Cost Assessment & Benchmarking

As digital and business leaders in a rapidly-changing technology and skills landscape, we are all too familiar with the challenge of balancing cost and budget constraints with pressures to further transformation efforts and improve service delivery, speed, and user experience. A key aspect of managing this challenge lies in identifying the opportunities to reduce run costs and fund growth and transformation efforts. 

Wavestone’s cost assessment and benchmarking advisory capability houses deep financial modeling and analysis expertise to help clients get and understand their true cost of service delivery—whether retained or outsourced—and how this cost compares to the current market.

We benchmark costs across internal service delivery and vendor contract pricing based on a proprietary database of retained cost assessments and sourcing advisory engagements. We have the distinction of being the only benchmarker to staff highly-tenured industry advisors on every engagement, as opposed to inexperienced spreadsheet analysts housed in research back offices.

Cost Benefit Assessment

Metric Database

Contract Database

Optimization Strategies

External Research

Client Data

Wavestone’s Expanded Cost Benchmarking Methodology

Our benchmarking models are flexible to account for the uniqueness and practicalities inherent in every business. Each one is crafted from the ground up to give you a full cost assessment of services, not just a budget fly-over, and address “what if” scenarios around changes in service profiles and the corresponding impact on cost structures.

Our cost benchmarking methodology is rooted in six key considerations:

1. 1. Volume and quality adjustments: We provide normalized comparisons that factor in differences in service quality, responsiveness, and consumption levels.
   2. Service inclusions and exclusions: We provide normalized comparisons that take the exact work elements that are in scope into account. 
   3. Financial and technology parameters: We provide an evaluation of the cost of capital, depreciation, lease vs. buy, volume purchase agreements, the timing of the acquisition, the lifecycle of equipment, and the currency of technology.
   4. Total service costs with management: We provide a total cost-for-service analysis that includes management, governance, and uniqueness in individuals and teams.
   5. Data validated by experience: We provide data validation supplemented with interviews, unlike other firms, which delegate benchmarking to the least experienced consultants who may not have the background to challenge the validity or completeness of data received by a client.
   6. Action-oriented findings: We provide actionable results with each assessment—not just a high/low cost assessment.