Measuring the performance of managed service providers (MSPs) is a crucial concern for category managers, but getting those metrics right and ensuring that they provide a clear picture of performance and also give valuable intelligence that the function can use is the real challenge. Get it right and the rewards can be great.
Traditionally, many organisations have used scorecards to assess the performance of their MSPs, however, it is difficult to translate some of theses metrics used across every category and supplier.
The challenge for category managers is thinking about and creating metrics that will make a difference – and it is made harder by the constant state of evolution that many categories are in. To add to the problem every company and every one of their suppliers has different requirements and views about what should be measured.
It is vital that scorecards are created with the supplier in mind. The range and influence of your suppliers needs to be considered when thinking about any metrics that might go on to a scorecard because in some instances suppliers may have little control over things that they might be being measured on. For example, in the staffing industry it is often the case that there are factors put to the test by scorecards which the MSP has limited or no control over, such as time-to-fill.
By tracking the amount of time it takes a supplier to fill the role in question with a suitable candidate you can get a decent understanding of success. However, this metric does not take into account any delays caused by hiring managers within the organisation, which are outside of the supplier’s control.
In this instance it would be far more beneficial to utilise a time-to-submit metric instead which can measure the pace at which the supplier presents a selection of suitable candidates.
Talking to your suppliers in the first instance will also prove beneficial in the long run because you will be better positioned to understand what they consider as important measurements.
Continuing the search for a standardised approach to performance measurement through standardised scorecards is unlikely to be a fruitful exercise, either for you or your business. It is better instead to think about what you need to know from your suppliers, what the business needs to know from performance and how these will drive performance. It may seem like a time-consuming exercise but the rewards in the long run are too many to ignore.