How Can Banks Enforce Performance Standards Set Up in Outsourcing Contracts?

By Christy, Suzanne | American Banker, October 24, 1994 | Go to article overview

How Can Banks Enforce Performance Standards Set Up in Outsourcing Contracts?


Christy, Suzanne, American Banker


John Jones

Regional vice president

Newtrend

Orlando

IT IS IMPORTANT to have the right level of commitment to the oversight process. A lot of institutions take a hands-off approach, but that does not mean you can completely ignore the details. One of the first things bankers should do is establish a fixed meeting frequency with the outsourcer, who can then present statistics and go over other management issues.

Those who take part in the meetings should have at least enough technical expertise so that they can evaluate the performance of the outsourcer. They don't necessarily have to be techies, but they should have some kind of management experience.

As well as having a fixed meeting, them should be a clearly stated agenda. Know exactly what statistics will be reported and what issues need to be discussed. The objectives must be clearly stated with measurable results, something that is attainable and that can really happen.

Once the performance standards are set, there must be incentives built in to ensure they are met.

Jack Fidler

Vice president of operations

Grove Bank

Boston

One of the most important things you can do is participate in a regional and national user group where you have the opportunity to address your concerns directly. An issue or concern ay not be significant when it come from one institution, but when a number of users are having difficulty, we can work together to get an outsources to toe the line.

It is also immensely important that you build in "measurable" performance standards. They are not much good if they can't really be measured.

You also need to verify that the information you are being given is accurate. After all, that is usually what you are being billed on.

But the performance of an outsource is really more dynamic than day-to-day measurements. yes, you do need to know certain information. But those numbers can often obscure the bigger issues, such as if your outsourcer is proactive or reactive. yes, we want them to keep us up and running 100% of the time, but we also want them to help us stay competitive and ahead of the game. We want them to be our partners. That is something that can not be measured by performance standards. It is a relationship that only comes from working with people. These are the things you know intuitively when it comes time to renew the contract.

Some people thank having an outsourcer means you can wash your hands of the whole operation. Realistically, that is not the case.

Richard T. Powers

Chief operating officer

North Fork Bank

Mattituck, N.Y.

Banks must set up very specific benchmarks on the level of service expected and quality assurance issues. The more specific the agreement, the easier it is for both pardes to measure performance standards. In addition, remedies need to be specified in case the outsourcer fails to meet the standards. Penalties do no good if there is not an agreed-upon way to make sure it doesn't happen again.

Standards can be monitored through reports, which should be generated on a monthly basis, minimum. I would recommend weekly reports if someone was starting a new relationship.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

How Can Banks Enforce Performance Standards Set Up in Outsourcing Contracts?
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.