Introduction
An intriguing area in Supplier Relationship Management is the concept of 360 degree evaluations. In this process, a professional services firm (like legal, accounting, or consulting) provides feedback to their client as part of a structured performance management program.
The Rationale Behind 360 Degree Evaluations
As supplier evaluation and performance management mature as disciplines, clients aim to extract maximum value from their projects. They achieve this by broadening the focus to include their role in the process. In a balanced partnership, both performance and costs can be significantly impacted by suitable alterations in client processes and behaviors.
Challenges in Implementation
Initiating this process can be demanding. While many organizations are aware of the potential benefits, they also recognize the complications that could arise in this sensitive area. So, what motivates clients to undertake the entire 360° evaluation process, and how can potential issues be addressed?
Ensuring Understanding Across the Board
A fundamental component of a 360° evaluation program is to fully comprehend why it is being implemented. This understanding should permeate all levels of the client organization, as well as the services firm. It’s crucial that not only the senior executives grasp the reasons behind 360° evaluations, but this understanding should be disseminated to all participants involved. This message needs to be amplified via constant communication and training.
Setting Objectives for the Evaluation
For many organizations, the primary goal is to assess their performance as a client and explore ways to better enable their firms to function optimally. There are two key objectives to keep in mind:
- Enhancing Effectiveness: Clients need to comprehend how they can contribute to improving the outcomes of each firm’s projects, thereby enhancing the effectiveness of the relationship.
- Boosting Efficiency: Particularly relevant in the current economic climate is the need to reduce costs, waste, and friction in the relationship. This helps better allocate your stretched resources and improve the efficiency of the relationship.
The Impact of Client-Side Behaviors
Interestingly, many client-side behaviors affect both efficiency and effectiveness. This underscores the potency of a well-managed 360° evaluation program as a tool for improving supplier relationships.