EVOLUTION OF OUTSOURCING SERVICES PRICING IN FINANCIAL SERVICES SECTOR

Abstract

Outsourcing of finance and accounting has been constantly developing since 1990’s. Nowadays, the number of organizations delegating their finance and accounting to the outsourcing companies is growing steadily, as risk associated with business process outsourcing is being continually reduced by redesigning principles upon which services are priced and provided. Pricing mechanisms are one of the key determinants enabling FAO (Finance and Accounting Outsourcing) customers to pursue new quality of costsaving and service quality that combined with a proper understanding of market, risk assessment and effective negotiation can provide substantial and sustainable competitive advantage. The article gives a detailed overview of advantages and disadvantages of two typical pricing models that are available and in use by outsourcing companies today: Transactional pricing method and Fixed-price based pricing model. The main aim of this paper is to compare and evaluate chosen pricing models based on benefits they provide to the customer and their compatibility with different types of services provided.