. The authors provide a model to inform firms on the optimal timing and valuation of price benchmarks and assess the value of market price information  for  IT  services.  They find  that  IT  service-level  agreement (SLA) price benchmarks are most valuable for long-term contracts with significant price drift. Besides, they find that IT services price transparency  is  valuable  where  there  is  uncertainty  about  the price drift of IT services. We provide managerial recommendations based on our model for IT service price benchmarks.



    This research result was described by Sanja Tumbas (4. July 2011 - 16:11)
    This research result was last edited by Sanja Tumbas (13. November 2011 - 16:14)

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