Better Benchmarking Series: Make Performance Management Perform

Performance: How well are services being delivered against requirements?

This is the third in a series of seven brief blogs on the subject of Value Assurance – best defined as an effective route to maximising value in a long-term outsourcing agreement, through aligning service expectations, perceptions and realities. A Value Assurance exercise typically involves a review of both service provider and client in equal measure. It takes a more holistic view than benchmarking alone and includes and assesses six ‘Ps’. The second of which, ‘Performance’, is discussed in this blog.

If you’re currently managing an outsourcing relationship, analysing the ‘6P’ areas of a relationship is an excellent way to move the performance of the contract towards an optimal state – typically, but not always, this means from a transactional to a true partnership relationship. Organisations I have advised have found the process beneficial regardless of whether they’re at the beginning, middle or nearing the end of a contract.

Performance

Your service provider clearly has to meet the defined performance levels within the contractual agreement, but should also actively engage in performance management and show that it will intervene where appropriate to keep service delivery on track. There also needs to be evidence of continuous improvement in the performance of the service provider over the life of the contract.

To assess the effectiveness of ‘Performance’ in your contract, consider:

Reporting: Is there evidence of measuring and monitoring performance?

Measurement: Are the metrics being used the most appropriate for your business and operational requirements? And do they accurately reflect the levels of service that you need?

Service levels: Are the services being delivered at the contractual service levels? Also, are these levels aligned to your organisation’s requirements?

Service improvement plans: Is there evidence of continuous improvement and service improvement planning?

Incentive scheme: Does the contracted incentive or credit scheme drive the performance and behaviours that you require?

The next blog on this subject will be on ‘Process’ – looking at issues such as process documentation and process roles, responsibilities and ownership.