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Performance Management: Haas Uses Global Outsourcing Report Results to Benchmark, Improve Client Communications

— As printed in the April 1999 issue of Bio/Pharmaceutical
Outsourcing Report
A new benchmarking tool promises to help outsourced service providers establish milestones for their company’s performance – and let them know where they stand against others in the outsourcing industry. The upside for their clients; unprecedented and improving service from their outsourcing relationships.

Developed by Michael Corbett, president of NY based Michael Corbett & Associates, The Global Outsourcing Report serves as a cross industry benchmarking tool on performance management. “We’re really focusing on the way relationships between firms are managed and conducted,” said Corbett. “Because of that, the questions are independent of the industry involved.

The report includes results of client interviews on 10 categories of performance management and feedback on how the provider’s performance compares with others in the outsourcing industry. Proprietary information is shared with each organization, and a compilation of results, stripped of identifying names and information, is distributed to all participants.

Communication, Innovation need work
Conducted as a pilot program last year, the report already is paying dividends. Haas Corporation, a PA-based chemical management organization, used the results of the survey to dramatically reshape the way it does business with its clients. Here’s what happened at Haas:

Prior to participating in the report, Haas conducted several internal surveys of customer satisfaction. But President Thad Fortin felt that an outside organization would be more successful in persuading clients to share the unvarnished truth about what they really thought of Hass’ performance. “Besides, we’re a chemical management company, not a quality survey company,” he adds.

The report showed that Haas must have been doing something right: 100 percent of its clients expressed overall satisfaction with the services they were receiving. Clients were particularly pleased with the accessibility of top management. Since Haas has six via presidents, each with account responsibility, clients rarely need to wade through red tape to get answers.

But, Haas found out, there was definitely room for improvement. Like other organizations who participated in the report, Haas found that its lowest scores were in the area of communications and innovation. Lack of consistency in communications was a common theme, according to Corbett. For example, different members on the outsourcing team might be providing the client with different information, or be communication effectively to different degrees. Has’ experience backed up these findings.

“We’re growing rather quickly, and we’re still in the entrepreneurial role,” explains Fortin. “Communication is one thing that slips through the cracks.”

As for the lower scores in innovation, Fortin sees this as part of the communication issue. “For us, the score in innovation may be a perception. We may not have been documenting what we do well enough,” he says.

Keeping the Customer
Fortin wasn’t surprised by the results of the report. Some of the findings already had been confirmed by the organizations internal studies. “What we thought we were doing well, the report showed we were,” he says. But having clients’ honest feedback in “black and white” became a powerful tool for change, Fortin says. So, after receiving the report, Haas acted quickly.

Fortin’s first step was to share the report with company executives to discuss ways in which the organization could improve. The report then was disseminated among the rest of the reporting structure. And the company prepared a summary of results to share with customers.

Haas then moved to standardize communication procedures. The report found that communication was erratic, with some clients receiving regular reports and others left out of the loop. Now, all clients receive regular communications via reports and meetings.

Haas also expanded its definition of “client.” Haas often is hired by a firm’s headquarters to perform work for a plant located halfway around the globe. Haas used to send reports to either headquarters or the plant, but not both. Now, Haas makes sure both entities receive the same information.

Based on the study, the company also revamped the technology used to generate reports for clients. Haas shaved several months off the new software product’s development time, sending a clear message to customers that the company “got it”: communications counted.

Finally, Haas now publishes a quarterly newsletter that tells clients what’s happening in chemical management, and how it affects them. It also informs clients about the latest goings-on at Haas.

Money to save money
For Haas, The Global Outsourcing Quality Report provided invaluable feedback on how to better satisfy customers. “So much of our business is not product-related, but service-related,” Fortin says. Satisfying a customer’s service needs no only differentiates Haas from the competition, it improves its bottom line, according to Fortin. “We spend a lot of money trying to get a customer, and a three year contract (the typical length for a Haas client) just isn’t a big enough payback,” says Fortin. So Haas wants to make sure customers are so satisfied that they won’t even look at another provider when their three-year contract is up. “Anything we can do to keep customers happy is a more economical investment than attracting new ones,” Fortin says.

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