Benchmarking is a useful way for outsourcing customers to ensure that their service providers are offering competitive prices. But the process can be costly, contentious and time consuming for outsourcers and their customers. One alternative--the proxy bid--has its pros and cons.
"A proxy bid represents what the benchmarker would bid to provide the services if the benchmarker were in the outsourcing business," says Scott Feuless, senior consultant with Compass Consulting Services. "Independent [benchmarking] firms are not in the outsourcing business, but they have access to extensive data on what the services cost and how they are priced."
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