Performance management of suppliers in outsourcing project: case analysis from the financial services industry

Abstract

This study investigates the characteristics of an effective performance management framework for outsourcing projects in a UK-based financial services organisation and how this may contribute to the success of the outsourcing arrangement. The analysis draws on outsourcing and performance management theory, and uses both primary and secondary data. Valuable information was found on objective setting, performance measurement and performance improvement in the outsourcing project. An adapted version of the Balanced Scorecard, termed a Logic Scorecard, is suggested as a measurement tool; a service credit system and a continuous improvement schedule used to enhance supplier performance. The Performance Management Framework, which is one of the pillars of the Supply Chain Operations Reference (SCOR) Model, was developed, and provides practitioners with step-by-step guidance for the implementation of performance management in outsourcing projects. This combines both suggestions for performance management before and after the outsourcing decision, thus considering the entire outsourcing lifecycle. The proposed 10-stepFramework for outsourcing not only incorporates strategic propositions but also shows its implementation at an operational level.

Measuring servitization progress and outcome: the case of ‘advanced services’

“…Research on performance measurement is conducted in business research domains as diverse as operations management (Bhattacharya et al, 2014(Bhattacharya et al, , C-C et al, 2006, strategic management (Artz et al, 2012, Bisbe andMalagueño, 2012), and accounting (Ax andBjørnenak, 2005, Marr andSchiuma, 2003). Across these domains, Neely et al (2002) definition of performance measurement as 'the process of quantifying the efficiency and effectiveness of past actions' (p. xiii) is widely adopted, specifically in the operations management domain (MacKerron et al, 2015, Büyüközkan, 2004. The range of studies across these different domains can be grouped into three research perspectives (Folan and Browne, 2005b): 1) the identification of performance measures, 2) the integration of measures into performance measurement frameworks, and 3) the operationalisation of performance measurement systems.…”

Integrating risk and performance management in quality management systems for the development of complex bespoke systems (CBSs)

“…The purpose of this study was to examine how risk and performance management are integrated in quality systems for successful development of CBS projects. Although extant literature demonstrates that there is an overlap between performance and risk management (Keil, 2013;Palermo, 2014, there is limited empirical evidence showing the relationship between the two in CBS companies (Liu, 2015;Keil et al, 2013;Kumar et al, 2016;Mackerron et al, 2015).…”

“…While there is a plethora of scientific-and practitioner-based research articles on risk and performance management, they are often viewed as separate disciplines and rarely considered together (Kumar et al, 2016;MacKerron et al, 2015;Vrassidas et al, 2004). In spite of this, risk and performance management are in many respects two different sides of the same coin.…”

Conceptual Design of Sustainable Outsourcing with Balanced Scorecard Using Analytic Hierarchy Process: A Case Study for Fajr Jam Gas Refining Company

“…Mackerron et al [18] Measuring processes or services continuously against the market during the contract period, effective management of the contract during the contract period, selection of the right performance appraisal system and basic performance metrics critical to the success of outsourcing 8…”