As IT outsourcing has evolved so have IT outsourcing customers’ benchmarking needs. As a result, a new approach to benchmarking is necessary. Kathy Rudy, partner with outsourcing consultancy ISG, discusses pros and cons of benchmarking for transformation and how to do it right.
Traditionally, IT services customers have approached periodic benchmarking of their outsourcing deals as a hammer to tamp down on vendor pricing. But as outsourcing itself has evolved so, too, have outsourcing customers’ benchmarking needs.
“[Customers] are upping the ante on the providers and pushing the envelope on benchmarking suppliers,” says Kathy Rudy, partner with outsourcing consultancy Information Services Group (ISG). IT leaders don’t just want to know that their costs are in line with the market. Increasingly, they may want to see where they stand in areas of innovation, agility, standardization and quality.
That requires a new approach to benchmarking, says Rudy, one that’s approached not as a way to tighten the screws on the way things have always been done, but as a method for establishing new and better ways of operating.
CIO.com talked to Rudy about the drivers behind benchmarking for transformation, its benefits and drawbacks for customers and providers, and how to do it right.