Maintaining Market Pricing in Technology Agreements
Long-term technology service arrangements are dynamic by their nature. The buyer's business needs evolve, services are moved in and out of scope, and the market conditions that form the context for the service agreement can change before the ink is dry.
May 29, 2015 at 08:06 AM
7 minute read
Long-term technology service arrangements are dynamic by their nature. The buyer's business needs evolve, services are moved in and out of scope, and the market conditions that form the context for the service agreement can change before the ink is dry.
As a result, the pricing described in any contract is rarely more than a snapshot. The cumulative effect of pricing changes can drain your project of the value that once made it appealing.
It is possible to mitigate this risk by negotiating initial pricing that reflects your actual present and future business needs, obtaining commitments from the supplier regarding pricing and productivity, requiring committed price reductions to reflect the results of benchmarking, and leveraging your ability to shift the services away from the supplier.
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