- Series Information
- List of Figures
- List of Tables
- List of Boxes
- List of Contributors
- Why Are Prices Set the Way They Are?
- Airline Pricing
- Electric Power Pricing
- Health Care Pricing in the United States: The Case of Hospitals
- Pricing in Restaurants
- Pricing of On-line Display Advertising
- Consumer Credit Pricing
- Wireless Services Pricing in the United States
- For What IT’s Worth: Pricing Internal IT Services
- Television Advertisement Pricing in the United States
- Pricing in the Cruise Line Industry
- Less-than-Truckload Pricing
- Pricing in the North American Protein Industry
- Wine Pricing in the United States
- Pricing and sales practices at the Grand Bazaar of İstanbul
- Price Theory in Economics
- Models of Demand
- Game Theory Models of Pricing
- Behavioral Issues in Pricing Management
- Customized Pricing
- Nonlinear Pricing
- Dynamic List Pricing
- Sales Promotions
- Markdown Management
- Revenue Management
- Auction Pricing
- Services Engineering: Design and Pricing of Service Features
- Pricing in Business-to-Business Contracts: Sharing Risk, Profit, and Information
- Pricing and Inventory Management
- Structuring and Managing an Effective Pricing Organization
- Global Pricing Strategy
- Using Lean Six Sigma to Improve Pricing Execution
- Mastering your Profit Destiny in Business-to-Business Settings
- Current Challenges and Future Prospects for Pricing Management
Abstract and Keywords
This article focuses on pricing strategies for IT. It begins by describing the three factors that make it difficult to price IT costs: the shared ownership of IT services, customization of IT services which have no equivalent market product, and a ‘long tail’ of expenses over the life of those services. The article then discusses decomposing projects according to value and choosing the economic model.
Diogo Rau is a former Partner with McKinsey’s Business Technology Office in San Francisco where he led McKinsey’s IT organization and governance practice in North America, and served technology and financial services firms on a range of strategy, organization, and technology issues.
Paul Willmott is a Director with McKinsey’s Business Technology Office in London and a leader in McKinsey’s IT Organisation and Governance Practice. Since joining McKinsey in 1996, he has served firms across various sectors on strategy, organization, and technology issues.
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