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Are Your Outsourcers Living in an Analytics Black Hole?

By  Dylan Jones  on  3 Sep 2013
  • Supply Chain

Whether you operate a clothing retail business, engineering firm, chain of hotels or global utilities provider, chances are you will be dealing with one or more outsourced organizations.

As more and more companies are pushed to cut costs and deliver greater operational efficiency, outsourcing increasingly becomes a reality for modern business life.

These outsourced organizations are effectively just another department or team within your organization yet they seldom provide access to the level of information that you need to visualize and analyze operational performance, financial controls, staff resourcing and the many hundreds of other metrics that any ambitious business needs to track.

Why is this?

I’ve worked with outsourcers in the past and they’re certainly not short of data so why doesn’t a lot of this information become available to the parent organization?

Perhaps one reason is trust. Outsourcers don’t want to release information that the parent organization may view as poor performing or substandard.

Another reason could be technical. If both parties operate off different business intelligence platforms or underlying IT architectures, then it could be difficult to integrate these landscapes together.

A more common reason may simply be that organizations simply don’t ask their outsourcers to provide timely analytics other than some monthly stats of productivity or performance metrics. Perhaps they don’t think the outsourcer will comply or perhaps they don’t see the value themselves.

Whatever the reason, by creating “analytics black holes” where your outsourcers perform valuable business services you are introducing risks into your business.

With the advent of cloud analytics platforms it actually becomes a lot easier to integrate partners and suppliers into your own business intelligence landscape. By helping them to adopt the same platform you can reduce the friction faced by outsourcers and of course, they benefit themselves by creating richer performance measures.

Some organizations refuse to work with outsourcers and suppliers unless they are TQM or Six Sigma accredited. In the same fashion, I think it’s time that organizations took a firmer stance on what level of information and analytics they expect from suppliers. Build it into your contract and see which companies are keen to open their doors and share operational data. It might just help you find the right partner for the long-term.