What is the most effective way to measure outsourcing skills and competencies development?

1. Utilize skills assessments and KPIs to measure outsourcing team proficiency. 2. Gather client feedback and evaluate project success rates for performance insights. 3. Assess training program effectiveness through participant feedback and practical application. 4. Monitor communication, collaboration, and adaptability within the team. 5. Encourage certifications, benchmark against industry standards, and consider employee feedback for a comprehensive evaluation.

Before measuring the outsourcing skills of your providers, assess your own outsourcing skills first. Outsourcing asks for professional skills on both sides. Carnegie Melon developed eSCM, the eSourcing Capability Model that has both a client and a service provider part. Most people are amazed when I tell them the client part has more pages than the service provider part. Taking a look at the eSCM model helps you to realise what skills should be in place when at both sides. Outsourcing often means that clients have to invest in new skills and more professionalism although this might seem counter intuitive. Without the proper skills, how are you to assess the performance of the service provider other than ‘this is not wat we expected’?

Expectations on skills and competencies of the outsourcing provider should be seen in tandem with the expectations from the outsourcing initiative as a whole, and not in isolation. An overt focus on skills and competencies can lead to micro management at the client's end which is detrimental the success of the initiative. Expectation setting should be a 2 step process: 1) Selection Stage - should go heavy on expectations and evaluate thoroughly 2) Post award - projects tend to evolve ( because of tech and business changes) and it is important ensure that the skills & competencies stay aligned to the changes. Clients should ensure that there is a calendar for up/re skilling of the providers resources and the same is reviewed regularly

The most effective way to measure outsourcing skills and competencies development is through a combination of performance metrics, client feedback, and regular skills assessments tailored to specific requirements of the oursourced tasks. Continiuous monitoring and feedback loops will provide a comprehensive view of skill development and overall competency within the outsourcing context.

Our partners often use different ways to ensure that the outsourcing team is equipped to deliver high-quality services. Here are some common ones: 1. Skills Assessment Tests: include test technical proficiency, problem-solving abilities, and domain knowledge. You also need to regularly update assessments to reflect evolving skill requirements. 2. Training Effectiveness: through the use of pre-and post-training assessments to measure knowledge gain and gather feedback from participants to assess the relevance and impact of training. 3. Quality Assurance and Audits: by assessing adherence to processes, standards, and quality requirements; provide constructive feedback, and implement corrective actions as needed.

Measuring outsourcing skills and competency development typically involves assessing key areas such as communication, project management, problem-solving, and technical expertise. Utilize performance metrics related to project outcomes, client satisfaction, and adherence to deadlines. Conduct regular evaluations, consider feedback from both clients and team members, and track the successful completion of tasks. Additionally, assessing adaptability to different outsourcing environments, understanding cultural nuances, and staying updated on industry trends are crucial components. Customized assessments aligned with the specific requirements of the outsourcing role can provide a comprehensive measure of skills and competency development.

In the old outsourcing era, delivery managers spent days to create mandatory SLA reports. Nowadays, the best practice to track operational quality is to create dashboards for all levels of the relationship – from operations to strategic – that use the same data sources. Transparency is the result: everybody involved from both sides look at the same information. This supports having the right discussions about progress and quality. Surveys can be used to track the ‘soft’ aspects of the relationship like satisfaction and trust. In my experience, it is sufficient to perform these measurements every 4-6 months. When tracking the performance for operational services, take care that feedback is asked shortly after the service has been delivered.

Monitoring skills & competency development of the provider requires strong and mature process integration on the client and provider side. Metrics based governance is key to success. While focus has to be both, on "leading" and "lagging" indicators, in the case of skills & competencies, the reliance should be more on leading indicators esp. as the cycle time required to develop skills ( re/up skilling) is rather high and a miss can lead to suboptimal outcomes. This is especially true for time & material engagements.

Set governance structure top down at equal levels. - quarterly or half yearly at executives level / sponsors - review must be beyond contract scope n forward looking - core service delivery target n gaps with focus only on exceptions. no need to act just for the sake of improving numbers, remember your end user don’t care whatever you monitor as IT as it’s not transparent to them

Major outsourcing reasons 1. Cost savings 2. Accessing expertise of an company 3. Focusing on core competencies within the company 4. Scalability 5. Risk mitigation To effectively measure outsourcing skills and competencies development, the parent company must do an internal evaluation to see how much benefit they can achieve. After, a clear communication line must be established between the parent company and the outsourcing company. This will allow clear demarcation of roles and responsibilities and expectations. Consequently, the parent company must encourage the for professional skill building and continued improvement. In the meantime, the outsourcing company must provide dashboards of agreements that add value to the parent company.

The best outsourcing relationships are the ones where client and outsourcer are able to have a constructive and open dialogue about performance based on a transparent sharing of all relevant information. All outsourcing deals are signed with a specific intention in mind, but reality changes as soon as the ink is dry. Priorities shift in time, so make sure that outcomes are related to the actual priorities even (or especially) when these priorities were not clear at the beginning of the contract.

