Procuring, Managing, and Evaluating the Performance of Contracted TMC Services
A fifth trait is that a good performance measure should be supported by economical data collection. Measures that require large and expensive data collection are not likely to be sampled very often due to time and/or budgetary constraints. This makes the measure untimely and insensitive to smaller changes, and ultimately will not convey meaningful results. At the same time, TMCs should recognize that it is okay to stretch beyond the current practice and find and collect additional data sources if the performance measures can provide meaningful results. This trait is arguable as many agencies have fallen into the trap of only looking at measures that can be supported by data they or their contractors already collect. This can hinder effective evaluations and often results in choosing measures that do not support the stated goals.
Guidelines for Selecting Appropriate Measures
Over time, a number of keys have been identified to have a successful performance management program. These keys, listed below, are not set in stone, but provide some guiding principles to help organizations navigate through the chore of picking appropriate measures. These keys are not an exhaustive list from the literature, but rather a compilation of those items and advice which are commonly accepted.
Keep the number of measures manageable – Don’t be afraid to include measures when significant, but exclude measures that are merely interesting and not directly relevant. Making contractors collect and/or provide data for measures that won’t be used will increase the costs of the contract.
Use a balance of measures – Provide measures across all areas of the classification scheme. Determine the critical areas of focus in the TMC and select measures for each area. Remember that some measures are more suited to a particular audience and ensure that the selection of measures can adequately convey understanding to each group of stakeholders.
Be flexible – TMCs, especially ones new to the outsourcing environment, should be prepared to refine the performance measures used to evaluate contracted services.
Go beyond the basics – While it is recognized that simplicity and ease of measurement are attractive characteristics, a TMC should not shy away from measures that may require more data collection or manipulation, if the measure will be an appropriate evaluation metric for contracted TMC services.
Establish regular reviews – The performance measurement process should recognize the need for regular review. Regular reviews of the contracts and procedures at procurement cycles can refine the performance measures used for outsourcing.
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