Publication Type
Conference Proceeding Article
Version
publishedVersion
Publication Date
8-2012
Abstract
Information technology (IT) services are often subject to downward price pressures due to improvements in technology and business processes in a competitive market. When clients enter into IT services contracts, they are faced with the future risk that their services will be overpriced relative to the broader IT services market. To mitigate this risk, clients often add benchmark provisions, whereby a neutral third party assesses the prevailing market price for services. It will support fair price adjustments if the market prices are lower than the current prices. We model the decision to benchmark in order to provide managerial information on the value of benchmark provisions. We ground the model empirically with data from a leading IT service provider.
Keywords
Benchmarks, Contracts, Economics, IT Outsourcing, Risk Management
Discipline
Computer Sciences | Management Information Systems
Research Areas
Information Systems and Management
Publication
ICEC '12: 14th annual International Conference on Electronic Commerce, Singapore, 7-8 August, 2012: Proceedings
First Page
270
Last Page
271
ISBN
9781450311977
Identifier
10.1145/2346536.2346587
Publisher
ACM
City or Country
New York
Citation
KAUFFMAN, Robert J. and SOUGSTAD, Ryan.
Valuation of Benchmark Provisions on IT Services Contracts. (2012). ICEC '12: 14th annual International Conference on Electronic Commerce, Singapore, 7-8 August, 2012: Proceedings. 270-271.
Available at: https://ink.library.smu.edu.sg/sis_research/1748
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
http://dx.doi.org/10.1145/2346536.2346587