What are the common challenges and risks of contract value and savings benchmarking?
Contract value and savings benchmarking is a process of comparing the performance and outcomes of contracts with similar or best-in-class contracts in the same or different industries. It can help contract managers identify gaps, opportunities, and risks in their contract portfolio and optimize their contract strategy and execution. However, contract value and savings benchmarking also comes with some common challenges and risks that need to be addressed and mitigated. In this article, we will discuss what these are and how to overcome them.
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Establish clear benchmarking goals:Start by defining what you aim to achieve with your benchmarking efforts. This clarity will guide your data collection and ensure relevant comparisons, avoiding misleading results.### *Ensure data accuracy and consistency:Gather data from reliable sources and verify its accuracy before analysis. Use normalization techniques to account for variables like contract size, ensuring meaningful comparisons and actionable insights.