Professional Documents
Culture Documents
Why benchmark?
Put simply, things change prices, practices, even
politics. And all of these changes can impact your
outsourcing contract, whether youre a buyer or
provider of outsourcing services. For example,
Alsbridge ProBenchmark market data shows a 6%
8% annual market decline in the price of F&A
services in the marketplace prior to 2011, and we
have every reason to expect that decline will
continue. That change could have significant impact
across a five-year contract!
Several forces drive these changes and greatly
impact the provision of services, whether they are
IT, F&A, sales, HR, or any other:
_________________________________________________________________________________________
World-class Sourcing Advisory and Benchmarking for the CIO, CFO and CPO.
Contact: info@alsbridge.com or (214) 696-6410
22%
17%
Every year
Every two years
3%
_________________________________________________________________________________________
World-class Sourcing Advisory and Benchmarking for the CIO, CFO and CPO.
Contact: info@alsbridge.com or (214) 696-6410
Latest Trends
_________________________________________________________________________________________
World-class Sourcing Advisory and Benchmarking for the CIO, CFO and CPO.
Contact: info@alsbridge.com or (214) 696-6410
Benefits
Cost savings The first benefit everyone thinks of
when benchmarking an outsourcing contract, of
course, is cost savings. Cost savings are a vital
takeaway from the benchmarking process. In
Alsbridges experience, using benchmarking in a
competitive bid can impact pricing significantly from
the initial RFP response to the actual contract
signing 15% to 20%, and even much more in some
instances.
A recent Alsbridge poll of buyers of IT outsourcing
buyers indicated the following savings typically
identified from a benchmark.
46%
27%
1% - 10%
10% - 25%
8%
5%
25% - 50%
>50%
_________________________________________________________________________________________
World-class Sourcing Advisory and Benchmarking for the CIO, CFO and CPO.
Contact: info@alsbridge.com or (214) 696-6410
Best Practices
In the wrong hands, benchmarking can be a difficult
process, even if all parties go into it with open eyes
and positive expectations. Every benchmarking
effort must be carefully considered, well-planned
and effectively executed in order to produce a
meaningful, actionable outcome.
Context is required A benchmark is one of many
data elements in a complex program. Benchmarking
data should not be used to the exclusion of other
valuable inputs.
Be prepared for the unexpected It isnt common,
but buyers can (and do) find theyre actually
underpaying, and then can be contractually
obligated to pay more. In any event, all parties
should go into a benchmarking exercise looking for
new insights and opportunities to improve service
and price performance in both the short and long
term.
_________________________________________________________________________________________
World-class Sourcing Advisory and Benchmarking for the CIO, CFO and CPO.
Contact: info@alsbridge.com or (214) 696-6410
_________________________________________________________________________________________
World-class Sourcing Advisory and Benchmarking for the CIO, CFO and CPO.
Contact: info@alsbridge.com or (214) 696-6410