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« Most People are Editors, Not Authors: New Pre-packaged Service Catalog Content for the Editor in Us | Main | No Comparisons: The Outsourcers' War on Benchmarking »

Comments

Neil Barton

The CIO mag article views benchmarking very much from a customer perspective. The attitude is that "the big bad vendors can look after themselves".

There are some much more balanced views to be read in the commentaries published by some of the big law firms. You can find links to them on my blog at www.neilbarton.com. I would also recommend Jedd Fower's article at http://www.globalservicesmedia.com/Content/general200806274540.asp

A more complete review would also have pointed out:
- that benchmark clauses are written by people with no experience of benchmarking, and often horrify the benchmarkers when they see them
- that there are no industry standards for good practice in benchmarking
- if the benchmark clause prescribes that prices can only go down, never up, then the process is rigged so that benchmarker errors in favour of the customer are retained, while benchmarker errors in favour of the supplier are discard.

Fair Disclosure - I work for an outsourcer. But I've also been a benchmarker, and personally I find the CIO article an incomplete review of the benchmarking world.

Rodrigo Flores

Neil,
Thanks for the perspective. Very useful.

I see the service portfolio issue very related. In both cases, the customer is trying to get to a service definition that is market comparable.

What do you think would enable more widespread benchmarking?

Neil Barton

Rodrigo,

That's a short question with a long answer, and something I've spent a lot of time thinking about.

In my opinion, the use of external benchmarking companies is not growing greatly, and has been flat for most of the last five years. Customers are put off by the price, the length of time it takes, the amount of work it takes, which can sometimes be excessive for the amount of insight they get.

Initiatives like the open source service catalogue will in principle be very helpful if more and more customers use the same service catalogue. But it will take a very long time - like five to ten years. Service catalogues don't get changed that often, and there is a very large installed base of proprietary catalogues out there.

In theory, if one believes that IT services are becoming a commodity, then the market should be shaping towards a concensus service catalogue anyway. I think you can see this in some services, such as managed mail. But for large outsourcing mega-deals, customers hire consultants to write them a unique service catalogue against which all bidders must price. This enables the customer to compare all the bids and make a choice of supplier. But long term it makes it harder for the same customers to compare their services with others.

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Rodrigo Flores

I agree that it will take a decade to fully transition, but I also believe the biggest competitive advantage will be obtained by those who do it in the next 2-3 years.

We are seeing a lot of MSP's and customers adopting a service catalog approach to manage the relationship. One difficult thing has been translating the "services" "defined" in the contract into real, actionable, market-based services.

By the way, I agree that customers are frustrated by the expense of benchmarking and the lack of data. But the service catalog can help a lot with this.

In our case, we have 100+ customers using similar structures to define services. There are variations but there are core similarities. Some of the users are beginning to exchange data about how they define services.

If you'd like to reach me directly, I'm at my first name at my company name followed by a "." and c o m

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