Benchmarking Services

Benchmarking measures your price, cost, and performance against the market and your peers. It shows where you overpay, where service lags, and where spend can be redeployed. ISG benchmarks across IT infrastructure, applications, cloud, telecom, finance and accounting, procurement, and HR, using live market data rather than dated survey averages.

The sourcing lifecycle includes defining the sourcing scope, identifying and evaluating the right providers, contract negotiation, securing a successful transition without business disruption, and ensuring that expected transformative benefits will be achieved in the Future Mode of Operation (FMO). Consequently, sourcing is a critical strategic activity for any organization, requiring careful planning, strategic decision-making, solid execution, and continuous evaluation.

Are you considering embarking on a sourcing journey? ISG is the world-leading advisor in sourcing, contracting, and navigating the technology provider ecosystem. We influence over $200 Billion of technology spend annually. Find out how we can help you get started.

You can't manage what you don't measure. Benchmarks ground strategy in fact, showing exactly how your rates, costs, and service levels compare to the market. That evidence turns budget reviews and provider negotiations into decisions backed by data instead of assumption, and it exposes savings that internal reporting alone will miss.

Price benchmarking compares unit rates, such as labor and service pricing, against the market. Total cost of ownership (TCO) benchmarking examines the whole solution: volumes, service levels, operating model, and delivery mix. Price benchmarks surface quick rate corrections. TCO benchmarks find the larger structural savings that hold across the life of a contract.

As the world’s leading sourcing advisor at ISG we know what it takes to thrive in the face of change. Thanks to our deep expertise, unparalleled data, and proven methodology we guide our clients to achieve maximum value from sourcing while safely mitigating the associated risks. Contact us to learn more.

No. Benchmarks are most effective for fungible services with multiple competing suppliers, where a real market price exists. Proprietary products with a single source need a different method, built on bill-of-materials analysis and cost modeling rather than market comparison. ISG applies the approach that fits the category.

Rate card benchmarking compares your time-and-materials labor rates, by role and location, against current market rates for the same skills. It pinpoints where you pay above market on specific roles and gives you the granular evidence to correct rates line by line, often the fastest route to in-year savings.

Another key challenge to overcome when conducting a major transaction is managing organizational change. A programmatic organizational change management approach that focuses on preparing affected employees for the Future Mode of Operations and road maps is necessary to successfully transition to a new provider. As outsourcing impacts the retained (IT) organization, adaptations need to be made to the organization and affected processes. Neglecting the human elements of change and training are often the biggest source of failure post-sourcing engagement.

In addition, a powerful provider governance function should be established to manage the contract with the provider(s). This is to ensure that service levels and Key Performance Indicators (KPIs) are met, and the organization receives the benefits as outlined in the contract.

It's also critical during the sourcing process that due diligence is addressed, and a plan is created for managing provider risk, which includes the reliability, financial stability, cybersecurity and ethical practices of providers. Global sourcing in particular introduces complexities such as time zone issues, language barriers, cultural differences and logistical issues (e.g. customs) that can impact delivery times and cost efficiency. The increasing reliance on technology requires continuous investment in digital tools and cybersecurity measures to safeguard sensitive business information and maintain seamless operations.

Contact us to learn more about our ISG FutureSource™ methodology, which addresses all aspects of the sourcing process.

Benchmark major contracts every 18 to 24 months, and sooner when a renewal approaches, market prices move quickly, or service performance slips. Technology and labor rates shift continuously, so a benchmark set at signing dates fast. Regular benchmarking, supported by real-time monitoring, keeps pricing aligned across the full contract term.

AI is shifting pricing away from headcount toward outcomes and consumption, with Autonomy-Level Pricing and usage-based models replacing straight FTE rates in more deals. Benchmarks now have to account for automation and delivery mix, not labor alone. Only one in four AI initiatives currently meets its revenue-impact expectations, at an average $1.3M per use case, which makes independent benchmarks essential before committing spend.