The prevalent pricing method for a managed service program continues to be fee as a percent of spend through the program, with 80% of all clients via this pricing model. “Other” in this example may represent a gain share or an outcome-based pricing model.
Pricing models within statement-of-work programs show a wider adoption of alternative pricing models. Given the often-higher value of SOW arrangements, a pure spend under management arrangement can prove costly for buyers as spend increases. Where spend under management is combined with a supplier funding model, issues with supplier buy-in can stifle adoption.