When embarking on a transformational outsourcing programme companies will need to focus very carefully on the use of Metrics and the linkage of these with the appropriate Reward systems to deliver a successful programme. Establishing these metrics is probably the most important workstream of the whole programme as they will underpin a successful transformation to an outsourced and/or offshored process environment both for the home teams and the new partner.
It is critical to get these metrics mutually understood before starting the transformation…otherwise you could get a mismatch between yourselves and your outsourcing partners in the measurement of the process performance. There are some things to watch out for:
- Ensure that when you request process metrics from your partners that they mirror exactly what you yourselves measure today – many companies fall into the trap of punishing outsourcers for poor performance on metrics they never had in their original home environment.
- It is important for companies to understand the impact of an outsourced sub-process on the overall delivery programme – quite often the process outsourced will have multiple hand-offs between the outsourcer and the home teams – often over different time zones and huge geographical distances that did not exist before the transformation. These processes will therefore need crisp and clear metrics to be designed even if there was no need for them in the previously. This process will help to ensure the seamless quality and response times demanded by clients.
- Most companies underestimate the level of understanding that the outsourcer has as to the criticality of the process they will be/are already handling. Having the outsourcer really appreciate how central they are to the delivery process will help in the continuous improvement of day-to-day performance and ultimately result in a better programme outcome.
- Another reason for establishment of an effective set of mutually agreed metrics is that it will help the overall governance of the programme establish clear and concise communication on progress. They help put in the checks and balances needed to ensure that schedules are met, that clients are satisfied and that the finger-pointing and possible legal issues that can arise in delicate situations can be more easily resolved in a non-partisan manner. This will in turn also develop a feeling of partnership between the two sides and will help avoid some of the lack of trust that can be so destructive for ongoing process improvement.
- Finally, these metrics should form the basis of the reward programmes associated with the overall transformation project as they bring a very objective approach to measuring success from both a process and an individual perspective. Companies need to be very clear about what metrics they select to ensure they reflect the original desired outcomes. They also need to think about how to swiftly modify these metrics to reflect the current state of the programme and maybe change course when necessary. These reward programmes will of course go hand in hand with the other HR components of such a transformational programme to drive positive motivations on both the home environment and the outsourcing/offshored environment.
We would love to talk to you about the importance of metrics and the appropriate reward systems as key enablers to a successful outsourcing and/or offshoring programme – why not contact us for an initial chat?
Latest version updated 16th November 2017