IT Service Financial Management
Pricing Policy
It is not customary practice to set prices for IT services when the customer is the organisation itself. However, this is an essential step if you aim to use the IT infrastructure efficiently.
Knowing the real cost of the services provided and establishing a pricing policy that at least allows the costs incurred to be recouped, are essential prerequisites for the the IT organisation to be able to operate as a true business unit.
First of all, you need to define a pricing policy. There are several options, including:
- Cost plus margin: the total cost of the service is calculated and a profit margin is added (this could be 0% of "internal customers").
- Market price: services are charged for at the market rate for services of a similar kind.
- Negotiated price: the price of the services is negotiated directly with the customer.
- Variable price: depending on the IT capacity actually used and/or the objectives met.
Once the price setting policy has been set the rates for services have to be defined according to:
- The chosen policy.
- The services asked for.
- Scale and availability needs.
- The associated costs.
- The prices prevailing in the market.
In some instances these rates will be used for actual billing, while in others they will only be used as a reference when evaluating the theoretical performance of the IT organisation.
