CHERUB Sourcing Price Benchmarking Service is built upon well-proven, best-practice methods which we apply and tailor to suit the specific requirements and objectives of our clients.

Benchmarking exercises can range from simple analysis of spending as a percentage of organisational unit and enterprise budgets and the comparison of those measures to broad industry metrics, through to detailed comparative benchmarks of the cost efficiency and service effectiveness of particular business, administration or infrastructure service functions and processes. Comparative benchmarks may be internal to an enterprise, where the spend profile, cost efficiency or service effectiveness is compared between various organisational units or year-on-year; or they may be external where enterprise measures and metrics are compared to those of a chosen peer group of enterprises.

Benchmarking exercises may also be performed to compare the prices paid for services received from external service providers (outsourcers).

For comparative benchmark studies where the comparison is to a peer group of external entities, our preference is to conduct a joint study by engaging with our primary client and the target peer entities. This collaborative approach enables all the participating parties to benefit.

Regardless of the nature of the benchmark, the keys to successful benchmarking studies include:

• Clearly defined and consistently applied scope boundaries;
• Clearly defined and consistently applied definitions for all data categories;
• Standard approaches for the normalisation of data;
• The use of recognised and meaningful measures and metrics; and when conducting comparative benchmark studies; and
• The selection of appropriate peer entities (or peer services, in the case of price benchmarking) according to agreed criteria.

Our benchmarking methodology provides and rigorously applies those success keys.

Typically, when we conduct a detailed benchmark study we are engaged to examine one or more particular business or support functions and determine both the efficiency of those functions, and their effectiveness in terms of service outcomes. Efficiency measures may be limited to just cost efficiency; or extended to include measurement of personnel efficiency.

Measuring the effectiveness of each function or service being studied provides context for understanding the cost efficiency measures and metrics. This enables the benchmark study results to be understood and interpreted on an holistic basis, providing a solid foundation for informed action. For studies of this depth we work with our clients (and any target peer entities) to gather comprehensive data pertaining to:

• All operational and personnel costs, dissected according to our industry-standard chart of accounts;
• Full-Time Equivalent staff numbers by job category or function;
• Workload processed or handled during the period of the study;
• Function or service outcome measures; and
• The complexity of the environment in which the function or service operates (for example, geographic spread, organisation structure, use of technology, agreed service levels, etc.).

We collaborate with our clients and apply our methodology to define the data collection requirements; and then assist them as may be required to collect and refine that data. We then take the collected data, apply any normalisations which may be needed, and produce the benchmark analysis and key metrics. We then work with our clients to interpret the results, draw sensible and balanced conclusions, and identify appropriate actions.

See our capability statement for a more detailed description of our services.

Sourcing and Selection	Vendor and Service Management	Strategic Planning
Using discipline, consistency and integrity to ensure the right outcome in the selection of vendors, technologies or service providers. Read More	Assisting organisations to achieving best value and balance from internal and external service providers by establishing a Vendor and Services Management regime. Read More	Using IT and Sourcing Strategies to navigate the organisation into its future. Read More