Cutter Consortium
  For more information on Cutter Consortium's Sourcing and Vendor Relationships advisory service, please contact Dennis Crowley at +1 781 641 5125 or e-mail dcrowley@cutter.com.
27 September 2005

MEASUREMENT: THE KEY TO SUCCESSFUL GOVERNANCE

by David Herron, Senior Consultant, Cutter Consortium

The old adage "You can't manage what you don't measure" certainly has proven true in application development and maintenance outsourcing. The benefit and value of using measures to govern an outsourcing engagement are evident from the collective outsourcing experience of organizations. A recent Cutter Consortium survey reveals alarming results concerning the types of problems that organizations that don't measure are facing. Among the top 10 problems cited by the respondents are the following:

  • Expectations not met (48%)
  • Service-level agreements not clear (38%)
  • No measurable evaluation criteria (31%)

The issue is not whether you are going to measure but rather what should you be measuring? Or more importantly, how are you going to measure successfully?

Establishing an effective and successful measurement program can be a daunting task. Following is a list of the steps necessary to develop and maintain a successful measurement program:

  • Measure current levels of performance
  • Establish measures that drive the right behaviors
  • Set attainable targets and goals
  • Start simple
  • Ensure data accuracy and integrity
  • Audit the data
  • Evolve and improve

There is no guarantee that following the above steps will make an outsourcing deal successful. However, with a well-planned and well-executed measurement program, more accurate and factual information will be available to make critical decisions and to improve the likelihood of success.

David Herron Measurement: The Key to Successful Governance