Managing Discussions About Price Increases in
IT Operations Agrements
How do factors such as rising hardware and software prices, labour costs, and energy prices affect the cost of IT infrastructure operations? In this article, we answer these questions by examining the mechanisms that drive market prices for IT operations services and guiding customers through a scenario in which a vendor announces a price increase.
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Any organization that provides IT infrastructure operations – whether an external service provider or an internal IT operations function – is affected by a range of internal and external factors that can cause the cost of service delivery to increase or decrease. Understanding these factors is essential for anyone involved in discussions about the pricing of IT operations services.
When a vendor announces a price increase, there is good reason to initiate a dialogue.
This article examines how to assess the impact of these factors on the actual cost of delivering IT operations services and the extent to which they affect vendors’ overall cost structures. Finally, we provide practical advice on how customers should respond when a vendor announces price increases due to extraordinary changes in its cost base, as well as what vendors should be prepared to explain and substantiate in the resulting discussions.