Better benchmarking series: Hitting the hard and soft targets

Plan and potential: Is the service delivering against current goals and objectives?

Following on from my introductory blog on this topic, this is the second in a series of seven brief blogs on the subject of value assurance – best defined as an effective route to maximising value in a long term outsourcing agreement through aligning service expectations, perceptions and realities.

A value assurance exercise typically involves a review of both service provider and client in equal measure. It takes a more holistic view than benchmarking alone and includes and assesses six Ps, the first of which are plan and potential.

If you’re currently managing an outsourcing relationship, analysing the ‘6P’ areas of a relationship is an excellent way to move the performance of the contract towards an optimal state – typically, but not always, this means from a transactional to a true partnership relationship. Organisations I have advised have found the process beneficial regardless of whether they’re at the beginning, middle or nearing the end of a contract.

Plan and potential

When assessing the plan and potential aspect of the relationship, there should be a clear understanding of how the relationship is performing in comparison to the hard and soft targets that were set as critical success factors in the original business case. The service provider must also be able to demonstrate that they have the ability to meet your anticipated future requirements.

Evidence should exist that plans for the future are clearly communicated by both your organisation and your service provider and linked to both service improvement planning and governance activity. There should also be evidence of innovation from both parties to drive improvements.                   

To test the effectiveness of plan and potential in your contract, consider:

•    Benefit realisation, tracking and reporting: Is there evidence that any service delivery benefits are being regularly tracked in your contract and are forecasts regularly reviewed to ensure that plans for optimal performance are in place?

•    Business case review: Has your contract delivered on the original business case?  And importantly, is the contract reviewed against the original business case regularly?

•    Planning reviews and documentation: Do forward looking planning reviews take place, and is the output shared with your service provider?  Also, is the planning review activity aligned with the wider organisation planning?

•    Innovation: Is there evidence of innovation being delivered and acted on in your relationship that has resulted in a tangible improvement?

I hope this provides food for thought for your outsourcing relationship. Next will be a blog on performance – looking at issues such as quality, service levels and service improvement plans.