Outsourcing Scorecard and Its Key Contents

Outsourcing is not a business fad. It is a necessity for some companies, especially large corporations that need to have several locations around the globe. An option that these corporations have is to have off shore locations. But many prefer to have outsourcing as a solution to business expansion. It is in this light that many managers have adapted the use of an outsourcing scorecard to effectively measure the performance of the Business Process Outsourcing company. On regular intervals, the company that secured the service of another one will conduct meetings to see the general health of the business as handled by the Business Process Outsourcing organization.There are many types of metrics than can be placed in the scorecard for outsourced business opportunities. However, there is a need to understand what outsourcing is to fully identify the things that need to be measured against what is not. As a standard, not all businesses should adapt the same scorecard because each business—or line group—cannot have the same type of performance measurement.Outsourcing is practically entrusting a job to another one. Perhaps the most common example that one can use to illustrate this is the use of bookkeepers. Many small companies—mostly home businesses—hire a bookkeeping service to do auditing tasks for them. The business pays the bookkeeper and if the service is satisfactory, repeat business may be expected. Another common example is the manufacturing industry, particularly in electronics and apparel. Famous brands do not actually manufacture their own products. What they do is they just come up with their quality standards and specifications. Other companies manufacture these products for them and label these as the brand’s own name.One metric that a scorecard for outsourcing should contain is customer satisfaction. This will measure how customers are satisfied with the product and this will also show how committed the Business Process Outsourcing company is. Commonly referred to as CSAT, this metric is very crucial since the numbers shown will dictate how customers perceive the product and the brand. It is needless to say that once a customer is dissatisfied, he is not likely to do repeat business. Although it may be said that CSAT is subjective because customers have their own idea of what is good and what is not, there are certainly ways to combat this and improve performance.Another metric that should be included in the outsourcing scorecard is the quality of the output. All companies have their own set of pre-defined basis of quality, and all of them have their own processes for quality check. Due to the stringent needs for quality, several processes have evolved like Six Sigma which has tow sub-divisions—DMAIC and DMADV. This is an acronym of Define, Measure, Analyze, Improve, and Control. The other one is Define, Measure, Analyze, Design, and Verify. Certainly, there will always be new ways to improve quality since this is a benchmarking process that will never end. As technology and development improves, expectations will also be different. As such, quality is also expected to improve.