People Analytics for Outsourcing Governance

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Governance is an indispensable part of outsourcing. It involves monitoring and managing relevant aspects of the outsourcing engagement to obtain the best possible results. In outsourcing, although the service delivery is transferred to the service providers, the accountability remains with the client organization to ensure that the risks are managed and there is continued delivery of value from the provider.

The client’s Vendor Management Office (VMO) utilizes a mix of tools and processes to monitor, measure and manage the providers’ engagement and delivery. However, existing methods have clearly not been very effective since most sourcing managers and even vendors acknowledge challenges with their outsourcing relationships.

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Lack of visibility and predictability is the biggest hurdle when working with outsourced teams. The typical data that is shared consists of the project plan, current status, some output metrics, and timesheets. These give an appearance of transparency and progress, but rarely help predict the outcome, let alone helping to drive continuous improvements in value creation. The data tends to be historical in nature and can’t be influenced. When deadlines are missed and there is a budget overrun, the client either simply accepts the situation, or the discussion deteriorates into a blame game.

Most outsourced contracts are Time & Material based and hence more delays mean the client pays more. Capped T&M, Fixed Cost and SLA based contracts may reduce the risk, but the client has no way to determine if the same output could have been achieved at a much lower cost.

Time on work contributed by the provider’s employees is a key asset that influences outcome. Manual timesheets and allocated headcount are not accurate indicators of what is happening at outsourced teams. Sapience is a unique People Analytics @ Work solution which provides Automated Visibility into the provider team’s effort and output.

It is a game-changing approach to obtain significantly higher value from outsourcing, ultimately benefiting both the clients and provider. Key benefits include:

  • Transparency: Sapience delivers the facts about provider’s employee and team effort (work time and breakup across activities) trends on daily, weekly, monthly basis. This is automated and does not require user inputs. It allows correlation of Effort with available Output metrics, thereby delivering never before3600 visibility into productivity. This enables both sides to discuss how to fine-tune priorities so that the team will deliver on time, rather than post-facto analysis of what went wrong.
  • Dynamic Staffing reduces cost by 20+%: In T&M projects, the provider is motivated to keep asking for more headcount since this adds to their revenue. When project deadlines slip, the first reason cited is of insufficient people. Headcount reduction is always driven by the client for cost reasons, and never because the vendor says that they don’t need as many people for the assigned workload. With the Sapience Utilization analytics, decisions about adding or reducing headcount, back filling attrition or not, moving resources to other teams, all become very objective. Staffing is tuned to current workload, reducing the cost of outsourcing typically by over 20%. In non T&M projects, optimizing resource allocation benefits the provider.
  • Retain your top Vendors and Business Models: Most large clients have multiple services providers. There is an increasing trend to consolidate and retain only the best ones. Sapience data enables you to compare vendor performance head to head. Both clients and providers benefit from a predictable cost model and based on measurable performance benchmarks. With Sapience, you can first baseline current performance, and set goals and payment terms that make the business model increasingly tied to results and fair to both sides in a very transparent manner.

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.

Solution Features

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

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