• Informatization Policy
• /
• v.31 no.3
• /
• pp.88-105
• /
• 2024

Many companies are adopting Information System (IS) operation outsourcing to focus on their core competencies and enhance operational efficiency. However, most of them employ a headcount-based pricing model, which often leads to exhaustive negotiations over contract costs without objective criteria or systematic frameworks. This headcount-based outsourcing contract environment results in low motivation/incentives for both client companies and IT service providers to improve productivity, efficiency, and quality, which poses challenges in securing a competitive advantage. This study introduces the development process of an IS operation outsourcing pricing model, which was collaboratively developed and agreed upon for implementation in actual contracts by an IT service company of a conglomerate. Also, the study underscores the activities undertaken to secure IT service competitiveness based on this model so as to deliver a practical guide for companies seeking to transition their outsourcing contract methods.