What KPIs should be included in a BPO contract?

1 Define your goals and expectations

The first step to selecting the right KPIs is to define your goals and expectations for the outsourced process. What are you trying to achieve by outsourcing? What are the benefits and risks involved? How do you measure success and failure? How do you communicate and align your expectations with the provider? By answering these questions, you can identify the most relevant and important outcomes and outputs that you want to track and improve.

3 Balance quality and quantity

The third step is to balance quality and quantity KPIs. Quality KPIs measure how well the provider performs the outsourced process, such as accuracy, completeness, timeliness, customer satisfaction, etc. Quantity KPIs measure how much the provider produces or delivers, such as volume, throughput, productivity, efficiency, etc. Both types of KPIs are important, but you need to find the optimal balance that reflects your priorities and trade-offs. For example, you may want to prioritize quality over quantity if the outsourced process is critical or complex, or vice versa if it is simple or routine.

4 Use industry standards and benchmarks

The fourth step is to use industry standards and benchmarks to set and compare your KPIs. Industry standards are the best practices and norms that are widely accepted and followed by your peers and competitors. Benchmarks are the average or best performance levels that are achieved by your peers and competitors. By using industry standards and benchmarks, you can ensure that your KPIs are realistic, relevant, and competitive. You can also use them to evaluate your provider's performance and identify gaps and opportunities for improvement.

5 Review and update your KPIs

The fifth step is to review and update your KPIs regularly. Your goals and expectations may change over time due to internal or external factors, such as market trends, customer feedback, business strategy, etc. Your provider's performance may also vary over time due to factors such as process improvement, staff turnover, technology changes, etc. Therefore, you need to review your KPIs periodically and update them accordingly. You also need to communicate and agree on the changes with your provider and ensure that they are reflected in your BPO contract.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?