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Outsourcing Program Metrics

Maintaining a corporate outsourcing initiative not only requires a comprehensive program management model, it also requires performance measurements. Establishing key metrics for program performance can help companies determine if the initiative is meeting the original goals set when it was started. Programs that do not have a metric component tend to drift and become inefficient.

Key Metrics Trace Back to Outsourcing Goals

Specific performance metrics can be created for an outsourcing program. By establishing these metrics, creating acceptance thresholds, and tracking them over time, an outsourcing program can be managed and continuously improved.

  • Financial
  • Productivity
  • Quality
  • Coverage

Understanding if an outsourcing program is meeting expected financial goals is critical for ongoing success. Even if the program was not initiated as an expense reduction effort, understanding what the real costs are for the program (including infrastructure and management) can determine if the program is viable. Remember, cost of outsourced labor is only a single component of the total cost of outsourcing.

Understanding the productivity impacts of an outsourcing program can be complex. However, determining how outsourcing impacts an organization's productivity not only helps measure the program but also provides significant insight into the productivity of internal teams. Productivity benchmarks and goals should be created and monitored especially during program start-up. Some component of milestones should also be included.

Quality metrics is key in terms of understanding how the deliverables compare to either internal or industry standards. Lower quality at lower cost is not a desirable outcome. Too often, quality expectations are lowered when cost of labor is reduced. If your company does not currently have ways to measure quality of deliverables, this is a prime opportunity to establish common quality criteria.

Measuring the number of organizations that are using outsourcing can help in determining how quickly targeted organizations are utilizing outsourcing services. Slow adoption of outsourcing service can indicate issues with the complexity of the work or technical/infrastructure issues with being able to transition work.