Market Price Benchmarking
Contractual relationships between customers and IT service providers require regular checking, control and optimisation in order to manage the cost and resource effort expended along with the performance of externally provided services. A market price benchmark, using the current market level as a yardstick, makes this possible. It can be used to analyse the structure and risk of contracts, to develop changing models and service descriptions and to identify current market prices, price trends and best practices. As a central component of ongoing contract management, a market price benchmark is used not only in the preparation of outsourcing agreements, but also on defined dates during the term of an agreement.
The experience of the benchmarking consultant helps the client to evaluate offers, review service levels, analyse the service provider landscape and audit the responsibility matrix. In particular, a market price benchmark can have a major impact on the pricing structure of outsourcing agreements; by establishing transparency at an early stage, a benchmark can ensure that clients need not fear unpleasant surprises.
As early as 2006, Maturity consultant Karsten Tampier wrote a piece entitled "Benchmark als Bestandteil des Vertragsmanagements" (Benchmark as part of contract management) for the reference book "Praktisches IT-Management" (Practical IT Management), published by Symposion-Verlag. A revised version of the article, "Benchmarking zur Kontrolle von Outsourcing-Abkommen" (Benchmarking to check outsourcing agreements) has just appeared in Bernhard, M.G.; Blomer, R.J.; Mann, H. (editors): Management von IT-Services. Digitale Fachbibliothek auf USB-Stick (Management of IT services. Digital reference library on USB stick). Dusseldorf: Symposion Publishing 2010.
To read an extract of the article online (in German): Benchmarking zur Kontrolle von Outsourcing-Abkommen
More on market price benchmarking: How Helaba Landesbank Hessen-Thüringen optimised an outsourcing deal (in English)
You can obtain further information on benchmarking directly from Maturity consultant Karsten.Tampier@maturity.com.