I worked with this client to establish a new pricing approach that measured the client’s application maintenance environment and asked the provider for fixed prices based on asset unit counts.  So, rather than counting full-time-equivalent skill sets and using a Rate Card; the provider set AMS prices based on tangible asset counts.  For example, in the EDI area, the number of maps in the environment was counted.  A unit price was developed for a ‘bundle’ of maps.  As the number of maps fluctuated over time, the fixed price changed to the client.  Given the trusted relationship and good governance methods between this client and provider, it worked to everyone’s benefit.

But that benefit was no surprise.  The big surprise was how the conversation improved between the client’s senior IT staff and the business end-users.  “We finally could have an intelligent, thoughtful dialogue regarding maintenance services and prices with our end-users” reported the client IT leader.  “The business users understood the price model and could see what they were receiving for the price; and relate those activities to the service levels they had requested.” 

I truly believe that hidden value lies in price methods that move away from staff and budget models.  When a provider reveals the basis upon which staffing is developed – which typically is asset count and service level based – then commercial relationships may reach new levels of mutual satisfaction.