Your SlideShare is downloading. ×

Cost Plus Pricing

8,688

Published on

This presentation will provide you with a clear understanding on how the cost plus pricing works for software development.

This presentation will provide you with a clear understanding on how the cost plus pricing works for software development.

Published in: Technology, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
8,688
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
263
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Cost Plus Pricing Strategy Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 2. 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 Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 3. Cost Plus Pricing Model Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 4. 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 Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 5. 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. Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 6. Virtual Team Set-up process Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 7. 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 data banks 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. Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 8. 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 so that you get the best possible output without taking any chance. Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 9. The Cost Plus Savings Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 10. The Analysis Mode of Operation Annual Costs 65 % Savings On-Site 15 people US $ at US$ 50-60/hour 1.44 mil Cost Plus Engagement 15 people US $ at US$ 23-25/hour 662.4 K (rates dependent on project scope and requirements) Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 11. Control Vs. Savings BOT Savings Cost Plus Time and Material Fixed Bid Control Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 12. Virtual Team Composition Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 13. 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 Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 14. ODC - Infrastructure Facilities Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 15. 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 Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 16. ODC - Management Support Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 17. 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 Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 18. Cost / Fee Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 19. Cost / Fee Fixed Salary As per actuals. Seat cost per month. Fixed Consultants fee for hiring A percentage of the Annual Gross Salary. Specialized equipment or As per actuals. software Management Fee A percentage of total cost excluding the seat cost per resource. Know the rates today enquiry@ibosstechsolutions.com Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 20. Benefits Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 21. 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 Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 22. Reach us Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.
  • 23. We're easy to talk to - tell us what you need. India Office B-59, 1st Floor, Sector 63 Noida – 201301,(NCR Delhi) India Phone: +91-120-3937314 US Phone: +1-818-337-4553 iBoss Tech Solutions Pvt. Ltd. UK Phone: +44-208-819-9751 Website: http://www.ibosstechsolutions.com Email: enquiry@ibosstechsolutions.com USA Office 6916, Castle Peak Drive, West Hills, CA 91307 Phone: +1-770-783-1155 Copyright 2009 iBoss Tech Solutions Pvt. Ltd.. All rights reserved.

×