In a world driven by efficiency and productivity, many companies are turning toward outsourcing functions that are best delivered externally. That could be because the outsource provider delivers the service more efficiently or effectively. Or it could simply mean that the nature of the service being outsourced has an element to it that makes it non conducive to delivering internally.
Such is the case with many of the functions within the performance management discipline. For a variety of reasons, it makes little economic or practical sense to manage functions like benchmarking, best practice sharing, and other inter-company networking internally. For one, the mere efficiency gained by sharing administration costs of these functions across multiple organizations beats the alternative of “reinventing the wheel” hands down. If you’re not already outsourcing these functions, its something to take a serious look at. In addition to saving considerable amounts of expenditure, companies that have gone down this road have found the cost savings to pale in comparison to the additional value gained.
So let’s assume you decide to outsource some of these key performance management functions. What should you look for in a partner or contractor? There are literally hundreds of consulting firms (large and small) delivering these services, as there are online exchanges, associations, academic institutions, and one-off consortiums. Knowing how to define what you’re looking for, and how to gauge the partner’s capabilities can make the difference between the success or failure of your performance management initiative.
Here are some key attributes to look for when choosing a performance management contractor or service provider:
1. Objectivity and independence:
This is perhaps one of the most overlooked attributes in selecting a PM partner. Consultants, suppliers, and trade associations have for years offered benchmarking and other performance management products for their clients and members. The problem is that most of these organizations have other forces motivating them to deliver such services (e- using metrics that will expose an opportunity to sell a particular product or consulting gig). You’re better off using a service from an organization that specializes in performance management, rather than one that provides it as part of a broader solutions portfolio.
2. Data Integrity:
This one is a real no-brainer. So why is it so many organizations accept such a low standard of data integrity from their service providers? That’s the vexing question. When you look for a benchmarking vendor or performance diagnostic consultant, try and determine how much emphasis they place on data reliability and validity. Look hard at their data validation process, peel back the layers, and then ask yourself if you would trust the data to make critical “life or death” business decisions. My guess is that only a fraction of the data you get today would pass that kind of scrutiny.
3. Content Expertise
Does you vendor bring top industry expertise to the table? Are the people they staff your project with respected players in the areas they support? Could they sniff out performance issues and trends that might lie buried beneath the surface? Or is 70% of your project team staffed with glorified MBA’s with little or no real market experience? Nuff said on that.
4. Market Access
Some of the best insights will come from a very small slice of the market… thought leaders within leading edge companies who have a passion for innovation. The problem is that these companies are not always the big names, and not always easy to find. They are also often unwilling to share information, unless they feel there is an adequate quid pro quo. A vendor that has good market access will not only be able to identify these types of companies for you, but also bring the kinds of relationships that will get you in the door. And sometimes that’s 3/4 of the battle.
5. Action orientation
Nothing is more frustrating than a consultant who has the analytic brains of Einstein, but has never implemented anything in his life. This attribute goes hand in hand with the expertise of the vendor, but also deals with the “propensity for action” that the service provider brings with them. What you want is someone whose bias is for action is high (learn, pilot test, implement- sometimes “going ugly early”), not someone who will get you into a neverending cycle of “analysis paralysis”.
There you have it. 5 key attributes you should look for when bringing on a partner to help with your performance management efforts. A few questions around each of these factors can reveal some key strengths of the vendor, and identify critical weaknesses.
A little time up front can save you a bundle in the long run.
Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at firstname.lastname@example.org