Benchmarking and contract assessment

Benchmarking includes a systematic comparison between the services being benchmarked and what is considered standard or average in the current and relevant market. When talking about benchmarking of IT contracts, most people automatically think of price benchmarking. However, benchmarking does not have to be limited to this, but can also include benchmarking of commercial and technical contract terms, unit sizes, service quality and scope of services, as well as financial costs and size associated with your IT organisation.

Benchmark clauses are often included in most contracts but are rarely used, for various reasons. Suppliers regard benchmark clauses as significant cost drivers and an unused benchmark clause will therefore entail a significant expense for the client, which, if not used, will not provide any real value but has merely been a cost driver for the client.

Benchmarking and contract assessment is just one of several important phases in the contract lifecycle. We can advise you through all of them, from strategy and design to IT contact and supplier management strategy and design to IT contact and supplier management.

It is often healthy to get a fresh look on and an impartial assessment of your contract material to assess whether the material is market compliant and falls within the scope of what your organisation wants delivered by the supplier. Contract assessments can take place during the preparation of the contract material or during the operational phase itself.

We offer an objective and honest contract assessment compared to best practice within the relevant market. The contract assessment is an in-depth analysis of all your available contractual material with the aim of informing and providing insights based upon the facts. When the facts are in place, we will produce tangible recommendations and amendments to your contractual material that will ensure you a more market-compliant contract and thus also more market-compliant prices, services and quality of the service delivery.

We collaborate globally across the KPMG network and have access to a combined portfolio of hundreds of IT contracts. Our benchmark database is extremely comprehensive and able to correct and normalise various IT contracts based on information related to contractual terms and prices. We often collaborate with the leading IT suppliers and therefore also have insights into the many underlying motivations for the suppliers' pricing and the typical cost drivers that the suppliers relate to.

We offer unbiased, impartial and objective benchmarking of your IT contracts regardless of size and complexity. We also offer a specification of the cost-driving contract terms as well as advisory services on how to achieve more cost-effective prices, higher quality and more market-compliant IT contracts.

Contact Christian Larsen or Daniel Bressel Jensen to learn more about how we can help you with IT sourcing transition management.