What exactly is the VMS Benchmark ?
Benchmarks are comparisons. Traditionally, so-called “peer groups” were set up to do that.
To analyze the IT costs of a bank, a peer group of other banks would be set up, and the comparison would be against their costs.
The peer group process only makes sense if it is only used on a very general level. For that reason, it is no doubt interesting to see if the company or bank in question spent more or less on IT, in total, than its direct competitors.
But the process fails as soon as you go into detail. If you would like to, for instance, look at the expenses for the IT costs of personnel wage payments, just comparing any banks with each other will not do. A direct bank or online bank has different costs than a branch bank. Peer groups thus become so small so fast, that individual characteristics for the individual members of the peer group can destroy the validity of the peer group. Misinterpretations are then unavoidable.
On the other hand, the notion that one can just use banks as a comparison for personnel costs is very questionable. A comparison with other companies could result in better insights. And the numbers should not be the only thing that plays a role there (key concept: 20 % more expensive than the average of the peer group). VMS’s action-oriented evaluation ensures that possible differences are checked for relevance, and for the ability to be put into action: Learn from the best !
The degree of dependence vis-a-vis the industry is very different for various parameters of a benchmark. The prices for hardware are industry-independent, but dependent on the volume of the order; the outsourcer also presents itself as industry-oriented, but calculates the price based on the internal expenses for people and materials.
User use is, on the other hand, process-specific, and thus, very much oriented around the given conditions of the industry.
Numerous other parameters play a role: geography and business location, pay scales, and naturally, also, to a very large degree, the size of the SAP landscape. With respect to purchasing, mid-sized companies have to deal with a different price structure than large corporations - but large corporations often have, on the other hand, higher organizational expenses and pre-agreed (union) wage costs.
The VMS Benchmark is the answer to all that. Instead of a comparison with more or less comparable individual other companies, the VMS Benchmark presents the question, very simply:
“What would other companies spend, if they had to have the same IT performance as my company ?”
The VMS Benchmark provides the answer to that. In the form of the VMS Report, VMS provides with the answers on which measures a company can use to move toward best practices:
Action-oriented !