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Representative POMs are described for Performance Management and Contract Compliance at each level of maturity.

1Initial

• Practice

  Best endeavours of available personnel.

  Outcomes

  • Any interaction with suppliers is ad hoc.
  • There is a lack of performance visibility which impairs the potential for identifying performance gaps and identification of improvement plans.

  Metric

  Historical Analysis: # IT supplier incidents

2Basic

• Practice

  Manage contracts based on price and delivery, with penalties imposed for non-compliance.

  Outcome

  A focus on price and delivery may impact on quality of product/service, and prevents relationships maturing.

  Metric

  % of IT suppliers that meet agreed performance objectivesHistorical analysis: # of quality incidents

• Practice

  Establish common order and fulfilment practices for key suppliers.

  Outcome

  Common order and fulfilment practices are emerging for a limited number of suppliers.

  Metric

  % of suppliers where standardized order and fulfilment practices are used

• Practice

  Agree some regular monitoring based on a few key performance indicators (KPI) e.g. availability and pricing.

  Outcomes

  • A basic governance process begins to emerge.
  • There is some visibility of availability and pricing criteria.

  Metric

  % of suppliers having governance KPIs in place% contracts where availability and pricing metrics are monitored

• Practice

  Introduce benchmarking for some IT suppliers based on internal company metrics.

  Outcome

  There is the ability to identify whether performance issues are unique to a given IT supplier or area.

  Metric

  % of contracts benchmarked against internal measures# of employees (FTEs) assigned to benchmarking

3Intermediate

• Practice

  Incentivize IT suppliers for good performance and quality against agreed SLAs.

  Outcome

  There is improved IT supplier performance and quality.

  Metric

  % of IT suppliers that meet agreed performance objectives Historical analysis: # of quality incidents, availability

• Practice

  Standardize order and fulfilment practices across most suppliers.

  Outcomes

  • Standardization facilitates similar operational practices across most suppliers.
  • Operating and switching costs are better managed.

  Metric

  % of suppliers where standardized order and fulfilment practices are used

• Practice

  Establish a defined set of monitoring KPIs e.g., performance and quality against defined SLAs agreed with the IT supplier.

  Outcomes

  • A defined governance system is established.
  • There is increased visibility of IT supplier performance and pricing against agreed standards.

  Metric

  % of suppliers with governance KPIs in place% contracts with defined SLAs

• Practice

  Conduct external benchmarking for all Tier 1 IT supplier contracts on selected price, performance and quality metrics.

  Outcomes

  • There is an improved ability to recognise the significance of IT supplier performance gaps.
  • There is increased pressure on IT suppliers to improve to meet external standards.

  Metric

  % of contracts with external benchmarking% of IT suppliers showing performance improvements

4Advanced

• Practice

  Incentivize key IT suppliers for effective agility and alignment with the organization's internal processes.

  Outcome

  There is an improved alignment between IT suppliers and internal processes; improved information flow between the IT function, the rest of the business and IT suppliers.

  Metric

  % of key suppliers aligned with internal processesHistorical analysis: # of quality incidents

• Practice

  Establish comprehensive order and fulfilment practices for all tiers of suppliers, and encourage preferred suppliers to carry out appropriate innovations.

  Outcomes

  • Comprehensive order and fulfilment practices are in place for all suppliers.
  • There is some tolerance for testing of alternative practices by preferred suppliers as a way of encouraging appropriate innovation.

  Metric

  % of suppliers where standardized order and fulfilment practices are used

• Practice

  Establish and consistently agree with supplier(s) a comprehensive set of KPIs and KPI reporting protocols and monitor rigorously.

  Outcome

  There is a comprehensive monitoring and management structure established for supplier governance.

  Metric

  % of suppliers with governance KPIs in place

• Practice

  Benchmark all Tier 1 price, performance and quality metrics against external entities as well as selected knowledge-sharing/collaboration metrics, where comparable data exists.

  Outcome

  There is an improved ability to pinpoint significant failings in communication and collaboration between parties.

  Metric

  % of contracts with defined knowledge-sharing/collaboration metrics

5Optimized

• Practice

  Incentivize key IT suppliers for innovation and collaboration with the organization and, when appropriate, with other suppliers.

  Outcome

  There is an improved level of collaboration between suppliers as well as innovative products/services.

  Metric

  Historical analysis: product/service innovations, availability of products/services via complex supply chain

• Practice

  Continually review and improve order and fulfilment practices' levels of efficiency and innovation.

  Outcome

  Order and fulfilment practices are maintained to high levels of efficiency and appropriate innovation, while minimizing switching costs for both parties.

  Metric

  Frequency of review of order fulfilment practices

• Practice

  Continually review and adapt governance KPIs to reflect current documented objectives and expectations for sourcing and supplier management.

  Outcome

  Reviews are carried out against the sourcing and supplier management objectives, the scope of services/processes being evaluated, and the sourcing decision integration and governance alignment.

  Metric

  % of suppliers with fully integrated KPIs that allow evaluation of achieved benefits, impact, and business relationship status specified in contract.

• Practice

  Manage IT suppliers on a portfolio basis as normal operational procedure.

  Outcome

  There is a marked increase in supplier contract performance levels.

  Metric

  % of products/services managed on portfolio basis