Gartner Research

Save Time and Money With 50 Contracting and Pricing Applications Outsourcing Guidelines

Published: 21 March 2013

ID: G00248643

Analyst(s): Grant Bayne, Gilbert van der Heiden , Frank Hersbach


Sourcing managers acquiring application services should apply 50 guidelines to improve their applications outsourcing contract, particularly for changes in rates, pricing indexes, currency fluctuation, incentives, discounts and improvement over time.

Table Of Contents
  • Key Challenges



  • Transparent Pricing: Audit Rates and Embed Benchmarking Clauses in Your Contract
  • Actively Measure and Manage Offshore Versus Onshore Ratio Evolution Over Time
  • Aim for Prices per Unit That Buyers Can Measure and Control Themselves, and When Using Vendor-Defined Units, Ensure Buyers Understand the Cost Model Behind it
  • Limit the Use of Indexing to a Single CPI Only, and Select a CPI That Preferably Is the Country's CPI of the Legal Entity That Signs the Contract
  • Determine Incentive Ranges From a Historic Data Baseline; Ranges Need to Be a Realistic Representation of Targets That Can Be Realized, not Targets That Might Be Realized

Recommended Reading

©2020 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form without Gartner’s prior written permission. It consists of the opinions of Gartner’s research organization, which should not be construed as statements of fact. While the information contained in this publication 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 research may address legal and financial issues, Gartner does not provide legal or investment advice and its research should not be construed or used as such. Your access and use of this publication are governed by Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its research is produced independently by its research organization without input or influence from any third party. For further information, see Guiding Principles on Independence and Objectivity.

Already have a Gartner Account?

Become a client

Learn how to access this content as a Gartner client.