Tuesday, 23 October 2018

Business outcome pricing will be a critical differentiator for technology vendors

Angel Dobardziev for the Total Telecom Content Network
Tuesday 15 May 18

Most IT services contracts today are delivered on either a ‘time and materials’ (T&M) or fixed price arrangements, with T&M historically being the lion’s share of the deals. When a large client, say a telco or a pay TV provider such as BT or Sky, hires an IT Services vendor such as IBM or Wipro for IT systems integration or management work, more often than not it is done in a ‘body shopping’ arrangement (as T&M is typically called in the trade). Fixed price contracts have also grown over the years for system development and integration projects such as implementing new billing or analytics systems, especially those using Waterfall development methodologies. Neither T&M nor fixed price arrangements have been ideal for enterprises in general, and telecoms and media clients in particular. The instances of major system delays, cost overruns, systems not fit for purpose, IT contract clashes (and derailed careers as a result) are too many to count in the telecoms and media industry and beyond…

Most IT services contracts today are delivered on either a ‘time and materials’ (T&M) or fixed price arrangements, with T&M historically being the lion’s share of the deals. When a large client, say a telco or a pay TV provider such as BT or Sky, hires an IT Services vendor such as IBM or Wipro for IT systems integration or management work, more often than not it is done in a ‘body shopping’ arrangement (as T&M is typically called in the trade). Fixed price contracts have also grown over the years for system development and integration projects such as implementing new billing or analytics systems, especially those using Waterfall development methodologies. Neither T&M nor fixed price arrangements have been ideal for enterprises in general, and telecoms and media clients in particular. The instances of major system delays, cost overruns, systems not fit for purpose, IT contract clashes (and derailed careers as a result) are too many to count in the telecoms and media industry and beyond…

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