While normally associated with internal metrics, key performance indicators (KPIs) can also play a critical role when it comes to ensuring high performance when outsourcing specific IP functions or tasks. That's why setting and reaching KPIs efficiently also provides the answer to the common question, "Why do companies outsource?"
Companies use a range of different metrics to track performance, but most include key performance indicator (KPI) targets in the mix. Typically, KPIs are used to measure the performance of staff or processes, with targets set for levels of success, and underperformance providing triggers for intervention. However, KPI targets can also play a critical role when it comes to ensuring high performance when outsourcing specific IP functions or tasks.
Outsourcing and KPI Targets
Broadly speaking, KPIs measure three different things in an outsourced environment:
- 1. The success rate of a particular work
- 2. The costs for that success
- 3. The time taken to achieve it
As you likely have internal KPIs measuring the same things, it's useful to embed them with your outsourced supplier so you can report internally on progress more effectively.
Measuring Success in Outsourcing
So why do companies outsource? Well, when you're outsourcing IP work, your main focus may be on success. For example, when it comes to online brand protection, there are sensible success-based KPIs you can use, such as the number of cases that have been identified and solved.
For other matters, cost will be the most vital KPI. In general, outsourcing should achieve either the same performance as in-house at a lower cost or better performance for a cost (in financial or other resource terms) that is proportionately less than it would be in-house.
Depending on the IP task outsourced, time may or may not be a crucial KPI. In some cases, it may not matter if your supplier takes longer than you would have in-house to do a particular piece of work if the price is fixed for a specific activity (as long as any delays don't add risk to your portfolio); in other cases, turnaround time may be paramount.
However, all three KPIs are likely to be critical when measuring return on your investment in outsourcing.
For IP Outsourcing, Transparency is Key
When managing KPIs with an external supplier, it's vital to ensure both parties have the same expectations from the beginning of the process.
KPIs can be captured in a contract or a service level agreement (SLA). However, just as with internal KPIs, it's crucial to make sure that everyone understands and accepts the measures—and that they're the right ones to ensure performance.
Ultimately, the answer to the question. "Why do companies choose to outsource IP?" is that they want to reach their KPI targets in terms of costs, time, and success. The next question to consider is, "Which IP services should you outsource—and to which provider(s)?"
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
