Pricing - One of the things I learnt at ISB

Albeit a brief aberration in my student life, I was pretty sure that I have come to ISB to venture back into the Services Outsourcing industry or venture into the Retail industry, basically to leverage my past experience. Hence I was very clear in some of the topics that I wanted to learn.

Amongst them, learning some basics of Marketing was on top of the list. I always wanted to equip myself with the basic tools of Marketing and the MBA did help me in that. As I said in my previous post I will try to list down how an MBA has helped me in my job. Here is one example (not completely representative but pretty close)

As part of my current role our clients were looking to optimize their outsourcing contract with us and wanted our views on how we can assist them in deriving maximum value from us. This is where the idea of moving from a FTE (Full time Employee) based pricing to a TXP - Transaction Based Pricing was toyed with. We ended up proposing a very nice working model of the this approach which helped our clients pay only as and when they use our services and not pay for the extra bandwidth. This will give them a chance to save the dollars they were spending on the unutilized bandwidth. We on the other hand will get a good forecast of the revenue ahead and will help us drive our productivity better

My learnings at ISB really helped me during all of this amazing exercise. The Constrained Optimization principles helped in determining the Transaction Price. The Principles of Value based pricing (versus Cost Plus Pricing) helped us tie the actual benefits to the client. This also gave our client a clear price to charge back to its business users and gain more transparency. This was one assignment where I really put to use the various principles that I learnt in ISB proving once again that the time invested in ISB was worth it.