Title :
Service pricing strategies in an internal information system services organization with captive customers/markets
Author :
Paradi, Joseph C. ; Parsons, Mark D R ; Yan, Gloria
Author_Institution :
Centre for Manage. of Technol. & Entrepreneurship, Toronto Univ., Ont., Canada
Abstract :
A cost based pricing system is proposed as a better alternative to the Information Technology service pricing strategy currently administered by The Information and Communication Technology Services group (I&CTS) of a large Canadian bank. Two bank services were selected for this study. A fixed variable costing model was applied to the services´ 1990-92 resource utilization records. Growth, inflation, and functionality estimates were applied to the costing data to produce services prices for 1991-93. The cost based pricing system communicates resource utilization information to I&CTS clients. Empowered by this knowledge, clients can modify their own consumption habits to reduce the costs for their use of I&CTS services. This pricing system provides a proper cost allocation to assist in the cost benefit analysis of investments in information technology and minimizes client cross subsidization
Keywords :
bank data processing; cost-benefit analysis; information systems; resource allocation; Canadian bank; bank services; captive customers/markets; client cross subsidization; consumption habits; cost allocation; cost based pricing system; cost benefit analysis; fixed variable costing model; information technology; internal information system services organization; investments; resource utilization information; resource utilization records; service pricing strategies; Communications technology; Costing; Costs; Information analysis; Information systems; Innovation management; Management information systems; Pricing; Resource management; Technology management;
Conference_Titel :
System Sciences, 1995. Proceedings of the Twenty-Eighth Hawaii International Conference on
Conference_Location :
Wailea, HI
Print_ISBN :
0-8186-6930-6
DOI :
10.1109/HICSS.1995.375634
