Why Benchmarking Isn’t a Software Procurement Strategy.
- Ibiso David-West
- 14 hours ago
- 2 min read
Benchmarking has become one of the most common reference points in software procurement, frequently used to validate pricing, reassure stakeholders, and provide a sense of market alignment. For CFOs, CIOs, and CPOs under increasing budget pressure, benchmarking can appear to offer an objective measure of whether an organisation is securing a competitive deal.
However, the reality is more complex.
In many cases, benchmarking does not drive better commercial outcomes. Instead, it becomes a bottleneck, limiting leverage, reinforcing inflated pricing structures, and creating a false sense of confidence in renewal negotiations.
The Benchmarking Problem: “Market Rate” Is Not the Same as Best Value
The fundamental issue is that benchmarking is rarely a measure of optimal pricing.
It is typically a comparison against other customers’ agreements, many of which are also shaped by:
opaque vendor pricing models
bundled product structures
inconsistent discounting
renewal-driven urgency
limited customer leverage
As a result, benchmarking often reflects an average outcome rather than a commercially robust one.For procurement leaders, the real question is whether benchmarking reflects true market value, or simply compares you to other organisations that may also be overpaying.
Vendor Pricing Is Not Transparent, It Is Strategic
Software vendors do not price according to a fixed standard. Pricing is highly contextual, influenced by factors such as:
customer dependency
renewal timing
competitive threat
internal budget cycles
product bundling and packaging decisions
In this environment, benchmarking can unintentionally serve the vendor more than the customer. It anchors expectations to a reference point that vendors themselves have helped shape. Rather than revealing the best available deal, Benchmarking often reinforces existing pricing patterns rather than challenging them.
Increase Savings Beyond Benchmarking in Software Procurement
Organisations looking to avoid overpaying should focus on the fundamentals that drive strong commercial outcomes. This includes clear visibility of what is being purchased and actually used, early engagement well ahead of renewal deadlines, aligned internal ownership, and a credible negotiation strategy that challenges vendor assumptions. The strongest results come from negotiating with preparation, expertise, and leverage.
How Wyn Supports Organisations to Achieve Better Outcomes
At Wyn, we help organisations move beyond the limitations of benchmarking by bringing vendor-specific commercial expertise into the negotiation process. We support teams by mapping software estates and renewal exposure, identifying where spend is misaligned with actual usage, applying deep knowledge of vendor pricing structures and tactics, and executing structured negotiation strategies that escalate appropriately when needed. The result is not simply benchmarking against the market, but achieving measurable discounts and contracts that reflect true value rather than vendor momentum. Because in software procurement, the goal is not to pay what others are paying, it is to pay what is right.
If your renewal approach relies primarily on benchmarking data, book a free contract review with Wyn to assess where you could achieve greater discounts and stronger commercial outcomes.
