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 Which pricing model works best?
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h2index was contacted by a large manufacturing company to help them understand the different pricing models used for service desks as they prepared a request for proposal (RFP) for the provision of their global service desk.
The study investigated which pricing models were used by the most innovative multinational companies. The two commonest models are per seat and per ticket.
The client wanted to know which pricing model is best, the most common, and how companies use the models to influence and incentivise good behaviour both by the vendor and by users, for example:
- reducing the number of tickets
- increasing the percentage of first time fixes
- encouraging users to use cheaper support methods
Some of the results are shown below: the companies were specifically chosen by h2index because of their innovative approach to managing service desks. The contributors included consumer goods, finance, chemicals and communications companies: all were multinationals. Typically the person responding was the director of user services or head of infrastructure.
Phil Hopley, partner, h2index "Using our network of contacts in large corporations, we delivered our report to the client within two weeks."
Two thirds of respondents operated a per seat approach, one third a per ticket approach. Most also adapted the contract to achieve specific objectives, particularly to find ways of encouraging users to use less expensive forms of support.
| | *Vendor used for staff augmentation only |
There were strong arguments in favour of both models and it was clear that either can be made to work well.
The clearest outcome was that regardless of the basic model used (seat or ticket) there was a 100% correlation between adjusting the model and satisfaction. The four organisations that used either basic model were all unhappy with their service. The more thought that was put into fine tuning the model, the more successful it was. Each company made different adaptations, designed according to their specific needs.
There was strong evidence of a growing maturity and change in the relationships between clients and vendors. Historically service providers' sales teams were incentivised solely on bringing in revenues and not upon profits. As clients seek efficiency, the "per ticket" model potentially reduces the income for the vendor. It is better to incentivise the vendor to encourage users to use cheaper methods: cheaper for both the client and the vendor. Astute vendors realize that this enables them to improve profitability even if their revenues are lower. Simon Bennett, partner, h2index "Companies have wrangled over which model to adopt, but it's clear that either can be made to work, provided it is adapted. The critical issue is that organisations understand the behaviour that they want from their vendor and user community, and adapt the contract accordingly."
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User groups and forums
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h2index runs several forums where representatives of large multinationals get together periodically to share experience and views on topics of current significance. Their features include:- Small informal groups
- Selected and qualified IT managers
- Organizations of similar scale
- Discussing IT issues that really bother them
- Organised and facilitated by h2index
Unified Communications
The fifth unified communications (UC) forum meets on 19th October 2011 and is being hosted by Unilever at Ewloe, near Chester, UK.
The UC forum has evolved over the last two years. Senior IT managers wanted to meet their peers to share information about the opportunities in the rapidly developing telecommunications market. They believe that UC offers ways to increase business productivity and reduce costs. They want to keep abreast of the telecommunications consumer market and products like Skype, as employees expect their workplace to provide up-to-date facilities.
A few places are still available. Previous topics include:
- video strategies
- innovative uses of Lync
- approaches to smartphones
- IP telephony and PABX renewal
- impact of UC on ways of working
- how to construct a business case
Interested in joining our forums?
The UC forum is designed for large scale enterprises (tens of thousands of employees), operating in multiple countries, and participants include major international companies in pharmaceuticals, finance, insurance, transportation, energy, consumer goods, electronics and engineering.
We also run regular meetings on other topics such Microsoft Office 365 and end user services (EUS). If you would like to join any of our forums, please reply to this email. We work hard to ensure that the organizations in any one forum are of similar scale, face similar issues, and involve senior representatives directly responsible for the specific topic.
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Participants wanted
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h2index is continually undertaking research for its clients and each project requires a panel of representative organisations.
There are still opportunities to join the following studies.
End user services in global enterprises - annual benchmark
For the last five years, h2index has conducted a full benchmark of end user services operations in large enterprises. This year several clients have requested this research and have agreed to get together to define the requirement for the study and share the costs. They would welcome further participants to extend the data set and reduce the cost per participant. All participants will receive a detailed report.
Benchmarking is often commissioned only at times of change, but regular benchmarking enables companies to ensure they are constantly:
- exploiting the leading technologies, tools and processes
- monitoring their service quality against their peers
- keeping their costs competitive
Sourcing IT infrastructure
Our client is a major global company, which wants to know how its model for sourcing IT infrastructure compares with that of its peers. The study will investigate:
- How much IT infrastructure provision is outsourced
- Whether there are different location strategies for people and for equipment
- What proportion of infrastructure is provided from high and from low cost markets
- Where companies have outsourced, what is their experience
- How their outsourcing contracts deliver innovation over the medium and long term
The participants in either study will be senior IT managers in organisations with many thousands of users, complex business structures and continuous innovation.
If you are interested in taking part, please reply to this email. |
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If you found our newsletter useful, please forward it to colleagues who may also be interested. We are always delighted to receive feedback. Kind regards Phil Hopley and Simon Bennett www.h2index.com +44 (0) 1737 830993
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