Managed Services Pricing Methodologies - Abridged

As the world of managed services has evolved, there has been a proliferation in the diverse array of services offered, leaving the challenge of how to optimally price managed offerings increasingly difficult to overcome. This research, conducted through The Evolution of Pricing Models for Managed Services research journey, set out to uncover how managed services organizations are pricing their offers and which strategies and practices are associated with better business results. Two separate studies were conducted around pricing methodologies that are being employed by managed services organizations—a quick poll and a more in-depth follow-up survey. The results from the two studies confirmed that the majority of managed services organizations continue to rely heavily on the traditional pricing models of cost-plus or a market-based approach to pricing their managed services offerings. Companies that have already leaned into the more forward-thinking pricing models of consumption-based and value-based pricing are seeing more positive outcomes compared to those traditional models. The emerging outcome-based pricing model is still nascent in the industry and requires the correct offer design to be a successful pricing strategy. Further, a deeper look at the survey results revealed an association between particular best practices for pricing managed services and the improvement of key performance indicators (KPIs) around growth and profitability.

                                   

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