SmartAdvice: Sarbanes-Oxley Compliance Is Ongoing, So Prepare For Now And In FutureSmartAdvice: Sarbanes-Oxley Compliance Is Ongoing, So Prepare For Now And In Future

Question C: What software would help me manage my outsourced functions better?

Our advice: Outsourced services promise a myriad of benefits--cost savings, improved service quality, and extended skill base. However, many outsourcing contracts don't have a happy ending. Companies either don't realize that it's essential to monitor their outsourcing vendors to ensure successful relationships and services, or wanted to but couldn't do so technically. Until recently, companies often devoted a great deal of time and resources trying to manage their outsourcing vendors. Just finding out the status of service-level agreements for each vendor could be arduous, let alone looking at complex data in context.

Until recently, there were no software applications that could look into the different outsourcing providers' operations. Instead, those who managed the outsourced services were reliant upon the information their outsourcing vendor was giving to them regarding their success or failure. The more vendors the company managed, the harder it was to keep track of the services delivery on a continual basis. Often problems or issues go undetected, or, worse, are discovered too late to circumvent the damages. This complexity is natural where there's no single view into the outsourcer's data, services, and SLA-defined metrics.

Dashboard Software
Before dashboard software, the metrics and measurement of each outsourcing vendor was managed one-to-one. Therefore, the head of outsourced functions, often the CFO or VP of procurement, received reports from each outsourcing vendor, and analyzed the success of each discretely. Because the data was disparate, the different reports couldn't be reconciled into a single software package, and they couldn't be generated in real time. Through Web services, companies that outsource with more than one provider, called multisourcing, now can measure the performance of their outsourcing relationships and tie them to accurate and objective measurements through SLAs, accurately control costs while increasing efficiency of their multisourcing relationships, and have visibility and governance over the delivery of the outsourced services in real time.

Companies are increasingly using dashboard software to manage their outsourcing vendors to ensure that their performance is yielding the anticipated returns. The use of automated analytics and dashboard tools also can help satisfy regulatory requirements, such as those in Sarbanes-Oxley.

The use of dashboard software provides a high degree of control and insight for your company, while reducing the time key resources need to spend gathering data to understand the outsourcer's performance. Dashboards that monitor outsourcing vendors are a relatively new technical innovation; there are few companies that actually focus on it as a core part of their business. It's an advantage to choose dashboard software where many of those key performance indicators, as well as institutional knowledge, already have been incorporated into the functionality of the software. This can bring the wisdom of experience to help you create powerful ways of looking at the data for your industry, and with the type of outsourcers your company hires.

Vendor Shopping List
Additional key feature considerations when shopping for a vendor include:

Finding the right software application to help your company manage your outsourcing vendors can ultimately save time, money, and resources, and yield demonstrable results to understand your outsourcing choices.

Related Links Outsourcing Metrics: Guidelines for Selection http://www.tacadvisory.com/powertips_sample.asp?name=st999749.htm Techniques for Managing Multiple Service Providers http://www.fdic.gov/regulations/information/btbulletins/brochure3.html

-- Vanessa DiMauro

Sanjay Anand, TAC Expert, has more than 20 years of IT and business-process management experience as a strategic adviser, certified consultant, professional speaker, and published author. More than 100 personal clients, both large and small, have included companies from an array of industries and geographies, from academia to technology. He's often referred to as a "consultant's consultant" for training and mentoring skills. He was the creator of Asia's first best-selling computer-assisted learning software package at the age of 17.

Wes Melling, TAC Expert, has more than 40 years of IT experience with a focus on enterprise IT strategies. He is founder and principal of Value Chain Advisors, a consulting boutique specializing in manufacturing supply-chain optimization. He has been a corporate CIO, a Gartner analyst, and a product strategist at increasingly senior levels.

Vanessa DiMauro, TAC Expert, is VP at CXO Systems, and is an expert in building research exchanges and developing decision systems for CXOs. Prior to joining CXO Systems, DiMauro served as executive director of the Computerworld Executive Suite, an online community of 5,700+ IT leaders of midsize to large companies for Computerworld, an IDG company. She also served as director of research for the Management Lab at Cambridge Technology Partners, where she led and taught executive education programs for CIOs at UCLA's Anderson School, Babson College, and the University of Miami.