In “Keeping Score,” author Sara Cullen (writing originally for ABIE Source, then reprinted in the Outsourcing Institute’s Outsourcing Essentials) shares advice about how to measure your progress in an outsourcing engagement. As she writes, “Organizations that are veterans at the outsourcing game know that…it is unwise to assume that goals are achieved inherently upon signing an agreement; progress needs to be measured and tracked. Since outsourcing is rarely a reversible option and can consume a large part of the budget, management’s ability to drive and demonstrate success has become a basic expectation.”
She shares four general areas worth monitoring to gauge your progress. These include service quality, financial metrics, relationship indictors and strategic goals. For reach, she provides several key performance indicators. Let’s look at one as a taste of the full article.
The Partner Relationship (which she calls “soft” metrics, since they rely on opinion more than fact):
- Communication – Frequent and honest.
- Meeting Needs – Proactive and reactive.
- Creative Solutions – Better ways of doing things.
- Conflict Resolution – Focus on solving problems.
- Management Time – Provide time and focus.
- External Relations Cohesion – Project a united front and don’t discuss issues outside.
- Industry Model – How others see the relationship.
- Positive Interaction – Enjoy working together.
- Integration – The supply chain appears seamless.
I don’t believe Ms. Cullen expects you to track all of these, but to choose the ones that seem most apt to your situation. The idea is to develop a dashboard measuring the progress of the relationship that could be updated, perhaps, monthly and distributed to executives, managers and other selected participants. Then that forms the basis for further action, such as management intervention by either client or service provider.