A September 17, 2007, article in CIO magazine entitled “How to Measure Real Outsourcing Success” (Hint: It’s Not the SLAs), pointed out some interesting statistics about outsourcing and outsourcing happiness. Starting with the premise that SLA statistics are not a measure of happiness, the article described a process built by Dr. Paul Roehig at Forrester Research, to better measure outsourcing happiness.

Let me start by saying that I honestly believe that there are portions of a relationship that defy measurement. This is true in a marriage, in a friendship, in an employer-employee situation and in an outsourcing. But these things are often the “mortar” that hold the relationships together – they are neither discreet nor clearly measurable. Certainly, I can look at a building and count the number of bricks used to build it with efficient precision. However, determining the amount of mortar that is holding those bricks together is a little more difficult.

Certainly, the Forrester process shows promise. Like most methodologies, however, it fails to recognize that some things cannot be measured. Missed expectations are a great example. Missed expectations are one of the most significant reasons for outsourcing unhappiness. Because of company dynamics, outsourcing deals are often oversold – both by vendors and internal constituencies. These deals are often presented as magic bullets intended to stem escalating costs, provide comprehensive solutions and work perfectly. This puffery, however, is not easily measurable.

It is, however, possible to create organizational discipline within a company, discipline that would discourage creating internal puffery or accepting a vendor’s puffery. The discipline to recognize that the deal will neither save the company from further cutbacks, nor put a company’s customer satisfaction scores in “JD Powers’” territory overnight. What it can do is save some money, open up resources to more high-value work and offer greater ability to meet business peaks-and-valleys.

Second, outsourced vendors are easy to blame in the event of problems. Certainly, problems are often caused by the vendor. However, many problems are also created by the customer for the vendor as a result of antiquated processes, broken or barely functioning systems and good old-fashioned blame shifting. After all, it is much easier to blame a vendor than it is to take personal responsibility for a problem or fault within the organization. Frankly, the only way to combat this problem is for a company to measure its own performance and for it to be honest in its evaluation of its own processes and people.

Third, these relationships are sometimes overwhelmed by the need to measure something. SLAs are the obvious measurement and, without question, well crafted SLAs do offer great opportunities to measure results. The problem is that SLAs are rarely crafted to measure the customer’s true needs – nor do they tend to align themselves with the customer’s real pain points. Instead, laundry lists of statistics, often with little bearing on the real business at hand, are measured. In many cases, I would recommend replacing existing SLAs with SLAs that are more nuanced and better aligned with the customer’s true needs. Then I would measure them regularly, carefully and thoroughly.

Fourth, as an attorney, the word “partnership” makes me queasy, I do believe that the nature of the customer-vendor relationship is different in successful outsourcing. Instead of the traditional “us versus them” approach that many managers take, I have come to believe an “us and us versus them” approach would be more effective. As a close business ally, an outsourcing vendor and its customer should be encouraged to assist each other in the competitive marketplace. This is not a “partnership,” either legal or otherwise, but instead a recognition that each party will prosper if the other one does. Aligning the customer’s and vendor’s interest – at least when it comes to facing the rest of the world – can enhance the esprit de corps of the relationship – and make all involved parties feel as if they have something to gain.

Finally, take the “temperature” of the relationship. Informally. How a company’s employees and customers feel about their outsourced vendor is critical to that vendor’s success or failure. If the SLAs are great, but the customer satisfaction ratings are low, there is clearly something wrong with the relationship. If your employees are constantly complaining about having to deal with your vendor, there is clearly something wrong with the relationship. On the other hand, if customer satisfaction is up, if your employees enjoy their relationship with your vendor, then recognize that your vendor is likely a valuable business ally, and treat them accordingly.

As business becomes more and more driven by metrics, it is important to remember that there are still things out there that defy clear measurement. However, many of these things are the mortar of a successful relationship. Like in a building, where the bricks and the mortar are critical components, an outsourcing’s measurable and immeasurable results are vital, in combination, to ensure satisfaction.