By Kunal Kant, Sr.,Category Manager-Sourcing & Procurement, Infosys Ltd.
While talking about ‘Sourcing’, first thing that comes in the mind of a sourcing executive is a ‘Product’; rarely we give a thought to the Sourcing of Service, and thus it remains one of the most neglected ‘item’ from the list of the sourcing executive. In today’s business environment, ‘Services’ plays a vital role for industry of any nature. Most of the labor intensive and low-grade jobs are being given on contract (third party service provider). The value of such jobs for large industries comes in the tune of millions of dollars per month whereas for medium and small industries this figures varies from several thousand to millions of dollars. Normally contract rates (i.e. Pricing of Services) are decided on the basis of simple negotiations, which do not have any scientific basis. This article provides a scientific base for the calculation of Pricing while sourcing a service to a third party service provider. Though one case has been depicted here, but the similar concept can be applied for any service-able item.