Contracting outsourced services with collaborative key performance indicators
| Autor: | Finn Wynstra, Henk Akkermans, Christopher A. Voss, Willem van Oppen |
|---|---|
| Přispěvatelé: | Department of Management, Research Group: Information & Supply Chain Management, Department of Technology and Operations Management, Purchasing & Supply Management |
| Rok vydání: | 2019 |
| Předmět: |
HD
key performance indicators (KPIs) performance-based contracts Process management Performance management Performance Strategy and Management media_common.quotation_subject Telecommunications service Management Science and Operations Research Industrial and Manufacturing Engineering CPBJ Outsourcing design science research service procurement 0502 economics and business performance management Performance measurement media_common Service (business) business.industry 05 social sciences collaboration Interdependence outsourcing 050211 marketing Performance indicator Business Design science research 050203 business & management |
| Zdroj: | Journal of Operations Management, 65(1), 22-47. Elsevier Journal of Operations Management, 65(1), 22-47. John Wiley & Sons Inc. |
| ISSN: | 1873-1317 0272-6963 |
| DOI: | 10.1002/joom.1002 |
| Popis: | While service outsourcing may benefit from the application of performance-based contracts (PBCs), the implementation of such contracts is usually challenging. Service performance is often not only dependent on supplier effort but also on the behavior of the buying firm. Existing research on performance-based contracting provides very limited understanding on how this challenge may be overcome. This article describes a design science research project that develops a novel approach to buyer–supplier contracting, using collaborative key performance indicators (KPIs). Collaborative KPIs evaluate and reward not only the supplier contribution to customer performance but also the customer's behavior to enable this. In this way, performance-based contracting can also be applied to settings where supplier and customer activities are interdependent,while traditional contracting theories suggest that output controls are not effective under such conditions. In the collaborative KPI contracting process, indicators measure both supplier and customer (buying firm) performance and promote collaboration by being defined through a collaborative process and by focusing on end-of-process indicators.The article discusses the original case setting of a telecommunication service provider experiencing critical problems in outsourcing IT services. The initial intervention implementing this contracting approach produced substantial improvements, both in performance and in the relationship between buyer and supplier. Subsequently, the approach was tested and evaluated in two other settings, resulting in a set of actionable propositions on the efficacy of collaborative KPI contracting. Our study demonstrates how defining, monitoring, and incentivizing the performance of specific processes at the buying firm can help alleviate the limitations of traditional performance-based contracting when the supplier's liability for service performance is difficult to verify. |
| Databáze: | OpenAIRE |
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