What makes a performance evaluation system work?
The Boss said it right. Finding the right consultants for your panel, manage your relationships with your suppliers, and embarking on your top leadership in the journey is hard.
What makes a performance evaluation system work?
But if you have been around for a while, you know that the hardest part is not implementing new practices… it is to stick to them in the long run.
But let’s not get ahead of ourselves, and let’s start with the basics.
“Getting an audience is hard. Sustaining an audience is hard. It demands a consistency of thought, of purpose and of action over a long period of time.” – Bruce Springsteen
Category management is one of the most popular procurement methodologies, along with strategic sourcing.
Why implementing a performance evaluation system for consulting?
We can always start with Peter Drucker: “What’s measured improves.” Unless you put a system that captures the goods and bads of your projects, there is no way you can make sure your consulting sourcing process is efficient or that your projects deliver the expected value.
Monitoring the relevant dimensions that a system produces will provide you with a wealth of inputs your firm can use to:
Measure the impact of your Consulting Spend
Understand who spends money on what and with whom
Create individual ScoreCard per project, or Consulting Firm
Compare the performance of the different Consulting Firms
Identify the Low- and the High-Performers
Building an appropriate performance measurement system is your first step towards creating value through consulting and taking control of the consulting category while keeping decision-making and feedback in the hands of the project sponsors.
But again, implementing a fancy performance evaluation system is only the first step of the journey. To rake the full benefits, you need to make sure to maintain, or better improve, your new ways of working in the long run.
Consistency is a Key Factor –
We should emphasize that if you start measuring the performance but stop after a few months or measure it on a random basis, it will be difficult to convince your suppliers of the seriousness of the effort.
To avoid this unfortunate situation, we suggest integrating the performance as a part of your Procure to Pay Processes (P2P).
The distribution of the performance measurement survey can be automated as part of the workflow when you open a new project and should be mandatory before the official closure of the project. It can be established as a mandatory step before proceeding with the last payment to the supplier.
The ultimate goal is to improve –
But evaluating and measuring performance is, in fact, designed to bring improvements.
Set out a few dates on your calendar for discussions with your main providers about their performance over the last few projects. The focus and topics can cover the overall performance and will be the starting point of the improvement plan.
The goal of the exercise also is to yield value for the internal stakeholders, as they will have to spend time filling in the surveys. Once a year at least, plan a debriefing with them about the performance of the key suppliers in the panel. Take advantage of this meeting to discuss what will be the future needs and to identify changes to be brought to the panel.
Depending on the situation, and the project, improvements may include:
Staffing (e.g., displacing low performing individuals or those with the lowest fit with your company’s culture),
Movements in and out of projects (staffing evolving too frequently, poaching of collaborators, …),
Perceived performance or impact issues (disconnect between costs and actual impact), lack of expertise on a given subject,
Compliance with company processes, policies, and commercial terms (daily rates, discounts, …).
Creating an internal network of experts to monitor and support improvement actions. They can be functional experts or ex-consultants. They can help you review the outcomes of the key projects, the feedback on the various firms, and design improvement plans more specific to the expertise of each consulting firm. They can also support you to identify, through their network, alternative consulting firms not initially on your radar screen.
A performance measure is a key to efficient category management. It will help you make sure that your sourcing process is well-designed and delivering on the promises. But, more broadly, especially for consulting, it is the only way to ensure that you are getting the value you expected from your investment.
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