The Importance of Normalization in Contract Benchmarking | Market Insights™
Taken together, various contract-specific adjustments can double the price per unit per month
Taken together, various contract-specific adjustments can double the price per unit per month
Application Support Services: 12 fee drivers you must normalize to ensure a like-to-like comparison in benchmarking application support pricing
Outsourcing contract third-party benchmark clauses: typically observed auto-adjustment scenarios
Automation driving 30%+ productivity improvements across the IT stack
Sample indexed productivity improvements, 2016-18YTD
Is there a right time to benchmark? While benchmarking clauses can be built into a contract, it is best to align benchmarking with concrete objectives throughout the sourcing journey
Is there a right time to benchmark? While benchmarking clauses may be built into a contract, it is best to align benchmarking with concrete objectives throughout the sourcing journey.
During a recent next-generation packaged application benchmarking project for one of our Tier 1 clients, one point jumped out at us: service providers and product vendors have started moving away from the traditional waterfall approach to an adaptive hybrid agile-waterfall approach while solutioning for packaged application deployments.
You’re probably wondering if an agile-led methodology is necessary, since packaged applications have inbuilt configurations that are aligned to industry best practices. The resounding answer is yes, as packaged apps projects have been victims of scope creep, cost overruns, missed deadlines, objective mismatches, and a host of other issues. A good share of these failures can be attributed to the customization requirements that were built using a traditional implementation approach, which encouraged a siloed and non-continuous way of working.
The effectiveness of the hybrid approach can be easily gauged through a mix of waterfall and agile-based SLAs and KPIs. We are seeing that using the hybrid waterfall-agile methodology significantly improves traditional packaged apps implementation project SLAs such as defect leakage, defect density, and schedule and cost adherence. And agile KPIs such as velocity rate, work-focus factor, and percent of story-point accuracy help keep track of team productivity, and enable the team to track deviations from standard configurations.
One major adopter of the hybrid approach is SAP, which has refurbished its implementation framework with the introduction of its agile-based Activate methodology for the SAP S/4 HANA suite. While SAP has retained the strong elements of the traditional Accelerated SAP (ASAP) waterfall methodology, it has changed its approach from a template-led long duration blueprinting exercise to a fit-gap analysis for processes configured on a cloud-based solution. Additionally, it no longer runs the realization phase in a linear fashion, wherein testing is performed only after complete configuration or customization is done. Instead, testing resources are onboarded as soon as the sprint starts, and implementation effectiveness is gauged right from the word “go.”
Many service providers and product vendors are also following this same approach in some form and fashion, particularly in the realization phase.
It helps enterprises streamline their journey to becoming a truly agile organization, and enables a better end-user experience, as improved SLAs underscore better service delivery. And it helps service providers enhance their brand reputation, capture more business, and shed the tag of being old school and monolithic in their implementation approach.
If you are interested in learning more about the impact of the hybrid waterfall methodology on project timelines, average daily rate, overall TCV, contractual SLAs, and risk alleviation mechanisms, please feel free to reach out to me at [email protected]. You can also visit our Benchmarking page.
Australia and the UK consulting services rates: similar but different
Chief Research Guru Michel Janssen will be a featured speaker at the NASSCOM 2017 BPM Summit event held on September 12-13 in Bangalore, India.
Michel’s will deliver a presentation titled, Benchmarking’s Role in Creating Best-in-Class Digital Enterprises.
In this session, attendees will learn the results from Everest Group’s soon-to-be-release Best-in-Class Enterprise Digital Analysis, which quantifies with real data what it takes to achieve best-in-class – in terms of outcomes, as well as the corresponding capabilities needed to deploy digital strategies and initiatives. The session will include specific metrics on how much best-in-class enterprises invest in digital initiatives; how much the spend is growing; and how best to measure success.
In addition to sharing the Top 10 capabilities that the Best-in-Class have that their peers do not, we’ll bring the data to life with case studies of enterprises that have achieved the Best-in-Class ranking. Finally, we’ll share insights on the opportunities these digital journeys are creating for the BPS industry and how the industry needs to evolve to capitalize on the need of enterprises to meet today’s digital benchmark.
When
October 12-13, 2017
Where
Hotel Leela Palace
Bangalore, India
Speaker
Michel Janssen, Chief Research Guru, Everest Group
Vice President of Research Julian Herbert will be a key speaker at ProcureCon’s Total Talent Management event held on September 20-21 in Amsterdam.
In Julian’s presentation, How to Ensure Your Talent Acquisition Model is Ready for the Future, he will discuss how this future-readiness can be achieved through benchmarking and how the process involves:
Attendees will learn the importance of looking beyond the cost of services delivered by MSP and RPO providers, if they want to have a talent acquisition model which is in-tune with the latest economic, demographic, and technological changes.
When
September 20-21, 2017
Where
Novotel Amsterdam City
Speaker
Julian Herbert, Research Vice President, Everest Group
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