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28th Hawaii International Conference on System Sciences (HICSS'95)
Hawaii, USA
January 04-January 07
ISBN: 0-8186-6940-3
J.C. Paradi, Centre for Manage. of Technol. & Entrepreneurship, Toronto Univ., Ont., Canada
M.D.R. Parsons, Centre for Manage. of Technol. & Entrepreneurship, Toronto Univ., Ont., Canada
G. Yan, Centre for Manage. of Technol. & Entrepreneurship, Toronto Univ., Ont., Canada
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.
Index Terms:
bank data processing; cost-benefit analysis; information systems; resource allocation; service pricing strategies; internal information system services organization; captive customers/markets; cost based pricing system; Canadian bank; bank services; fixed variable costing model; resource utilization records; resource utilization information; consumption habits; cost allocation; cost benefit analysis; investments; information technology; client cross subsidization
Citation:
J.C. Paradi, M.D.R. Parsons, G. Yan, "Service pricing strategies in an internal information system services organization with captive customers/markets," hicss, pp.504, 28th Hawaii International Conference on System Sciences (HICSS'95), 1995
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