analyticsRecently hosted a webinar about transaction costing. The topic is a perennial one with the EDI and supply chain professionals. In that webinar Tony Dukes provided an explanation of a cost analysis methodology he developed and has been using within his own work. But I wonder if there are more obvious indications of costs that you may be experiencing.

All the standard internal costs are in place, and if you've looked at Tony's spreadsheet (that you can download here) you can get a good idea of what your overall costs are. But there are those costs over which you have less control because they are provided by external service providers that you have contracts with. And the prices can fluctuate based on either contract provisions or arbitrary changes in price schedules.

Specifically these costs might include VANs and other connectivity options, subscriptions to analytical services, SaaS providers, and other outsourced managed services. We've heard recently that some providers have adjusted their charges, leaving customers few choices other than to agree to the new pricing structure.

I'm of the opinion that particularly with online (cloud or SaaS) services, prices for the same services should decrease over time because of economies of scale. Price increases for optional and increased functionality may be subject to increased or additional charges as they add value to the provider's offerings. The comments that we've received have indicated that while there are always additional services available at additional cost, some service providers have issued contract renewals that simply increase costs for the same services.

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