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Ramp Rate Methodology Overview Sn
- 1. RampRate Methodology Review
Presented by:
Steve Nguyen
Sourcing Advisor
714-889-9382
sn@ramprate.com
Confidential ©RampRate™ Slide 1
- 2. Who Is RampRate?
RampRate advises on sourcing or sale of IT
services: colocation, managed hosting,
cloud, content delivery, network and telco
• Reduces decision timeframe
• Adds market based data driven analysis
• Improve pricing, contract terms, service levels
RampRate uses data-centric tools to remove
IT market inefficiency
• SPY Index market database
• In vs outsource analysis
• Mid-contract renegotiation
• Multi vendor normalized bidding
Confidential ©RampRate™ Slide 2
- 3. Sourcing Advisors for IT Infrastructure
RampRate Services
Baselining Benchmarking
Enables For
Sourcing Research
Confidential ©RampRate™ Slide 3
- 4. RampRate Clients
Media/Broadcast Finance
High-Tech Gaming Publishing
Internet/E-Commerce Web 2.0 Telecommunications
Confidential ©RampRate™ Slide 4
- 5. Data-Driven Decisions with the SPY Index™
Service Provider Intelligence Index (SPY Index)
Drives speed & quality decisions
1. RampRate’s Historical Data
• Over 400 multi-quote transactions in 4 years
• 1000s of RFQ responses distilled
2. RampRate Research
• Primary research on client satisfaction
• Ongoing end-user interview program
3. Analyst Research
• Inputs from IDC, Telegeography,
Aberdeen, Renesys, Alinean, and others
4. Vendor Profiles
• Services data, list prices and actual quotes
• Pre-loaded database of 350+ vendors
5. Contract / SLA Templates
• Streamlined for speed
• Embedded best practices and approaches
6. Cultural Compatibility
• Cultural fit matching of clients and vendors
Confidential ©RampRate™ Slide 5
- 6. Results
Immediate and • Resetting contract to market rates has
Sustainable Cost proven an average of 30% cost reduction
Reductions for RampRate Clients
Reduced Risk & • Decisions driven using “street level” data,
comprehensive industry knowledge and
Improved research
Contract • Better Contract Terms and SLAs
Faster Decision • Average time to contract is 6-8 weeks
Timeframe
Confidential ©RampRate™ Slide 6
- 7. RampRate Services
Baselining / Operations Consulting
• Preparing cost data for benchmarking or sourcing
Benchmarking
• Comparing a baseline to a market
Sourcing Advisory
• Making changes based on baseline via renegotiation or
RFQ/new vendors
Research
• Information about a market
Confidential ©RampRate™ Slide 7
- 8. RampRate Service Verticals
• Rental of space/power/network/remote hands
Colocation • DRT, Equinix
Infrastructure • Local or remote managed hosting
• Cloud Infrastructure As A Service (IaaS)
Management • Wipro, HCL, IPSoft, Peer1
• MPLS, WAN, VOIP, any large IP circuit
Network Services • IP transit (bandwidth to the internet), point-to-point (DS3)
• Level3, XO, Verizon, ATT
& Telco • Land lines, mobile
Content Delivery • Managed services for delivery of video, software, web pages
• Akamai, Limelight
Networking (CDN)
Confidential ©RampRate™ Slide 8
- 9. RampRate DOES NOT source
Hardware/
• Microsoft Enterprise,
Software /
Licenses Oracle, per-seat licenses
• Offshore, customer
BPO
service
Software • Programming, QA,
Development graphic design
Confidential ©RampRate™ Slide 9
- 10. Key Concepts: Buyer Profile / Strategy
Strategic
• Multiple services bought from 1 vendor with little / no tactical competitive bidding
• Dedicated account management, high touch service, and “one throat to choke”
• Signed deals typically fall around 75th percentile of RampRate deals
Technical & Vendor Fit
• Best facility / SLA, but amenable to competitive bidding
• Signed deals typically fall around median of quotes
Balanced
• Optimized mix of price and service level with some concessions on both
• Signed deals typically fall around 25th percentile
Price-Conscious
• Cost is primary / only selection criterion; service / provider may lack track record
• Signed deals typically fall around 10th percentile
Confidential ©RampRate™ Slide 10
- 11. RampRate Sourcing: How It Works
Baseline built from contracts, bills, inventory
Benchmark of Baseline against SPY Index shows gaps in
pricing, contract terms, service levels
Sourcing - Quote form made from baseline, sent to vendors
Quotes analysis
Vendor recommendation
Final Negotiations
Impact Report: Final State vs Baseline
Confidential ©RampRate™ Slide 11
- 12. The Result: SPY Index Analysis = Data Driven Insight
Price evaluated
in context of
market
Price range
determined by
Combined 137,000 real-
market rates world quotes &
for packages deal outcomes
Confidential ©RampRate™ Slide 12
- 13. Top Line Pricing Analysis / Benchmark
Is Vendor Relationship Truly
RampRate Opens Path to Savings
Strategic?
