Cost Plus Pricing

Cost Plus Pricing Strategy

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

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 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.


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.


The Cost Plus Savings


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)


Control Vs. Savings

BOT
Savings

Cost Plus

Time and Material

Fixed Bid

Control


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
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


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.
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


Cost Plus Pricing

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