Establishing Performance Metrics for Managing the Outsourced MIS Project

Abstract

This chapter presents the tactics and metrics an organization applies after having made a decision to use outsource providers. Tactics are used to define the nature and specifics of the outsourcing arrangement, as well as to select the contractual basis of the agreement. Organizations that elect to use providers geographically distant from the client site are cautioned to carefully evaluate capabilities, as well as legal and security issues related to external outsourcers. For these purposes, it is critical to align measures of performance compliance in the form of metrics on each MIS outsourcing relationship. When negotiating and establishing the terms of the outsourcing arrangement, management should ensure that appropriate performance metrics are identified and included, as well as flexibility for change is built in to the contract. This chapter addresses some of the methods, as well as some of the metrics that might be used in such contract agreements. The use of contracts and service level agreements are discussed, as well as in depth techniques for conducting validation and background checks on outsource suppliers. Sample outlines for service level agreement preparation and performance specifications are included for the practitioner.