Creating a Service Pricing Strategy

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ID Number: G00138617

This research is provided for historical perspective;
portions of this document may not reflect current conditions.

2 May 2006

Barbara Gomolski

If you're managing an IT organization, then you're running a business. Developing a pricing strategy for IT services requires a nontraditional approach to IT financial management.

Price: US$495.00

Pages: 13

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Table of Contents

1.0

Introduction: Goodbye, Chargeback; Hello, Service Pricing

1.1		The Traditional IT Organization vs. the Service Organization
1.2		The Importance of the Service Portfolio

2.0

Determining the Cost of IT Services

2.1		The IT Funding Model and Its Impact on IT Service Management
2.2		Determining the Cost and Price of IT Services
2.3		Pricing Services
2.4		IT Resources Must Be Allocated to Services
2.5		Over-Recovery and Under-Recovery
2.6		The Emergence of the IT Finance Manager

3.0

Case Study: A Large Financial Services Firm

3.1

Customer Pricing Expectations

4.0

Service Pricing Strategies Going Forward

4.1

Establishing Service-Level Agreements

5.0

Conclusion and Recommendations

List of Figures

	Figure 1.	Contrasting the Service Organization With Traditional IT

	Figure 2.	Determining the Cost and Price of Services

	Figure 3.	Which Components Drive Risk Contingencies?

	Figure 4.	Class of Service Drives Price and Architectural Requirements

Chargebacks
Service-Level Management
Internal IT Service Management
Pricing Strategies

© 2006 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

Resource Id: 491847