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Outsource Effectively
Follow these instructions and you can be assured that you’re making good business decisions.
Measurement is essential to any workforce design. The organization must understand current performance metrics, if any, associated with the work being evaluated. A long performance history is not necessary as most work changes too much to make anything more than a snapshot of current performance worthwhile. At this point, target performance parameters of each potential human resource category must be considered. You should be prepared to calculate any employee performance metrics but consultant and contractor and outsourcing providers should present their own. After the potential external providers have presented their claims ask them to document them.
Human Resource Factors, the first dimension of the performance blueprint, must drive any resource allocation, outsourced or otherwise. And the top two and most important factors are the organization mission and objectives. As simplistic as it sounds every organization decision should be driven by these two. We never tire of extolling; a leader’s most important responsibility is to establish the right objectives. Any human resource allocation decisions must support these objectives. And once the right objectives have been determined, all decisions that follow are invariably easier, and better.
The third step to effective outsourcing is to fairly evaluate all options. A Fortune 100 company recently told us of a major software consultancy that promised a $105 per purchasing transaction savings that could never be substantiated. We have seen hundreds of performance claims from external providers including leading advertising agencies, software companies, and outsourcing providers. While almost all of these claims have been without basis, we have learned not to exclude the providers of false performance. Our culture is measurement adverse and few organizations have demanded anything beyond the hype. But translating and comparing hype is fruitless and unnecessary. Demand the documentation and compare apples to apples. It’ll make your decision-making easier and ultimately drive performance improvement for all providers.
After the outsourcing provider has been selected you should structure and contract for continuous improvement. This cannot be accomplished without ongoing measurement and reporting. And this information will allow you monitor and continually evaluate performance.
For more information on effective outsourcing read Outsourcing by Nicholas Burkholder.