![\"Pricing\"](\"https:\/\/www.jkspeaks.com\/wordpress\/wp-content\/uploads\/2013\/06\/Pricing.bmp\")
<\/a><\/figure>\n<\/div>\n\n\nDue Diligence<\/strong> \u2013 This phase charts out clearly defined and agreed-upon benefits with an up-front process to measure the resultant value. The consultant, based on his knowledge of the client, picks the least-effort-maximum-impact project that could bring about substantial savings to kick-start the \u201cDeliver\u201d phase. The consultant also identifies potential projects for implementation along with a roadmap. This is typically a consulting phase.<\/p>\n\n\n\nDeliver<\/strong> \u2013 In a short duration of, say, two to three months, the identified project must be executed and the savings required for reinvestment secured. If the consultant is going to take longer than three months, it’s better the project is reconsidered or not attempted unless there is a strong rationale behind it.<\/p>\n\n\n\nReinvest<\/strong> \u2013 The estimated savings over a one-year period from the \u201cDeliver\u201d phase would fund the potential projects identified in the “due diligence” phase. Projects will have to be hand-picked such that the funds are sufficient to implement at least 70-75% of the project. This is to show tangible benefits to the business for obtaining remaining funds.<\/p>\n\n\n\nCharge<\/strong> \u2013 Midway through the Reinvest phase, the consultant can show tangible benefits to the client and either charge for effort spent until then or ask for a percentage of the savings as a fee. This is more like a risk & reward model. End of the day, it all depends on the progress made and tangible benefits the client can see.<\/p>\n\n\n\nMaking it work:<\/h2>\n\n\n\n
The first step for the consultant is to convince his company that there is a lot of potential with the client. Secondly, he has to secure client buy-in before the engagement starts, which is not only tough but also risky. To make this model work, the consultant must:<\/p>\n\n\n\n
\n- Have sufficient knowledge of the client, his environment and culture (preferably worked with the client)<\/li>\n\n\n\n
- Good rapport with key stakeholders (business, IT, and top management)<\/li>\n\n\n\n
- Long-term commitment from the client and support when it comes to working with other vendors<\/li>\n\n\n\n
- Clear definition of scope of activities, quantum of work and the projects to be carried out<\/li>\n\n\n\n
- Follow caution in terms of explaining the model, billing and chargebacks when tangible benefits are realized<\/li>\n<\/ul>\n\n\n\n
The Risks:<\/h2>\n\n\n\n
If the “due diligence” and \u201cdeliver\u201d phases combined take a long time to show tangible results, the planned projects might not even kick off. If the due diligence was based on sub-standard analysis or incorrect assumptions, the savings obtained in the \u201cdeliver\u201d phase will not be substantial enough to meet the funds required for the re-invest phase. If the consultant cannot show visible progress or results at regular intervals, the project is destined for failure. Above all, the consultant must have a clear view on when to pull the plug should anything go wrong to ensure damage control.<\/p>\n\n\n\n
The presence of other incumbent vendors can also pose a risk if there is no client buy-in at the executive level to enable smooth implementation.<\/p>\n\n\n\n
Possible due diligence projects:<\/h2>\n\n\n\n
Here is a sample list of projects the consultant could consider for the least-effort-maximum-impact projects.<\/p>\n\n\n\n
\n- Technology stack rationalization<\/strong> \u2013 If the client has a host of tools in their environment, this is a good place to start. The savings obtained from licenses per year can be used for reinvestment<\/li>\n\n\n\n
- Lean BI projects<\/strong> \u2013 On occasions where the client has a lot of processes in place, which are age-old, attempting to study a few key processes and trimming them could help achieve the required savings<\/li>\n\n\n\n
- Centralization<\/strong> \u2013 If the client operates on a fragmented model, analyzing the impact of centralizing a few key processes could bring in efficiency and savings. Example: centralized report creation team<\/li>\n<\/ul>\n\n\n\n
Benefits:<\/h2>\n\n\n\n\n- Guaranteed Savings for the client<\/li>\n\n\n\n
- The consultant can build the client’s confidence\/trust and a possible long-term relationship<\/li>\n\n\n\n
- For the client, he gets to execute projects which he has been wanting to without having to go to the top management for funds<\/li>\n\n\n\n
- Prevent the client from floating an RFP. Caveat: Assuming the client does not have the funding to float a RFP<\/li>\n<\/ul>\n\n\n\n
Conclusion<\/h2>\n\n\n\n
There are several pricing models available in the market. What differentiates this model from the others is the fact that this is a combination of a risk-reward model and a result-oriented pricing model. Given today\u2019s market condition, this model is a win-win for both the consultant and the client if risks are understood and cautiously handled.<\/p>\n\n\n\n
#Pricing #Strategy <\/p>\n","protected":false},"excerpt":{"rendered":"
Abstract The financial services industry and the public services industry are currently faced with increasing regulatory norms, cuts in IT budgets, and a need for a strong IT foundation to stay ahead of the competition. Though the CIOs seem to be pushing for IT transformation projects, Gartner Survey indicates that \u201cFor 2013, CIO IT budgets…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[4],"tags":[79,77,78],"class_list":["post-439","post","type-post","status-publish","format-standard","hentry","category-consulting","tag-bi","tag-pricing","tag-strategy"],"acf":{"phase":"1","cluster":"Domain","topics":["Business Intelligence","Frameworks"]},"_links":{"self":[{"href":"https:\/\/www.jkspeaks.com\/wordpress\/wp-json\/wp\/v2\/posts\/439","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jkspeaks.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jkspeaks.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jkspeaks.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jkspeaks.com\/wordpress\/wp-json\/wp\/v2\/comments?post=439"}],"version-history":[{"count":4,"href":"https:\/\/www.jkspeaks.com\/wordpress\/wp-json\/wp\/v2\/posts\/439\/revisions"}],"predecessor-version":[{"id":1158,"href":"https:\/\/www.jkspeaks.com\/wordpress\/wp-json\/wp\/v2\/posts\/439\/revisions\/1158"}],"wp:attachment":[{"href":"https:\/\/www.jkspeaks.com\/wordpress\/wp-json\/wp\/v2\/media?parent=439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jkspeaks.com\/wordpress\/wp-json\/wp\/v2\/categories?post=439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jkspeaks.com\/wordpress\/wp-json\/wp\/v2\/tags?post=439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}