Exploring Tariff-choice Preferences in B2B Enterprise Software Acquisition Settings

The acquisition of packaged software is gaining importance. The most crucial task during enterprise software acquisition is the selection of a software product and accompanying license model. The license model (or tariff) chosen severely impacts the total costs of the purchased solution over its life cycle and, thus, should be evaluated carefully. Existing literature from different decision contexts suggests that tariff choices are often times biased, leading to non-optimal decisions and costs. With this paper, we explore whether certain tariff-choice preferences and biases exist in the context of software acquisition. Hence, we analyse data from a multiple case study with five cases in four large organisations and base our findings on interviews with 19 decision-makers from IT, business, and procurement. The insights we gain from six interviewees especially point to the existence of both flat rate and pay-per-use biases in organizational contexts. Additionally, we find initial support for the relevance of prospect- theoretical reference points as a cause for tariff-choice biases. Therefore, our research can help practitioners to optimize their tariff choices in organizational buying situations and we present new avenues for future research.