Why It Matters?
KPI'S that tracks and scale
The main reason businesses outsource is to save money. If you’re not seeing cost savings, something’s off.
Outsourcing can be a game-changer for businesses, but how do you know it’s actually working? Sure, it might feel like things are running smoother, but let’s get real, you need solid metrics to measure outsourcing performance. Here’s a breakdown of the key metrics to keep an eye on to make sure your outsourcing strategy is on point.
How to Measure: Compare your current expenses with pre-outsourcing costs. Look at labor, overhead, and any other expenses that should have dropped. If you’re not seeing a reduction, it’s time to dig deeper.
- Evaluate expenses. Compare pre- and post-outsourcing costs for labor and overhead.
- Check standards. Use customer feedback and error rates to assess output quality.
2. Quality of Work
Why It Matters: Cost savings are great, but not if the quality of work suffers. High-quality output is crucial for customer satisfaction and brand reputation.
How to Measure: Use customer feedback, error rates, and compliance with standards to gauge quality. If complaints are up or standards are slipping, it’s a red flag.
3. Turnaround Time
Why It Matters: Speed is essential, especially in today’s fast-paced market. Quick delivery can give you an edge over competitors.
How to Measure: Track how long it takes for tasks or projects to be completed from start to finish. Compare this with your in-house timelines. Faster turnaround times mean your outsourcing team is on the ball.
Employee Productivity
Why It Matters: Outsourcing should free up your in-house team to focus on more critical tasks, boosting overall productivity.
How to Measure: Look at the productivity levels of your in-house team before and after outsourcing. If your team isn’t more productive, the outsourcing might not be relieving them as intended.
6. Scalability
Why It Matters: One of the perks of outsourcing is the ability to scale up or down quickly based on your needs.
How to Measure: Assess how easily your outsourcing partner can adjust to changes in demand. If they struggle to keep up during busy periods or can’t scale down during slow times, it’s not a good fit.
- Turnaround Time
Track completion. Measure project duration from start to finish against in-house timelines.
- Scalability Options
Assess flexibility. Evaluate your partner’s ability to scale up or down as needed.
- Customer Satisfaction
Gather feedback. Monitor customer complaints and overall satisfaction levels.
- Employee Productivity
Observe performance. Compare in-house team productivity before and after outsourcing.
Final Thoughts..
Measuring outsourcing performance isn’t just about crunching numbers; it’s about understanding how your partnership affects your business holistically. Keep these key metrics in mind, and you’ll have a clear picture of whether your outsourcing strategy is hitting the mark. If not, don’t be afraid to make changes. After all, the goal is to find the best fit that boosts your business in all the right ways.
Remember, outsourcing should be a win-win – saving you money, improving quality, and freeing up your team to focus on what they do best. Keep these metrics in check, and you’re golden.