If you are outsourcing a contact centre, back office or IT function, you probably have a Relationship Manager and a framework under which your account is managed. Effective relationship management is one of the most important ingredients of a successful outsourcing program, yet how many organisations are KPI-ing it? In the new world of partnering between buyers and suppliers, it seems sensible to consider Relationship Management as a central KPI in commercial agreements.
Relationship management can be measured in a number of ways, some more subjective than others. Firstly, at the commencement of any outsourcing relationship, it should be agreed how the account will be managed and by whom. The frequency and nature of meetings (e.g. quarterly business review), reports and other interactions, and the titles of participating stakeholders for each, should be clearly documented upfront. In this way, the supplier can be measured in terms of what was promised and what was or wasn’t delivered.
Another easily measurable aspect is the responsiveness of the relationship manager to requests of varying degrees of importance. For example, if there was a systems outage, how long did it take the manager to report this to you, and were the actions being taken to resolve the issue outlined? Was the resolution of the issue communicated in a timely manner?
Regular change requests are inevitable in any outsourcing relationship – how accurate was the cost estimate and timeline to implement the requested changes, provided by the supplier?
The number of complaints and compliments can also be measured, as well as the rate of escalation when things are not being addressed well or fast enough.
Perhaps most important of all is the supplier’s ability to maintain a positive relationship with its client, starting with the Relationship Manager, and his or her consistency in communicating openly, and behaving with values of trust and integrity. The relationship manager should be focused on identifying client needs and pain points, and proactively developing solutions to address them. The relationship manager should have an understanding not just of the micro issues, but the client’s business at a macro level. All these aspects can be measured – albeit somewhat subjectively – through a client satisfaction survey and feedback gathered more informally at the next level up.
It may sound like a given, but many outsourcing relationships break down because the relationship manager’s English skills are sub-standard. Clients should hold their outsource partners to a high standard to avoid costly misunderstandings due to language issues. (It is wise to ask to meet the relationship manager who will be assigned to your account, before signing on the dotted line. Make your own assessment of the individual’s communication ability, not to mention knowledge and cultural fit with your organisation.)
All the above considerations can be rolled up into a Relationship Management KPI, which carries both financial risk and reward, depending on performance.
Please contact us if would like to discuss KPI frameworks for your outsourcing relationships.