People Analytics for Outsourcing Governance
No organization can ‘do it all’. Outsourcing is reality, and outsourcing governance an indispensable part of business. To maximize the potential of the vendor, organizations need to constantly monitor and manage relevant aspects of the outsourcing engagement. While service delivery is transferred to the service provider, accountability continues to rest with the client organization. This ensures risks are managed and there is continued delivery of value from the provider.
The client’s Vendor Management Office (VMO) deploys a mix of tools and processes that monitor, measure and manage the providers’ engagement and delivery. But does this really work? Studies have shown that existing methods are not very effective, with most sourcing managers and even vendors facing challenges with their outsourcing relationships.
The biggest culprit in outsourcing vendor management is lack of visibility and predictability. The data that gets shared consists of the project plan, current status, some output metrics, and timesheets. These might give an appearance of transparency and progress, but rarely are they useful in predicting the outcome. The data is mostly historical in nature and can’t be used to drive continuous improvements in value creation. Deadlines are missed, there is a budget overrun. The client either simply accepts the situation, or it leads to a classic blame game.
Most outsourced contracts are Time & Material based and the natural outcome of that is that more delays mean the client pays more. For some Capped T&M, Fixed Cost and SLA-based contracts may reduce the risk, but there is no concrete way to determine if the same output could have been achieved at a lower cost.
Time on work is a key asset that influences outcome. Relying on manual timesheets and allocated headcount is not the ideal scenario. Sapience is a unique People Analytics @ Work solution which provides Automated Visibility into the provider team’s effort and output.
This game-changing approach can help organizations obtain significantly higher values from outsourcing, ultimately benefiting both the clients and provider. Key benefits include:
• Transparency: Sapience delivers information about provider’s employee and team effort (work time and breakup across activities), and trends on a daily, weekly and monthly basis. This is automated and does not require user inputs. The correlation of effort with available output metrics can thus deliver never-before 360o visibility into productivity. Both sides can discuss how to set and delegate priorities to ensure on-time delivery, rather than indulge in a post-facto analysis if things go wrong.
• Dynamic Staffing reduces cost by 20+%: In T&M projects, the provider keeps asking for more headcount as this adds to revenue. If a project deadlines slips, the first reason given is insufficient people. On the flip side, headcount reduction is driven by the client for cost reasons. The Sapience Utilization analytics facilities taking decisions about adding or reducing headcount, back-filling attrition or not, moving resources to other teams, all in an objective manner. Staffing is decided as per current workload, reducing the cost of outsourcing by almost 20%. In non-T&M projects, optimizing resource allocation benefits the provider.
• Retain your top Vendors and Business Models: A large number of services providers creates healthy competition. With the right data, organizations are better equipped to consolidate and retain only the best ones. With Sapience, a head-to-head vendor performance comparison can be done, thus benefitting both, clients and providers, from a predictable cost model and measurable performance benchmarks.
Accurate operational data with insights across many different dimensions as delivered by Sapience is a game changer for your Outsourcing relationships, greatly enhancing both value and trust between the client and the provider.
Dashboard for getting the pulse of outsourced teams
Ability to capture team Effort and correlate with Output provides a 3600 view into productivity, thereby increasing value creation from the provider team
Powerful metrics of per person per day effort give exact insights into team workload
By tracking time on core and non-core work, it becomes possible to drive high impact structural and process changes
Resource utilization trends and reports result in data driven decisions regarding increase or decrease in provider headcount
Provider employees get a Sapience Buddy app on their PC that is their guide on the path to productivity and wellness
Powerful analytics for head to head comparison to determine your best service providers, projects and business models
Timesheet automation with prefilled timesheets including total work time and breakup across activities and tasks, reduces user time and ensures 100% timesheet compliance
Automated performance and utilization data of outsourced teams reduces your VMO’s governance effort and costs
For more details visit – http://www.sapience.net
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