I am focusing on skills and not the overall outsourced project. We should look at the progress in skills & competencies development in 3 stages: 1) Stage 1( Formative ) - focus on performance on regular assignments, module level tests etc 2) Stage 2 ( Summative) - overall assessment at the end of the learning cycle. Can lead to a certification 3) Stage 3 (Action projects) - delivering a use case with the newly acquired skills for a change in business process or IT application. It's good to gather feedback from the business/application owner on the client side and if possible from the market!

You can measure only that you can articulate. Practically most org struggle to even add boundary conditions of outcome. Outcome to IT or to Business or to whom ? It’s subjective n it’s good to leave as management judgement. You need not always invent data for the sake of being data driven org. typically if X as desired outcome happens with Y as inputs n if X n Y are in tolerable range, you are doing good. Some define X in business transaction, some as end user happiness, some as contract performance… higher the maturity, higher the freedom to partner, lower the micro management, lower touch engagements (less interactions), shorter the meetings etc.

The most useful experience is outsourcing experience. The next best expertise are very experienced operation professionals on both sides. Because the target state is theoretical during negotiations, initial version of targets, metrics, pricing and penalties is bound to be off by a large margine. That is why all those parameters should be revisited periodically. In a perfect world tracking should include many more metrics than the mandatory ones, and that information can be used to inform subsequent adjustments. Additionally, even when initial expectations are met, they could change and relatively often. Thst is why the outsourcing business model needs to be malleable, to support business agility.

Clients often consider gaps the responsibility of the service provider. But smart clients look at skill gaps or dissatisfaction with an outsourced service as a shared responsibility. Because in most cases, the performance of a service provider is impacted by the way the client is organized. One company measured the satisfaction of an outsourced services among its employees each month. All dissatisfied employees were called by either a manager of the client or the provider. This incentified both sides to analyse together what impacted the service negatively and what should be done at either side.

No matter how good the provider or how informed the client, gaps in skills & competencies visavis desired outcomes is a reality! This is primarily because things are always evolving esp. in the world of technology. Like "objections" in sales, gaps in skills & competencies should be looked at positively and should be treated as opportunities for continuous improvement. These should be done via focused interventions on a regular basis.

Spot exceptions n prioritise few of them that matters to your key stakeholders Assign a task force or run as initiative to address n closely watch progress, praise in between the positive impact that genuine (not good morning types that you tell to everyone)

I believe this is one of the most missed aspect. Celebrate small wins. Reward high achiever. Always praise in public and constructively criticize privately.

There's nothing more motivating for the providers employees than a positive feedback/appreciation from their client counterparts. In my experience, this tends to outweigh monetary rewards and definitely outweighs appreciation from the employee's managers/leaders. So, if a gap is fixed and an issue resolved, it's in the client's interest ( as well) to appreciate the good work done as it will help the overall cause of outsourcing and deliver better outcomes for the client. I would qualify this and say that these gaps which deserve vocal/visible appreciation from the clients end, should be somewhat substantial and not minor improvements else, the value of the recognition gets diluted. A pat on the back doesn't harm for everything else!

Partners need to do for their employees at their discretion. Customer can have indirect influence to partner towards recognition. Customer must not cross org boundaries, partner HR practices, n play within corporate compliance. Genuine appreciation / recognition is always good even if it’s not always monetary terms. This motivates always.

Publicly acknowledge achievements to enhance their visibility and impact. Share success stories, accomplishments, or milestones through company-wide announcements, newsletters, or internal communication channels. Consider hosting some events or ceremonies to celebrate achievements and highlight the contributions of individuals or teams.

Consider that metrics are not all equal. Managers often confuse 'pulse metrics' for 'growth metrics'. Managers are wired for growth with metrics as revenue. Therefore they forget that a metric like satisfaction is a pulse metric. Satisfaction is often measured in a survey on a ten point scale and then calculated as an average for a specific period. This means that it is very difficult to improve the satisfaction rate beyond a certain point. Managers conclude ‘we are stuck’. But maintaining satisfaction at the same high level for a long period of time is an achievement in itself. Measuring satisfaction is the same as measuring your body temperature: the aim is not to keep increasing the number.

All mentioned 5 areas are important: 1. Define your expectations, 2. Monitor and track progress, 3. Evaluate and measure outcomes, 4. Identify and address gaps, 5. Recognise and reward achievements, 6. Here’s what else to consider. However, your organisation need to be ready to perform all, you need to have right, mature team to address this, managed outsourcer in this way. This need skilled, senior management team on Customer side to ensure proper quality of above 5 areas. Based on Gartner report from few years ago - main failure of outsourcing contracts was not proper governance level on Customer side.

In my experience, best results happen, if clients incorporate skills & competence development of their provider's employees into their HR processes and not merely direct/review from a distance. After IT is all about human resources and what they bring to the table - in a way, the "person" is the "product"! Hence, a holistic approach at the client's end can be a game changer..