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Denmark Greater flexibility and transparency for outsourcing customers

New service and pricing model from TDS: dissatisfied customers pay less

June 18, 2009

With a new service and pricing model for outsourcing customers, Neckarsulm-based IT provider TDS is breaking new ground when it comes to pricing: the soft factor customer satisfaction now has a direct influence on cost. If customers are dissatisfied with the quality of the services they receive, they pay less. In addition, the new model increases flexibility and, with its clearly-defined parameters, ensures a high degree of cost transparency, including for SAP systems.

Customer satisfaction: more than just a platitude.
The new model introduces an additional aspect to the technical details set out in service level agreements: the soft factor customer satisfaction becomes an important criterion, too. Customers simply indicate on a scale via their service portal how satisfied they are with the outsourcing services they receive. If the customer’s rating falls below a certain threshold, not only is tried-and-tested action taken to boost satisfaction, but the price is also reduced.

“In the first projects of this kind, taking customer satisfaction into account when it comes to pricing has proved successful, and is now in great demand. Concerns over people intentionally entering lower scores to secure a price reduction have remained unfounded,” explains Konrad Meier, member of the Executive Board and Head of IT Outsourcing at TDS.

Easy-to-understand parameters – transparent charges.
The majority of dynamic pricing models available on the market use metrics that are difficult for the customer to understand, for example, SAP Application Performance Standards (SAPS). SAPS vary by release and cannot be measured and monitored consistently for all SAP applications. As a result, it is often difficult to verify the accuracy of charges invoiced. TDS’ new model introduces a dynamic aspect: in addition to a fixed monthly fee, there are variable components based on quantity and quality-related parameters. For example, customers can view the number of transactions executed (managed transactions) in their own SAP systems and keep track of the storage capacity they are using, including back up of data (managed storage). These metrics are key factors when it comes to transparent pricing. What’s more, customers can view the number of transactions performed by looking in their own SAP system. As a result, they gain an overview of charges on an ongoing basis.

In contrast to conventional flexible models, this approach enables maximum cost transparency. And in the light of fluctuating IT requirements, as a result of shifts in demand, takeovers or release changes, it offers key benefits for companies. The model enables outsourcing customers to respond rapidly and flexibly to change and provides access to the resources they need, when they need them. What’s more, it offers visibility into costs.

The customer decides.
The new pricing model is currently available for SAP outsourcing agreements. In the future, however, it will also be introduced for other services and solutions. In addition, TDS offers pricing and service models for companies with static or highly specific IT requirements.

Find out more about the new flexible pricing and service model at: (German version only).

About TDS AG

TDS offers IT outsourcing, IT consulting and HR services to mid-sized enterprises and major corporations. The company, founded in 1975, operates predominantly in the German, Austrian and Swiss markets. TDS offers highly tailored solutions in all areas of IT outsourcing – from selected applications to entire IT infrastructures, and with an emphasis on the SAP space. The IT consulting segment provides advice on SAP and Enterprise Content Management (ECM) systems. As a long-standing SAP expert, TDS has in-depth knowledge of the SAP portfolio. The HR services and solutions segment enables companies to outsource individual HR tasks or entire HR processes. TDS handles over 750,000 payroll transactions every month, making it Germany's market leader. Furthermore, companies deploying TDS Personal HR software handle a million payroll transactions. TDS also develops and markets software solutions for financial accounting and not-for-profit organizations, in particular charities, church institutions and local-government agencies. Currently, TDS employs more than 1,000 staff, and in 2007 posted revenues of approximately 106 million euros. In early 2007, TDS was acquired by Fujitsu, one of the world’s four largest providers of IT services. Fujitsu’s portfolio includes software and hardware solutions, as well as diverse services for a wide range of industries and applications. Fujitsu posted revenues of approx. 33 billion euros in fiscal 2007/08, and has a workforce of over 160,000 staff in 70 countries.

Michael Erhard

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Date: 18 June, 2009