Monitoring progress and measuring success criteria

To enable the success of the outsourcing arrangement, a few core functional areas need constant monitoring by both the client and the service provider. Neglecting or overlooking any one area can often lead to the failure of the outsourcing arrangement.

These critical areas include:

Cost Management

Cost is often one the most important reasons cited for choosing outsourcing, as outsourcing enables both the client and the service provider to earn a considerable profit. It is therefore necessary that both parties analyze the scope and pricing of the outsourced project before they sign a contract.

Communication Management

Establishing the right communication channels is an absolute necessity for any outsourcing venture to succeed. Communication strategy should be given due importance right from the negotiation stage, with importance being placed on a foolproof communications system, consistent contact between client and service provider, regular feedback, clarity in instructions and the development of a reliable system for clarification of any points in question.

Performance Management

Performance management in outsourcing includes both project quality and adherence to the timeframe mentioned in the contract. The client must conduct regular checks to establish whether the quality of work conforms to previously established parameters. The client must also monitor adherence to deadlines and demand accountability reports in case of non-compliance.

Risk Management

As with any other aspect of a business relationship, risk management is an important factor to be considered. It is always better that both sides of the outsourcing process analyze and study the various risks involved and have a suitable back-up plan in place before the contract is signed. Doing this will substantially lower any risks involved.

Crisis Management

A crisis can strike either party of the outsourcing venture, and both sides must be suitably prepared for continuity of business. By choosing a well-established outsourcing provider, however, crisis management can be substantially reduced.

Knowledge Transfer Management

Continuous knowledge transfer, with complete transparency in all areas that concern the project, will facilitate better production, improved timelines and increase the overall quality of the outsourced project. For successful knowledge transfer management, close monitoring is needed on a regular basis.

Relationship Management

A good relationship between the client and the outsourcing provider is essential for the success of the project. Relationships can be effectively managed with regular communication, continual transparency, and by displaying the right amount of flexibility when called for.