Track Progress to Ensure Outsourcing Success

Business process outsourcing is no doubt a proven technique for achieving desired goals and objectives such as cost reduction and efficiency improvement. However, since there are quite a few variables that impact the overall success achieved, it would be better if these are accounted for during the term of the outsourcing contract. If would help even more if time and effort is spent on understanding the potential impact of key variables and tracking them on a regular basis. This will ensure timely detection and resolution of inherent flaws and discrepancies, thereby paving the way for the project's success. Here are some key variables that businesses need to track on a regular basis:

Cost Savings –

This is often ranked high on the wish-list of most businesses that have hired outsourcing services and although it is relatively easy to track, it would be worth remembering that savings as achieved by the outsourcing firm does not provide the real picture. To track the actual amount of savings, businesses would be required to include outsourcing costs in their calculations. For example, if the savings achieved is $3 million and the overall costs of outsourcing (during the relevant period) is $1 million, the actual savings would be $2 million. If outsourcing costs are not included in the calculations, it will become quite difficult for businesses to understand how profitable their outsourcing initiatives really are.

Efficiency –

Efficiency, especially in the services outsourcing domain, might be a bit difficult to determine. However, if the right tools and concepts are used, it is always possible to track actual efficiency levels as achieved by the outsourcing service provider. For tracking achieved efficiency levels, it would be better if it is linked to existing performance levels. For example, if an outsourcing firm generates 500 telemarketing leads every week and if the weekly target is 600, it would mean an efficiency of 83.33%. For getting even more realistic results, businesses can calculate efficiency in terms of value. In the above example, if only 200 of the leads get converted into sales, the actual efficiency will turn out to be a meager 33.33% percent. Businesses need to understand these finer details, if they want to get the most from their outsourcing initiatives.

Customer Satisfaction –

Tracking customer satisfaction is often the most difficult part, but since it is vitally necessary, businesses need to give preference to this key variable. Tracking customer satisfaction requires special expertise, tools and techniques and in case these are not available in-house, it would be better to hire professional services such as a market research firm. An increase in sales may appear to indicate increased customer satisfaction, but since this is not always true, it will be better if tracking is done in the prescribed manner. For example, it is quite possible that an increase in sales may be only because of the initial euphoria without any correlation to how satisfied customers really are with the offered product or service.

Tracking these key variables requires some additional time and effort and it's the responsibility of the concerned business to make these available, as and when needed. Without regular tracking, it would be like sailing in a rudderless boat, which needs to be avoided. Only those businesses that implement the right tracking measures will be able to derive the maximum benefit from their outsourcing initiatives.