Optimizing Service Provider Costs

One of the common uses cases for Seerene is provider management. We give you the ability to see where you’re getting the best value, and align teams with service-level agreements based on fact-driven KPIs.

There is a great piece of research by Gartner on the topic by Kris Doering and Stewart Buchanan which is worth a look.

One thing that they point out is that while 30% of contracts are billed on a time and material basis, there is often a misalignment with regards to productivity and risk. If you’re billing based on time and materials, you might not be fully incentivized to deliver projects with low rework and you might take shortcuts which end up costing the client down the road.

One approach is to replace T&M contracts with out-come based models. When those outcomes can be well defined this model can work well.

Another is to use KPIs like those provided by Seerene to improve efficiency. Velocity, productivity, and quality metrics might be written into the SLA, but they could also be set up as incentives where gains are shared by both parties.

Their final recommendation was around Application Portfolio Analysis which is the most effective way to drive long-term value. This exercise presents another opportunity for Seerene to add value via the software maps and clear-cut KPIs.

We highly recommend taking a look at the research and hopefully it sparks ideas as to how you might leverage the power of Seerene to better manage your service providers contracts.