How can you measure the ROI of your outsourcing and partnering activities?

1 Define your goals and metrics

Before you can measure the ROI of your outsourcing and partnering activities, you need to define what you want to achieve and how you will track it. Depending on your objectives, you may use different metrics to measure the outcomes and benefits of your activities. For example, if your goal is to save time and resources, you may use metrics such as hours saved, cost per lead, or operational efficiency. If your goal is to improve quality and customer satisfaction, you may use metrics such as error rate, retention rate, or net promoter score. You should also establish a baseline and a target for each metric, so you can compare the results before and after your activities.

2 Calculate your costs and benefits

The next step is to calculate the costs and benefits of your outsourcing and partnering activities. The costs include the direct and indirect expenses associated with your activities, such as fees, salaries, overheads, training, or management. The benefits include the monetary and non-monetary gains from your activities, such as revenue, profit, productivity, or reputation. You should also consider the opportunity costs and risks of your activities, such as the potential loss of control, quality, or innovation. To calculate the costs and benefits, you can use tools such as spreadsheets, accounting software, or financial models.

3 Compare your costs and benefits

Once you have calculated the costs and benefits of your outsourcing and partnering activities, you can compare them to determine the ROI of your activities. The ROI is the ratio of the net benefits to the net costs of your activities, expressed as a percentage. For example, if your net benefits are $10,000 and your net costs are $5,000, your ROI is 100%. You can use tools such as calculators, dashboards, or reports to compare the ROI of your activities with your goals, metrics, baseline, and target. You can also compare the ROI of different activities, scenarios, or alternatives to evaluate your options and optimize your strategy.

4 Analyze your results and insights

The final step is to analyze the results and insights from your ROI measurement. The results and insights can help you understand the effectiveness and efficiency of your outsourcing and partnering activities, and identify the strengths, weaknesses, opportunities, and threats of your activities. You can use tools such as charts, graphs, or tables to visualize and communicate your results and insights. You can also use tools such as feedback, surveys, or interviews to collect and analyze the opinions and experiences of your stakeholders, such as customers, partners, or employees.

5 Adjust your actions and plans

Based on your results and insights, you can adjust your actions and plans to improve the ROI of your outsourcing and partnering activities. You can use tools such as action plans, checklists, or schedules to implement and monitor your actions and plans. You can also use tools such as reviews, audits, or evaluations to measure and report your progress and performance. You should also revisit your goals and metrics, and update them as needed, to reflect the changes and challenges of your activities.

6 Repeat the process and cycle

Measuring the ROI of your outsourcing and partnering activities is not a one-time event, but a continuous process and cycle. You should repeat the process and cycle regularly, to track and optimize the ROI of your activities over time. You should also adapt the process and cycle to your specific needs and context, to ensure the relevance and accuracy of your measurement. By measuring the ROI of your outsourcing and partnering activities, you can make better decisions, improve your results, and demonstrate your value.

7 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?