All of the analysis and researches suggest that outsourcing is likely to continue its increasing popularity in the foreseeable future. As this trend continues, learning curve of the involved parties also continues to develop and based on lessons learnt, companies aim to pinpoint rooms of improvement in the outsourcing process.
Outcome-based outsourcing, one of the latest practices in this respect, addresses the issue lying at the heart of the outsourcing process – attaining not only cost-cutting but also achieving the strategic targets.
In example, if a company chooses to outsource its call center, the purpose of that call center should be solving problems. However, measuring the success by call volume does not address why the company chose to outsource. The company might have saved money, but is the customer service improved at the same time?
Let’s have look at an example of outcome-based outsourcing Forrester worked with: A major retail company needed its web site and call center to be 100% operational from Thanksgiving through Christmas, and the outsourcing partner priced its services based on this goal; and got a million dollar bonus by reaching that 100% up-time goal which was written in the contract.
While adopting such an approach provides great chances of attaining a win-win situation, it is estimated that only 20% of outsourcing deals are based on such outcome-based contracts, mainly because specific business outcomes are hard to predict. Still, it is always a good practice to keep in mind and try to adopt while making outsourcing deals.