BPO success demands sophisticated metrics

New research shows outsourcing contracts will be measured in value the contracts bring to the business' bottom line

Business leaders are rapidly changing how they measure the success of their business process outsourcing programmes, reports analyst house NelsonHall. The number of companies using so-called business-oriented metrics is to double in the next two years.

Traditionally, companies have measured the effectiveness of their BPO programmes using either output metrics – such as the time suppliers take to respond to requests – or by input measures, such as cost.

But because these fail to capture some of the complexities of business process outsourcing, business leaders are increasingly using business-oriented metrics, which aim to assess the impact on the business' bottom line report NelsonHall.

A survey by NelsonHall of 200 sourcing managers found the use of BOM to measure outsourcing will double in the next two years.

The research found that even though 79 per cent of organisations use output oriented metrics, such as average answer times, as BPO measures, 87 per cent of respondents believe BOM measures, which show the effect of the outsourcing contract on the business’ bottom line, are the most effective.

Nigel Roxburgh, research director at the National Outsourcing Association, said “The outsourcing industry is always looking to prove its worth to company’s bottom line and the use of business-oriented metrics makes it easier to do this, making outsourcing a more measurable phenomenon.”