cost plus pricing

Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.

Cost Plus Pricing Strategy


Presentation Contents

� The Cost Plus Pricing Model

� Process for Setting up the Virtual Team

� The Cost Plus Savings

� Virtual Team Composition

� ODC - Infrastructure Facilities

� ODC - Management Support

� The Cost / Fee

� Benefits

� Reach us


Cost Plus Pricing Model


Cost Plus Pricing

Commonly known as the “open-book" pricing, here, you pay for the

actual infrastructure services cost plus a markup or profit margin and

Management support fee for the desired period. This is a hugely popular

model in outsourcing arrangements. This model is frequently used as an

Interim contractual measure and is ideal for efficiency deals.

What You Get?

� Complete openness

� No hidden fee

� No hidden agenda

� Team Playing atmosphere


The Strategy

When

� Cost-Plus Pricing is a strategy followed when the owner knows the direct cost of every product unit sold, as it is sold to the customer.

What

� The direct cost of every product unit of a software includes the cost of everything you spend from the moment you begin working on the project to the moment your product reaches the market. i.e. the cost of acquiring the product from an independent software vendor, plus its license cost plus the cost of everything that is done for it directly or indirectly (hiring manpower/resources, infrastructure facilities such as computer equipment, backup electricity, A.C., security personnel etc.) and management support to prepare it to work. All of this taken care of under the cost-plus pricing strategy.

Requirement

� Cost-Plus Pricing requires the product owner to keep detailed records of direct costs and to monitor them frequently to detect changes.

Empowerment

� This information empowers the product owner to react quickly to changes in supplier costs and the competitive price environment.


Virtual Team Set-up process


How it Works – Step One

� Upon getting a requirement we draft a person's profile. This profile, which includes your desired qualifications for the resource and required experience, is circulated among our human resource databanks and consultants. We then provide you with a choice of resumes to narrow down the ideal candidate. Once you have short listed, you can then interview them before final selection.

� The resources can be hired by you directly or be transferred/relocated from your existing development center.

� Either way the resources would be on our payroll and paid monthly.


How it Works – Step Two

� We will raise a bill in advance every month for the resource salary plus the cost for using our delivery center facilities. The details of the same are provided in the following slides.

� These resources will work directly under your command and would be available for you during the desired time. We provide the management support and supervise the resources on your behalf sothat you get the best possible output without taking any chance.


The Cost Plus Savings


The Analysis

Mode of Operation

On-Site15 people

at US$ 50-60/hour

Cost Plus Engagement15 people

at US$ 23-25/hour

Annual Costs

US $

1.44 mil

US $

662.4 K

65 %

Savings

(rates dependent on project scope and requirements)


Control Vs. SavingsSavings

Control

� BOT

�Cost Plus

� Time and Material

� Fixed Bid


Virtual Team Composition


Virtual Team Composition

Each resource takes on one or more roles; perhaps one resource focuses

on project management whereas another may be actively involved with

Both design and implementation of the project system. The Team can

comprise of the following depending on your project (s) requirements:

� Project manager

� Analyst

� Architect

� Database administrator

� Designer

� Operations/support engineer

� Programmer

� Quality assurance engineer

� Requirements analyst

� Tester


ODC - Infrastructure Facilities


Infrastructure (included in Seat cost per resource)

� Branded workstations with 2 GB RAM, 80 GB HDD, OS – XP/ Vista, standard MS Office

� Uninterrupted power supply for seamless operation

� Conference room

� 24x7 manned security with advanced security monitoring systems.

� Electronic card based access control systems

� Internet and email access for all team members

� International numbers enabling clients to call iBoss ODC locally

� Structured cabling for all workstations

� Standard internet connectivity

� Data security as per ISO 27001 standards

� Pantry Services – Tea/ Coffee


ODC - Management Support


Management Support(Included in Management Fee)

� Hiring of resources

� Monitoring of resources

� HR related issues

� Managing payroll

� Withholding taxes on salaries

� Export of services documentations

� STPI compliances

� Maintaining accounts, books and records and other MIS required

� Other compliance required


Cost / Fee


Cost / Fee

A percentage of total cost

excluding the seat cost per

resource.

Management Fee

As per actuals.Specialized equipment or

software

A percentage of the Annual Gross

Salary.

Consultants fee for hiring

FixedSeat cost per month.

As per actuals.Fixed Salary

Know the rates today [email protected]


Benefits


Benefits

� Easy to calculate

� Easy to administer

� Minimal information requirements

� Direct control on quality, delivery and resources

� Insures you against unpredictable costs

� Your ODC, Your team, without set-up hassles and costs


Reach us


We're easy to talk to - tell us what you need.

iBoss Tech Solutions Pvt. Ltd.

India Office

B-59, 1st Floor,

Sector 63

Noida – 201301,(NCR Delhi)

India Phone: +91-120-3937314

US Phone: +1-818-337-4553

UK Phone: +44-208-819-9751

Website: http://www.ibosstechsolutions.com

Email: [email protected]

USA Office

6916, Castle Peak Drive,

West Hills, CA 91307

Phone: +1-770-783-1155

cost plus pricing

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