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Diane WhiteIT Perceptionsdwhite@it-per.com

Pre-benchmark before you sign your contract or invoke your outsourcing contract benchmarking clause

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Benchmarking your contract can be dangerous because: • You may not know the potential savings or ‘size of the prize’,

if any • You may accidentally fall foul of the KPIs that are likely to be

used in benchmarking• You may have excess volumetrics (eg unused email

accounts) that you should fix first• You may not get another chance for a few years

Current Situation

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• Your service provider has probably got a team ready to rebut undesirable benchmarking findings

• Legal challenge of benchmarking findings is on the increase by both clients and service providers

• Over extensive normalisation reduces the gap and an ‘its OK’ result is increasingly the norm

Complication

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• This is informal benchmarking of the outsourcing contract with no input from the supplier

• We use the KPIs that are likely to be used by major benchmarking firms enabling appropriate analysis, consideration and modelling of outcomes

• It provides high level ‘size of the prize’ assessment to identify pain vs gain executive decisions

Pre-benchmarking

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For example, the number of:• Email accounts • Service Desk incidents• Service requests• IMACs (Installs, moves,

adds, changes)• Desktop / laptops• MIPS

• Locations• Network ports• Databases • Servers • Data storage• Computer rooms• Service hours

KPIs – Attention to the workload denominator in KPI equations is key to success

a subset of 45 workload types / KPI denominators

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• Pre-benchmarking gets the collective contract team thinking to a higher level prior to the selection of the benchmarking firm

• The RFP will be more rigorous and challenging, enabling a higher quality and more robust benchmarking deliverable

Benchmarking vendor selection

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• Normalisation of differences between your topology, SLA, contract duration etc vs reference group peers can be the cause of extensive analysis and challenge by unhappy service providers

• It is important to have benchmark peers that closely match your characteristics reducing the need for too much normalisation

Death by normalisation

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• Most benchmarking clauses are written by professionals with limited ‘real world’ benchmarking experience

• Therefore these clauses make demands on benchmarking firms that are unrealistic, given their database

• This means that these firms can be out of their comfort zone and are more likely to come in with a result that will not be challenged by the service provider

Check the contract wording

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• The same two major benchmarking firms are generally named in contracts

• Other firms and benchmarking products provide solutions that may provide a better fit to your contract

• It is important to keep your options open within the benchmarking clause

Benchmarking firms

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• The pre-benchmark will include a ‘real world’ review of the benchmarking clause to understand the implications given the standard methods used by most benchmarking firms

• It may be that a blend of several benchmarking firms is required to meet your requirement

Review the benchmarking clause

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• Our four stage process enables us to work off-line for any English speaking country & on-site in Europe

• Our consultants are ex-Compass or Gartner with over 15 years field experience

• We provide a totally discrete and confidential service• Our charges are a fraction of the Tier 1 providers

Pre-benchmarking in practice

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Benchmarking is totally different to comparisons during procurement, so get ahead of the game by pre-benchmarking your contract in order to avoid nasty surprises

The Take Away

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Diane WhiteIT Perceptionsdwhite@it-per.com

I hope that this has been helpful ..

Please contact me or my team for a contract pre-Benchmark or other benchmarking matters