Performance assessment of outsourced service engagements: Leveraging economic theories based critical success factors

Periodic performance assessment is critical for outsourced service engagements to ascertain whether client and service provider objectives are being fulfilled. Performance assessment of dynamic system is a systemic problem and calls for systems thinking approach to solve it. Traditional methods of performance assessment of service engagement use metrics, which are not often the real driver of satisfaction [1]. Besides, traditional approaches provide static point-in-time view of the engagement's health. This paper proposes performance assessment along a set of critical success factors (CSF) derived from IT outsourcing theories [2]. These CSFs provide complete perspective to IT outsourcing as they are grounded in economic theories on IT outsourcing. We propose system dynamics modeling and simulation based approach to assess performance of a service engagement along a set of CSFs.