Many companies use balanced score cards to track vendor and supplier performance. They vary in quality and consistency of use. More and more client organisations are now building capability to ensure that sourcing performance is manage consistently and objectively. This requires a move away from balanced or performance cards which vary from vendor to vendor. It also requires a move away from measures which can be subjective or which are not clearly understood or comparable across vendors. It is often referred to as evidence based supplier management.
Best Practice now demands that clients and suppliers base their relationship and the performance equation on commonly agreed performance objectives which are frequently reported on. Reporting should be on risks and issues as well as KPIs. Furthermore clients should be in a position to understand the impact of issues on service quality. They should also be able to see very clearly the risk profile on each supplier.
Risk and performance levels on each contract and supplier should then be capable of being aggregated and analysed to ensure that there is organisational level visibility of sourcing performance. Clients should be able to quickly answer some very simple questions quickly – whether they have 5 or 10,0000 vendors. These include;
- What are my best performing vendors?
- Which KPIs and capability areas are consistently green or consistently red?
- What are the areas for improvement in our sourcing strategy?
- What are the key risks across all our sourcing relationships?
- What are the key risks on our main sourcing relationships?
- What is the performance score for each contracts?
The answer to these questions are not easily provided by managing sourcing relationships via spreadsheets and e-mails. this is why ServiceFrame is an online portal where suppliers and clients can collaborate to share information on risk, issues and performance. Unlike traditional tools ServiceFrame can be deployed in a matter of hours to manage agreed KPIs- giving both clients and service providers immediate online dashboard visibility of the key attributes that will drive a successful relationships – and all of it based on evidence not opinion.
