Publication Type

Conference Proceeding Article

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

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://dx.doi.org/10.1145/2346536.2346587

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