Case Study I: A Europe-headquartered Financial services company with Global operations engaged Everest Group to benchmark their current Global ITO/BPO service provider rate cards
Client overview and background: The client manages a sourcing portfolio involving multiple IT-BPO contractual relationships with a global footprint. The benchmarking scope included functions like Software Engineering, Testing, Project Office, Business Analysis, Program Management within IT. Procurement, Finance and Accounting and Client Service within BPO. The scope also included providing guidance on factors impacting rates such as Best-in-class staffing pyramids, Best-in-class offshore ratios, volume based price discounting, PMO/Governance fees overheads, Continuous improvement charters and Language based price premiums.
Our approach: Everest Group undertook the following activities to perform a thorough benchmarking assessment:
- Map client role nomenclatures to industry standard roles with years of experience and job descriptions
- Identify market proxies and perform normalization removing outliers
- Provide detailed role level benchmarks by geography and identify role-wise savings potential
Everest Group also provided comprehensive guidance on additional solution parameters based on best-in-class contracts.
Client benefits: The benchmarking study highlighted a set of roles and associated delivery locations where the current pricing was much higher than the market benchmarks. This enabled them to prioritize meaningful and effective negotiations with the respective vendors to align their contracted rates with market norms.
Case Study II: Everest Group provided market price benchmarks for Digital Services, for a US based service provider as part of their overall Go-to-Market strategy for Digital Services
Client overview and background: The client, a global information technology services company headquartered in the US sought to assess its price competitiveness across Digital services to support its ‘Price-to-Win” mandate along the following components:
- Rate Card benchmarking: FTE-based price benchmarking for Mobility, Cloud, Analytics, Big Data, RPA, AI, Machine Learning, Digital Program Management, Customer Experience, eCommerce, Content Management Systems, IOT and User Design
- Additional Pursuit Metrics: IP Commercialization trends, Offshore leverage, Team composition, Service Level metrics, Price premium for Digital Skills, etc.
Our approach: Everest Group leveraged its direct benchmarking approach to develop benchmarks for various FTE roles for key geographies like US, UK, India, China, Germany, etc. The benchmarks were based on Everest Group led live deal rate card data in the last 12 months. To provide comprehensive and market competitive benchmarks, we considered a large set of service providers across four categories: Indian, Global, Boutique and Digital Agency firms and provided comprehensive benchmarks across each of the categories. Similarly, we provided targeted guidance on the additional pursuit metrics mentioned above.
Client benefits: Price benchmarks enabled the service provider to assess its price competitiveness across multiple role types and geographies. Additional analysis further enabled the service provider to gain deeper understanding of nomenclatures and solution-related parameters, to eventually align their commercial proposition with industry standards.