03 Oct The future of pricing strategies?
I did a presentation for 60 of PWCs top QLD clients two months ago around the topic of micro-globalism and global-resourcing. It was well received and PWC purchased my book for all of them as well. One of PWCs partners spoke about their offshore teams and how they use them for back office accounting work. That’s nothing unusual, top tier firms all have offices in other countries and use them for this purpose and also for providing advice to clients in those countries. But its just not something that most people think about – WHERE is each part of my work actually being done?
One of the clients in the room jokingly said “so I guess my audit will be charged cheaper to me this year right?”
It was a joke but it’s really got the edge of a serious question. No one in the PWC room was opposed to PWC doing offshoring. What they cared about was firstly quality (because bigger companies are more risk averse), and secondly price – they wanted to see evidence of the reduced offshore costs within their invoices from PWC.
This question confirmed my previous observation that as time goes on, and awareness of global resourcing grows, there will tend to be greater transparency around offshore content within a service-based product, and how that impacts price. Eventually this will become a hallmark of a great business – knowing which parts are best done locally and which parts to do offshore. In some cases this will extend to companies offering the same service onshore or offshore, with an appropriate price difference. I already know of call centres and debt collection houses that offer these distinct products based upon geo location.
My IT firm, IT Leaders, has started experimenting with delivering projects to corporate clients by specifying what percentage will be done onshore vs offshore. In one notable example we came in at around 50% of a competitors price, and won a project which then turned into more projects.
This is the new business world we live in, and many industries will be impacted in this way. We are just at the START of the massive impacts to follow.
If you haven’t read my book already, grab a copy below and get up to speed on how the business world has changed.