Initiation and Scoping – before beginning

A series of decisive points must be clarified before the benchmark is actually carried out. They include the determination of the scope of the benchmark, the review of the price or allocation model, the review of the contract or service documentation for possible problem areas, and the review of the framework conditions which have been defined for up-to-dateness and completeness.

Care must be taken when selecting the services to make sure that they can be benchmarked at all. A rule of thumb states that the more individual a service is, the more difficult it becomes to benchmark it. This means in turn that the benchmark re­sult is less precise. Network, data center, and desktop services, for example, are typically good choices for benchmarking because these are services which are com­mon on the market and comparatively standardized. But even in these services, there are elements which display a high degree of individuality and are consequently sub­ject to limitations in the benchmarking, if it is at all possible. So benchmark capability should be clarified in a concerted action with the benchmark provider when he is se­lected.

Pricing for individual services should be a matter for a negotiation process between service provider and service recipient and not be straitjacketed into a benchmarking proce­dure. If desired, the benchmark provider can be included in this procedure as an un­biased consultant. If the service contains a high proportion of individuality, the proce­dure described above can be applied to the individual components while the standard­ized features are incorporated into the regular benchmarking process.

Another parameter which influences the benchmarking capability of a service is the price or allocation model which is selected. Typically, the most important cost drivers are selected as reference values for the specific service, e.g., the PC workplace for desktop services. But it is a fact of life that not all comparable companies make use of the same reference values, making a conversion necessary. Yet conversions from one reference value to another typically lead to a lack of precision or, in extreme cases, are not possible at all. So it is important that the price models be agreed with potential benchmark providers in advance at this point as well.

But despite the greatest diligence in preparation, the later determination that a ser­vice or certain service elements are not benchmark-capable cannot be avoided be­cause the benchmark provider does not gain a comprehensive insight into all of the relevant aspects of a service until he begins collecting the data. That is why the framework conditions should also provide regulations for such an occurrence.