• If so, moderate savings can be • Negotiation with Vendor or
found alternative providers
• If not, choice of major savings or • Right-sizing price for service level
service gains of each infrastructure component
Credit Suisse Preliminary
Client Prelim Benchmark
Benchmark
Dollar
Monthyl Expense
Spend Strategic
Savvis
Vendor
Technical
Option 2: Cut Cost
Balanced
Price-
Conscious
% of Optimal Contract Terms
Items Not Benchmarked Bandwidth
Hourly Labor Managed Hosting / Lease
Data Center
Confidential ©RampRate™ Slide 13
- 14. Top Line Contract Terms Analysis
Few Contract Terms
Contract Documentation
Match Strategic Price Major Gaps
Incomplete
Levels
• SLAs missing for managed • Over-broad Force Majeure
services and network • Slightly flawed: price • Unilateral price increases
• Co-location SLA: model needs adjustments • No environmental
boilerplate guarantee
Credit SuisseBenchmark
Client Prelim Preliminary
Benchmark
Option 1: Improve Contract
Monthyl Expense
Strategic
Savvis
Vendor
Technical
Balanced
Price-
Conscious
% of Optimal Contract Terms
Confidential ©RampRate™ Slide 14
- 15. SPY Index Sourcing – Vendor Quote Analysis
Build Buyer Selection Criteria Offer Performance vs. Criteria
internal SLA / Business Industry Fit, 3%
Term Assent, 5% Vendor 1 65%
consensus Technology Fit,
Price
Competitiveness,
Price Competitiveness
7% 25% Operational Health
on buying Extensibility
Vendor 2 57%
Technology Fit
priorities outside of f ering,
10%
Vendor 3 44%
Financial Health
Vendor 4 31%
SLA / Business Term Assent
Compare Scalability within Operational Vendor 5 62%
of f ering, 15% Health, 20% Scalability within of f ering
fit of Vendor 6 45%
Industry Fit
different Financial Health,
15%
Vendor 7 63% Extensibility outside of fering
vendor 0% 50% 100%
profiles
Score Drill-Down Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor 6 Vendor 7 Vendor 8
Operational Health 87% 33% 81% 59% 32% 36% 72% 86%
Consoli- 10% SLA 95% 95% 75% 95% 95% 70% 90% 95%
dated or 50% Uptime Guarantee (Assume 3 9s)
50% Temperature Guarantee
100%
90%
100%
90%
100%
50%
100%
90%
100%
90%
50%
90%
90%
90%
100%
90%
drill-down 10% Facility Protections 71% 76% 60% 67% 70% 70% 63% 78%
50% Facility Tier 75% 75% 50% 75% 75% 75% 75% 75%
views of 10% Power Redundancy 80% 80% 100% 50% 80% 75% 50% 50%
10% UPS Duration 53% 53% 53% 40% 40% 0% 33% 100%
selection
All scorecard parameters reflect deep technical expertise
and years of building lasting, low-risk services deals
Confidential ©RampRate™ Slide 15
- 16. RampRate Sourcing Project Plan
Finalist MSA,
Requirements RFQ / VQF Vendor Quote Signed Contract
Benchmark SLA, Order
Summary Demand Letters Analysis & Impact Report
Form(s)
Needs SPY Index RFQ /VQF Solicit Select Negotiate
Assessment Benchmark Demand Letter Offers Vendor Contract
Collect Data Assess Re-sourcing Distribute RFQ Address risks RampRate
•Quantities Performance • Create Vendor / VQF •Site visits redline
• Budgets •Compare to Quote Form •Additional
• Unit Costs users of similar (VQF) and Vendor Q&A references Legal review
• SLA Needs service Request for •Detailed
Quote (RFQ) Collect transition plan Signature
Create Base Set Targets •Finalize target responses
Case • Forecast vendor list •Preliminary Finalize Calculate
• Finalize costs improvement due diligence sourcing RampRate
to benchmark potential Renegotiation •Clarify decisions Impact
•Set baseline •Identify •Request •Ensure best •Price
for measuring tradeoffs improvement offer is Finalize targets •SLA
improvement •Set walk-away submitted & receive draft
Select Areas to targets contracts
Re-Source or Create apples- •Price
Negotiate to-apples •SLA
comparison
Confidential ©RampRate™ Slide 16
- 17. Contact
Steve Nguyen
Sourcing Advisor
714-889-9382
sn@ramprate.com
Confidential ©RampRate™ Slide 17