The emergence of services outsourcing as the new standard for doing business has changed the way most business owners measure their success and profits. But how do you determine real success with an industry that is still being met with criticism for its methodology and results?

The statistics for services outsourcing buyers are quite satisfactory and not as dire as many would perceive it to be. An estimated 57 percent of those who outsourced IT services were happy with the results they got and another 22 percent say they are very satisfied. The remaining 20 percent believe there is still room for improvement although there are no indication that the decision to outsource caused any disaster to their company either.

It is therefore advised that you regularly monitor the status of your outsourcing deal to ensure that you are reaping positive results from it. However, experts suggest that you go beyond the service-level agreement to determine work performance and the price benchmarking when you are measuring your success with services outsourcing.

In terms of SLAs, all providers have a basic suite of services to offer their clients so this is a variable when determining whether one is satisfied or dissatisfied with the service. On the other hand, cost savings could also vary depending on what tasks you are outsourcing and where. The simplest method for measuring success in terms of cost savings is to compare the prices offered by the provider against the market standard.

Many experts would contend that you need to focus on the so-called “key pain points” when determining the success (or failure) of your services outsourcing agreement. Surprisingly enough, it is not the performance comparison to the SLA nor the contractual aspect of the services outsourcing deal that often becomes a source of frustration among clients. Instead, it is the inability of an outsourcing vendor to manage change, innovate services, or the lack of business savvy or other such values.

There are six specific areas that must be evaluated to truly measure the success of your decision to outsource services. These categories include the following:

*Business management – Does the outsourcing provider make it a consistent effort to improve activities within the business scheme? Are any effort done intended to reduce labor cost while increasing business efficiency, competency, and customer satisfaction?

*Relationship – There has to be a clear structure on the type of relationship existing between the customer and the vendor. This will ensure that account responsibilities are clearly specified and the parties concerned are held accountable for any lapses or shortcomings within that structure.

*Market status of outsourcing provider – You must look into the financial strength or status of an outsourcing vendor, as well as their productivity level judging from their portfolio.

*Expectations – This is an evident measure of success and satisfaction rate in a services outsourcing contract. The expectations here refer to the price value, the quality of services, and overall performance. The same goes for any transformation or innovation introduced into the deal.

*Transformation capability – This is an integral category to consider such that your business can flourish and be able to adapt with the changing times. When any transformation is introduced into the deal, you need to make sure that it will not disrupt any of the major plans you have going on in the agreement.

*Delivery management – You need to examine the delivery processes observed by an outsourcing provider and whether they are able to meet up to their obligations.

You need to come up with a scale of 1 to 5 for each category and assign scores for each item. This will provide you with a concrete and quantitative information that you can use to evaluate or measure success rate for your services outsourcing agreement with a provider. The qualitative aspects will still matter later on but you need to have a concrete information you can use for evaluation.

The concept of grading would be useful not just for assessment of your own success rate, but also will enable you to analyze the current output to develop an improvement program that you can apply on a moving forward basis.

But before you even enter into an outsourcing contract, you need to understand that you get what you ask (or pay) for. This is therefore a good middle ground that you can use for regular checkups on the status of your outsourcing deal and facilitate in a continuous improvement.

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