That is an interesting concept. Manages the annual cost for t
Doug,


That is an interesting concept. Manages the annual cost for the customer and guarantees a level of revenue for the vendor. The only problem is when things get crazy. My experience over time has been the all in costs for commercial records centers for a moderately active account work out to around $5 per cubic foot per year. I've found that to be a useful budgetary number, although far from scientific and certainly not representative of a very large sample size. But it seems to work when I have tested it. That said, if I were a vendor, I'd want a fair amount of history before considering a fixed fee deal. I think that many organizations are hard-pressed to articulate their "normal" levels of activity and thus have trouble estimating the annual spend to begin with.

Contractually, I think a vendor would have to set some limits. In other words, a fixed fee only applies to standard services, there are volume and activity caps, and so forth. I'm not sure that such an arrangement would do anything other than create a budgeted expense, but anomalies to what is "normal" clearly blow the model out of the water. I doubt that a vendor would want to assume normal activities, then be presented with a 10% retrieval volume for litigation. Likewise, I doubt a vendor would like this sort of agreement, then find out that the customer wanted to destroy 20% of their volume in storage. The risk is really driven over to the vendor and the only upside is if the customer underutilizes the contracted services.
 
Patrick Cunningham, CRM, FAI
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