Data collection – including services, qualities, quantities, and expense drivers

In terms of the requirements for a price benchmark, a service is adequately described by the scope of its individual performance, the agreed service levels, the volume, and the complexity drivers specific to the service. Taking data center services as an exam­ple, the number of incidents, problems, and changes are typical complexity drivers. The agreed scope of service can be found in the service schedules, while the required qualities have been agreed in the SLA. If up-to-date and complete documentation for the service is available, this information can be captured efficiently. If this is not the case, the current status of service performance can be recorded. The procedure to be followed must be agreed in advance of the benchmarking. Volumes and expense drivers, at least in part, can typically be found in regular reports, but their collection within the scope of the benchmarking is certainly common.

The data is collected by means of structured questionnaires. It is far and away the most time-consuming and expensive phase for everyone involved, but most of the burden is on the service provider because the accurate and complete description of the service is the basis for the correct pricing.

Peer group selection – comparing apples and apples

Keeping in mind the aphorism that “no two eggs are exactly alike,” this phase serves the identification and selection of the peer group. This task is the responsi­bility of the benchmark provider, who relies on the support of his database. The se­lection of the control group is oriented, on the one hand, to the service provider or the customer and, on the other, to the essential parameters of the specific service, taking into account the information gathered during data collection.

So, with respect to the customer respectively service provider, parameters such as the sector in which he is active and contract elements such as the term of the contract are taken into account. Service parameters which are considered include scope of service, agreed service level, volumes, and the complexity drivers specific to the service.

The question of size of the group must also be clarified during peer group selection. On the one hand, a minimum number of peers is required, but it also makes good sense to restrict the size because the validity of comparisons becomes increasingly problematic as the number of peers increases. Leading benchmark providers con­sider a group of five to seven peers to be reasonable.