Pre-benchmarking is a very discrete service that helps to identify the 'size of the prize' of invoking the benchmarking clause in your IT contract

1. Pre-benchmark before you sign your
contract or invoke your outsourcing
contract benchmarking clause
Diane White
IT Perceptions
dwhite@it-per.com
1

2. Current Situation
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 2

3. Complication
• 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
3

4. Pre-benchmarking
• 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 4

5. KPIs – Attention to the workload
denominator in KPI equations
is key to success
For example, the number of: • Locations
• Email accounts • Network ports
• Service Desk incidents • Databases
• Service requests • Servers
• IMACs • Data storage
(Installs, moves, adds, chan • Computer rooms
ges) • Service hours
• Desktop / laptops
• MIPS
a subset of 45 workload types / KPI denominators 5

6. Benchmarking vendor
selection
• 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 6

7. Death by normalisation
• 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 7

8. Check the contract wording
• 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 8

9. Benchmarking firms
• 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 9

10. Review the benchmarking
clause
• 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 10

11. Pre-benchmarking in
practice
• 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 11

13. The Take Away
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
13

14. I hope that this has been helpful ..
Please contact me or my team for a contract pre-
Benchmark or other benchmarking matters
Diane White
IT Perceptions
dwhite@it-per.com
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