Ron Baker on hard times
Ron Baker of Verasage asks in a posting this week "what the burning platform will be that will, ultimately, force firms to give up the Almighty Hour" - will it be the recession or something else? The recession - like any change in the economy - accelerates capitalism's process of creative destruction, putting more pressure on broken and unworkable models than on better ones. However I agree with him that, on its own, that will not be enough to trigger the change. A combination of factors will contribute to this - and their combined strength will determine when the tipping point is. A recession, by making buyers risk-averse, will encourage value pricing because it acknowledges and reduces the buyer's risk New information technology enables better measurement of the value generated for clients, and therefore allows prices to be based more directly on it Competition will operate - once a significant number of supplier firms start to offer structured or value-based prici...