Asset Management companies have become more discerning and progressive about what could and should be outsourced and what should be retained in-house from either a control or Intellectual Property perspective but what needs to happen after these functions have been successful transferred?
The IKINDI KTier ™ empowers firms with at-a-glance oversight control of outsourced functions through SLA/KPI monitoring & escalation, helping to support critical data governance & regulatory oversight functions of the Outsource Service Provider ‘OSP’ as the functions can be outsourced but not the responsibility for those functions.
As outsourcing of functions grow, so too does the necessity to oversee these service levels so that quality, timeliness and accuracy of information is maintained (or highlighted for urgent attention and remediation). As the Central Bank of Ireland has outlined, areas that need regulatory oversight attention are:
Monitoring Key Performance Indicators (KPIs) is a powerful tool for organizations that engage in outsourced operations. KPIs enable businesses to measure and evaluate the performance of their ‘OSP’s, ensuring alignment with strategic objectives, maintaining accountability, and driving continuous improvement.
Monitoring KPIs enables a comprehensive evaluation of key areas such as quality, timeliness, accuracy, customer satisfaction, and compliance. Regularly monitoring KPIs ensures that the OSP’s performance aligns with the organization’s expectations and allows for informed investment decision-making based on real-time data.
KPIs serve as a link between outsourced operations and the organization’s strategic objectives. By defining specific KPIs that directly contribute to these goals, organizations can ensure that the outsourced operations are driving progress in the desired direction. Aligning KPIs with strategic objectives enables organizations to focus on the metrics that are most critical to their success, facilitating a purpose-driven approach to outsourcing. This alignment empowers organizations to make data-informed decisions and assess the overall impact of outsourced operations on their long-term vision.
Monitoring KPIs enables organizations to proactively manage the performance of their OSPs. By regularly tracking and analyzing KPI data, organizations can identify trends, patterns, and areas for improvement. Deviations from established KPI targets can indicate potential issues or opportunities for optimization. With this information at hand, organizations can take proactive steps to address concerns, drive performance improvements, and ensure that the service provider consistently delivers high-quality results (or risks getting replaced). Proactive performance management contributes to enhanced efficiency, increased productivity, and improved overall outcomes.
KPI monitoring establishes a framework for accountability and effective contract management in outsourced operations. By setting up KPIs as part of the contractual agreement, organizations can clearly communicate their expectations to the service provider. When performance is measured against predefined KPIs, it becomes easier to hold the service provider accountable for meeting contractual obligations. Regular review and evaluation of KPIs fosters open and transparent communication between the organization and the service provider, ensuring that both parties are aligned and working towards shared goals.
Monitoring KPIs encourages a culture of continuous improvement and collaboration between organizations and their OSPs. By analyzing KPI data, organizations gain valuable insights into performance trends, strengths, and areas requiring attention. This information can be used to provide constructive feedback to the OSP, fostering a collaborative partnership focused on driving excellence. KPI monitoring facilitates discussions on process optimization, innovation, and quality enhancement, leading to continuous improvement in outsourced operations and mutual growth opportunities.
KPI monitoring plays a vital role in risk mitigation and ensuring compliance in outsourced operations. By tracking relevant KPIs, organizations can identify real and potential risks or compliance issues early on. Deviations from established performance metrics can indicate areas where risks may arise, such as data security breaches or regulatory non-compliance. Timely identification of these risks enables organizations to take proactive measures, implement necessary controls, and ensure adherence to legal and industry standards, thereby minimizing potential disruptions and reputational damage.
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