The Balanced Scorecard approach to performance management in Hiperos 3PM ™ works well for assessing the performance of a defined group of third parties, a group of third parties performing similar tasks, or the entire third party base.
Often the Balanced Scorecard approach is used with third party relationships that are less critical, or not as complex as other relationships the company has in place and do not require the same cadence of review.
Some key aspects of the Balanced Scorecard Approach:
- Evaluation items are general and apply to a broad range of suppliers
- Evaluation is performed at different levels (contract, supplier, region)
- Frequency of evaluation is relatively low (semi-annual or annual)
- Many times tied to segmentation model
- Balance of both leading and lagging indicators
Third party relationships that require more oversight, are more critical to the company strategy and objectives can be managed by more specific criteria, such as Key Performance Indicators (KPIs) with more detailed reporting.