A Unified Framework for Specifying Cost Models of IT Service Offerings

Abstract

Information technology (IT) service providers compete to win highly-valued service contracts in a tender-like kind of process. The process starts with clients submitting a request for proposals, for which competing providers prepare a solution that covers the client requirements, and then begin the negotiation with the client trying to win the deal. Traditionally, IT providers design solutions by establishing a laundry list of services that the customer needs. Then, they try to cost and price each of these services individually. The more recent trend is that IT providers identify and design solutions that integrate a set of services bundles, usually called offerings, to allow for standardization and usage of economies of scale. This makes defining cost models for such integrated solution challenging as there is no consistent way to specify these costs for individual offerings which may have their own characteristics. In this work, we provide a unified framework that provides a consistent approach for specifying cost models for different service offerings while being flexible enough to handle individual differences among them.