Understanding how your IT is performing today, and being able to compare your performance against others, is a fundamental piece of knowledge required if you want to run your IT effectively. McManus Consulting has partnered with ImprovIT, an independent specialist consulting firm, to provide IT benchmarking services in Southern Africa. With this partnership we are able to offer clients a boutique benchmarking solution, providing independent and impartial comparative analysis and actionable recommendations. Our detailed benchmarking databases and knowledge repositories allow us to provide fact-based guidance to our clients across a range of industries, enabling them to improve their competitiveness and increase the value they deliver.
ImprovIT was founded in the UK in 2005 by former Gartner, HP & IBM executives, and has resources available internationally to support multi-national engagements. A combination of deep market knowledge, rich data and extensive industry experience gives us a unique value proposition. ImprovIT operates in a number of industry sectors including Finance, Transport, Utilities, Healthcare, Public Sector, Manufacturing, Retail and also perform work for a number of major service providers. ImprovIT has delivered over 1,300 benchmark assessments to clients across the globe and our benchmark databases hold technology costs, outsourced prices, service level information and process maturity data.
In our experience, businesses demand continuous improvement to gain a competitive edge. This is increasingly achieved through best-in-class technology strategy, alignment and delivery. It is no surprise that more business and technology leaders today seek to dispassionately baseline the present state of their technology investments and contrast that baseline to comparative peers, with a view to identifying the best approaches to optimisation and transformation.
We have a range of benchmarking services designed to meet this specific need, and we continue to evolve our models and services to ensure we remain thought leaders in our field.
A key component of benchmarking is to understand how efficiently IT uses its technology budget. IT costs are closely linked to the level of complexity within an IT organisation. The more complex the IT environment, the costlier it is to run. We have a detailed methodology that allows us to calibrate an organisation’s level of complexity and conduct a benchmark comparison against other organisations with similar levels of complexity.
Then, through a sophisticated process of gap analysis and causal assessment, we can determine how you compare, where you are strong, and what your options are for improving your performance and increasing the value you deliver.
Our benchmark data resources, comparative analytics tools and methodologies provide both a baseline and a vantage point to define improvement. We offer cost/price analysis, performance optimisation, rate card reviews, sourcing advice, programme assurance and IT strategy services across all technology areas. Our boutique suite of benchmarking services suite is designed to help you develop a detailed understanding of both your current performance and future potential. If your IT is in-house delivered, are your spend and staffing levels in-line with the services that you deliver? If your IT is outsourced, are you paying a fair market price for the services you receive? If your IT is a mix of in-house and outsourced, is the mix correct? We can help you calibrate precisely your current IT environment and identify latent potential.
In-house delivered IT
If your IT services are delivered by your own teams using in-house skills and technology assets, then one of the things you will be focused on is cost. Are you spending enough to get the results your business needs? Or are you spending too much? Maybe — like many — you overspend in some areas but underspend in others? In the 1880’s, Philadelphia department store giant John Wanamaker famously said that he knew half his marketing budget was wasted, but he didn’t know which half.
Your IT budget will have more transparency than Mr Wanamaker’s marketing budget, but it’s still highly likely that you find it difficult to link IT investments with business outcomes, to know which areas are performing well and which need some additional focus. While cost can be assessed in isolation (there are plenty of information sources around that will tell you the average spend on IT in your industry is x% of revenue) this invariably leads to confusion and can result in poor decision-making if the risks are not understood by the consumer of these “factoids”. Your IT cost is not necessarily closely linked to your industry, but it is closely linked to something…complexity. The more complex your IT environment, the costlier it is to run. We have a detailed methodology that allows us to calibrate your level of complexity and compare you to other organisations with a similar level of complexity.
Don’t confuse cost with price. If you are outsourced, your service provider is charging you a price for the delivery of your IT services. That price is not necessarily closely linked to the cost your service provider incurs to deliver those services to you. The price you pay is influenced by, for example, the type of outsourcing deal you have struck, its duration, the service levels you request and the penalties in place for any failure to reach agreed targets.
Benchmarking your outsourced deal is useful at various points throughout your contract. What was a good deal on day one is not necessarily a good deal in year two or three. But benchmarking is not just about checking the price you are paying, we can also help you assess the prices you are being offered as part of the proposal assessment phase of outsourcing.
Still today, at the heart of most outsourcing contracts is a commodity that is associated to a price e.g. number of desktops or server capacity. The old adage that IT gets cheaper every year remains true at the commodity level; hardware and software consistently fall in price on a like-for-like basis. The only thing that gets more expensive every year is people, but taken as a whole, the total price of a commodity service (the hardware, software and people to support it) continues, on a unit cost basis, to decline each year.
The reality for many is that over the life of an outsourcing deal they will save money in the early years and pay a higher price than average in the later years. It is therefore critical to check that you have a continued good price as you progress through the life of the contract, because it will certainly change.