In response to the ever-changing outsourcing market prospective and current buyers of outsourcing services are finding benchmarking vital not only to managing pricing, but also to improving their relationships with their providers, identifying best practices, engaging in continuous improvement, and driving innovation.
Alsbridge released a new report- Benchmarking in Outsourcing: Keys to Driving Long-Term Value, which describes how benchmarks go beyond simply uncovering misaligned pricing and services. Benchmarking in outsourcing has evolved from a single-focused pricing comparison into a richer, broader array of tools that is being increasingly used by both buyers and providers to improve the process, the relationship, and ultimately the outcomes.
Although benchmarking is becoming more common and accepted, it’s still far from ubiquitous. In a recent poll, Alsbridge found that nearly a quarter of respondents were not making use of benchmarks at all, and another third were taking advantage of them at comparatively infrequent intervals – every three-plus years. It was also found that more than half of buyers of outsourcing services (and perhaps even providers) are missing out on significant opportunities to gain insight into the key points of contract value.
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. The report discusses in detail the following benchmarking best practices:
- Context is required
- Be prepared for the unexpected
- Carefully consider all inputs
- Use the right benchmark
- At the right time
- Use the benchmark as a relationship builder
Employed carefully and properly, the value generated by actionable benchmarks can drive significant return in performance, cost reduction, innovation, injection of industry best practices and continuous process improvement.
For further details the complete report can be downloaded here.