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The Contract Scorecard : Successful Outsourcing by Design

The Contract Scorecard : Successful Outsourcing by Design

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The Contract Scorecard : Successful Outsourcing by Design

The Contract Scorecard : Successful Outsourcing by Design Summary:

 
By Sara Cullen
  • Publisher:   Gower
  • Number Of Pages:   266
  • Publication Date:   2009-03-01
  • ISBN-10 / ASIN:   0566087936
  • ISBN-13 / EAN:   9780566087936
Product Description:

Adoption and use of a contract scorecard demonstrates a maturing ability to manage commercial outsourcing arrangements. The process of designing the scorecard helps you nail down the key outcomes and avoid lack of focus, inconsistent objectives, hidden costs, indifferent service and deteriorating relationships with your contract partners. Sara Cullen's "The Contract Scorecard" will help you design and drive successful contracts. It offers a systematic guide based on practical advice and examples; one that explains the Contract Scorecard concept and demonstrates crucial implementation activities such as: the development of performance measures that work; Sound Service Level Agreements that make obligations clear; and, a Governance Charter that ensures both parties will adopt successful management techniques. An upfront investment in your contracts, from a commercial rather than legal perspective is probably the single most influential activity you can undertake; one that will ensure your outsourcing relationships have clear business goals as the focus of the deal. Reading a copy of Sara Cullen's "The Contract Scorecard" should be the first step in that investment.


Summary: Directly relevant content
Rating: 5

What is unique about this book on outsourcing (and let's face it, there are a lot), is that it explains why so many organizations have gotten into trouble in their outsourcing deals with some great stories and the explains how to do it right. I compared the KPIs in this book to what we have in our contracts and had so many "doh!" moments my head hurt.

Summary: No-nonsense
Rating: 5

It's an old cabinet makers' adage to measure twice and cut once; that way you get the right length of timber every time. Well, from what I've seen of this book, the Contract Scorecard is a no-nonsense, step-by-step guide, showing you how to measure outsourcing results, so you get what you really want out of outsourcing. The author, Sara Cullen, has compiled the wisdom she's distilled from working with over a hundred different organizations around the world. So unlike a lot of academics who write about outsourcing theory in an abstract way, she has the practical experience to back up her ideas. The book is written for people at the coal-face of outsourcing, and not those who just talk about it. The case studies are particularly helpful, because they clearly illustrate the advantages to be gained from "careful measurement", and what disasters await those too eager to start "cutting that plank up".


British Library Cataloguing in Publication Data
Cullen, Sara
The contract scorecard : successful outsourcing by design
1. Contracting out
I. Title
658.4'058
ISBN-13: 978-0-566-08793-6
Library of Congress Cataloging-in-Publication Data
Cullen, Sara.
The contract scorecard : successful outsourcing by design / by Sara Cullen.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-566-08793-6
1. Contracting out. 2. Contracting out--Evaluation. I. Title.
HD2365.C85 2009
658.4'058--dc22
2008040985Contents
List of Figures ix
List of Tables xiii
Foreword xv
Preface xvii
1 Introduction 1
About this Chapter 1
Purpose of the Contract Scorecard 1
Research Base 2
Roots of the Concept 3
Structure of this Book 5
2 The Quadrants of the Contract Scorecard 7
About this Chapter 7
Quality Quadrant 9
Financial Quadrant 21
Relationship Quadrant 29
Strategic Quadrant 37
3 The Steps in Developing KPIs 47
About this Chapter 47
Step 1: Allocate Party Responsibilities – Identify Who is
Acountable for What 48
Step 2: Conduct Stakeholder Assessment – Distinguish
Who Cares about What 50
Step 3: List KPIs – Get the Big Picture 53
Step 4: Set KPI Thresholds – Pinpoint the ‘Care’ Points 54
Step 5: Generate Calculation Method – Specify the Maths 56
Step 6: Prototype Reports – Design the Publication 58
Step 7: Conduct Testing – Make Sure it will Work 60
Other Issues to Consider 61
4 Schemes for the Consequences of KPI Performance 65
About this Chapter 65
Exploring the Basis for KPI Schemes – Recourse versus
Rewards 65
Timing 70
Chapter Appendices 80
5 Planning the Contract Scorecard 85
About this Chapter 85
Adoption – Choosing the Quadrants Appropriate for
Each Deal 86
Preparing the Scorecard Blueprint 89
Timing in the Contract Lifecycle 96
Critical Timing to Manage Bargaining Power and the
Total Cost of Contract 105
6 The Quality Specification – The Service Level
Agreement (SLA) 111
About this Chapter and SLAs in General 111
Section 1: About this SLA 113
Section 2: Scope Overview 115
Section 3: Work Specification 117
Section 4: Reporting Specification 121
Section 5: Key Performance Indicators (KPIs) 121
Section 6: Effect of KPI Performance 123
Appendix: Example SLA 124
7 The Financial Specification – The Financial Schedule 147
About this Chapter and the Financial
Schedule in General 147
Section 1: About this Financial Schedule 148
Section 2: Costs 149
Section 3: Reimbursables (Optional) 150
Section 4: Invoicing 151
Section 5: Payment 152
Section 6: Charges 154
Section 7: Key Performance Indicators (KPIs) 169
Section 8: Benchmarking (Optional) 169
Appendix: Example Financial Schedule 174
8 The Relationship Specification – The Governance
Charter 179
About this Chapter and the Governance Charter in
General 179
Section 1: About this Governance Charter 182
Section 2: Governance Structure 182
Section 3: Relationship Values Charter (or Code
of Conduct) 185
Section 4: Meetings 187
Section 5: Reviews, Evaluations and Audits 192
Section 6: Issue Management 198
Section 7: Variation Management 200
Section 8: Dispute Management 203
Appendix: Example Governance Charter 209
9 The Strategic Specification –
Unique Contract Schedules 223
About this Chapter and Strategic Schedules in General 223
Example Innovation Specification 224
Example Contribution Specification 225
Example Underlying Work Practices Specification 227
Example Alignment with Corporate
Initiatives Specification 229
10 Conclusion 237
References 239
Index 241
About the Author 245Preface
This book will help you design and drive successful contracts. Different people
have diverse beliefs as to what successful contracts are. Some would consider a
contract successful if it did not end up in court. Others believe it to be successful
if they did not need to manage the contractor too much. In this book, success
means that the people in your organization got the results they were seeking
– not that failure was avoided.
This book is more than a ‘feel good’ management book; it is a systematic
guide to success full of practical advice and examples using the concept of
a Contract Scorecard. Not only is the Contract Scorecard concept explained,
but also the crucial implementation activities such as the development of
performance measures that work in practice, sound Service Level Agreements
that make obligations clear and effective, and a Governance Charter that
ensures both parties will adopt successful management techniques.
There are a number of case examples presented throughout this book,
highlighting what can happen when long-term success is not kept in mind
when designing and managing contracts. Some of the cases might astound
you, as I have been continuously astounded throughout the decades I’ve
been practising. These were all smart folks, but just did not have an in-depth
understanding of the ramifications of what they were doing at the time. As
these cases will demonstrate, it is too easy for us all to lose track of why we are
doing things in our rush to get things done – particularly contracts!
You will need to make an upfront investment into design and manage successful
contracts – something many organizations do not do. Even a minor investment in the
better design of a contract’s success will yield a superior return on that investment.
As so many clients have told me, the number one thing they would do differently
in all their contracts is to design them better – not from a legal perspective, but from
the business perspective. This book is all about making the business goals the focus
of a deal and making sure your desired outcomes happen.
Sara Cullen
 
 
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