Description:

Pricing is a challenging and emotional issue, hotly debated throughout the technology industry. While some believe that pricing is largely an exercise of data collection and analysis, it is much more an exercise of creativity and control. And the challenges can seem overwhelming at times.

Services marketers and others involved in pricing professional services face a variety of challenges. ITSMA research shows that:

• Approximately one-third to one-half of all services are sold at a discount.
• Many services firms do not understand their costs to deliver services.
• One-quarter of professional services contracts come in over budget.

Moreover, services marketers often do not have full control over the pricing process. Pricing is typically done by "committee;" representatives from sales, services operations, executive management, and finance all have roles and their own agendas.

This study, based on interviews and data collection with 13 information technology (IT) services firms, examines the pricing process and benchmarks current practices in a number of areas, including:

• Pricing organization and staffing
• Strategies
• Methodologies
• Billing and utilization rates
• Discounting policies
• Margins

The firms included in the study are Agilent Technologies, Alcatel U.S.A., Avaya, BMC Software, Compaq Computer, Lucent Technologies, Nortel Networks, Siemens Enterprise Networks, Siemens Medical Solutions Health Services, Sybase, Synopsis, and Veritas.

For more information or to purchase a copy of ITSMA's Professional Services Pricing Study contact Rob Leavitt at +1-781-862-8500, ext. 45, or rleavitt@itsma.com.