This paper – the last in a series of three – looks at the importance of performance management initiatives in delivering added value in a business process outsourcing (BPO) scenario. The paper illustrates how process excellence – through performance management, a key process excellence component – enables BPO providers to deliver tangible benefits above and beyond cost-savings.

Building on a corporate culture of process excellence

Choosing the right BPO provider will deliver clear improvements to outsourced business processes, by adding value through process optimization and enhanced performance management. These capabilities can only be built on the solid foundations of a corporate culture of process excellence – a topic covered in the previous paper in this series.

This paper outlines the working practices and performance management initiatives that enable select BPO providers to deliver tangible business value to clients through ongoing process improvements.

There are two main criteria around performance management to consider when putting together a shortlist of potential BPO providers - the internal framework for performance management, and the external validation of these approaches. By including both criteria (discussed in detail below) in your requirements from BPO providers, you can ensure that your chosen supplier will be able not only to cut costs but also to optimize your operations and deliver ongoing improvements in quality of service.

1. The internal framework for performance management

Internal calibration

BPO providers that use independent internal reviewers to carry out rigorous checks on performance, SLAs and progress against long term goals are well positioned to proactively identify and resolve problems. These will translate into continuous enhancements to your outsourced processes. When internal scoring measures the full end-to-end delivery rather than just tactical activities, performance measurements will naturally relate to the true impact on operations.

You should ensure that your chosen BPO partner continuously evolves its benchmarks against global standards, so that there is always pressure to improve performance. These benchmarks need periodic review to measure and capture any deviations along with their root causes. The root causes should be fed back as input for further process improvement.

Domain expertise and understanding of processes – through process mapping

An outsourcing relationship can only be successful if the chosen BPO provider truly understands the client’s business processes in detail. It is therefore vital to look for evidence of organization wide process mapping initiatives that feed into in-house training. Such exercises will not only ensure that operatives are highly competent but also enable your chosen BPO provider to make detailed recommendations for process improvement – even in areas not under their direct control.

Globally consistent performance

Many BPO providers offer a combination of near and off-shore operations, and frequently add new sites close to client locations. The challenge is to ensure that the standard and style of service is consistent across all locations globally. Ensuring that a BPO provider applies standard performance management tools and techniques immediately to new sites should be one of the criteria in BPO vendor selection. This helps create a common corporate language for process and performance management, and enables uniform high-quality service from all locations – a key factor if the scope and scale of outsourced operations is likely to grow over time.

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