10 Elements

1
We believe that our business model will achieve:* This field is required.10 Elements | Self-Assessment
Lowest cost.
Improved quality and lower cost through improved performance.
Outcomes that support strategic goals and increased value to both parties.
2
The Economic Model for our Agreement can best be depicted as:* This field is required.10 Elements | Self-Assessment
Transactional and focused on paying for activities or tasks (per unit, per hour, per shipment, per mile, per person)
Performance-based and focused on paying for performance (e.g., economics tied to performance metrics such as Service Level Agreements)
Outcome-based and focused on how we will achieve the mutually agreed Desired Outcomes with our business partner
3
Our relationship with the other party is based on:* This field is required.10 Elements | Self-Assessment
What is best for me, even if that is not the best for the other party.
Achieving the best compromise on what I want so that the other party is not impacted severely.
Doing what is best for the relationship and all parties involved.
4
Our view on contracts is:* This field is required.10 Elements | Self-Assessment
Contracts are the controlling document, to be changed only when up for renewal. We rarely pull the contract out of the drawer.
Contracts control the deal points of the relationship and we use change orders to address scope changes when needed. The contract may contain some tables or addendums (such as volumes, base price, etc.) that are updated on a periodic schedule.
Contracts are a flexible framework. We actively use our contract as a Playbook to keep us in continual alignment with our partner as business needs evolve.
5
Sourcing Business Model | Calc
6
My conduct toward the other party during contract negotiations can be described as:* This field is required.10 Elements | Self-Assessment
Adversarial, the other party is an adversary to be beaten.
Concessionary, the other party is a subordinate to negotiate with.
Partnering, the other party is an equal partner that brings value to the relationship.
7
In our relationship we have:* This field is required.10 Elements | Self-Assessment
Not expressed nor discussed our intent for the relationship with the other party outside of the specific deal points (scope, metrics, price)
Agreed on an informal shared vision or charter, but is not documented or referenced in the actual contract.
Agreed on a formal shared vision, and documented it in the actual contract.
8
Which statement most accurately describes the expectations for how the parties will behave in the relationship?* This field is required.10 Elements | Self-Assessment
We have not discussed behaviors formally.
We have openly discussed the need for a good relationship. We agree that transparency and trust are critical success factors but have not gone the next step to document any Guiding Principles or expected behaviors into the actual contract.
We have embraced the need to formally embed Guiding Principles into our contract and consider our contract a formal relational contract.
9
Shared Vision Statement / Statement of Intent | Calc
10
Our approach toward documenting the scope of work for our relationship is:* This field is required.10 Elements | Self-Assessment
To define how the work is to be performed because we are the experts in our business.
To specify what we want and how we want the work completed, but we allow the service provider to use their processes to achieve the contract goals.
To specify what we want and move the responsibility of determining how and what gets delivered to the service provider.
11
Our agreement includes:* This field is required.10 Elements | Self-Assessment
A company developed Statement of Work (SOW) that includes extensive detail of how the work is to be performed.
A Statement of Work (SOW) that was jointly developed, including higher level tasks and requirements. The service provider had some input into how the work is to be performed but the SOW is the controlling document for the agreement.
A Statement of Objectives (SOO) that specifies Desired Outcomes in terms of high-level objectives with minimal prescriptive direction on how the work is to be performed. The service provider has significant flexibility regarding "how" to achieve the outcomes, and is responsible for creating and managing the Performance Work Statement (PWS) that documents work at the detailed level.
12
When there is scope creep due to evolving business needs:* This field is required.10 Elements | Self-Assessment
We find ourselves in constant disagreement and need frequent approvals to complete all activities.
We are fairly flexible and only need approvals for non-routine changes
We have written a very flexible contract which allows us to pivot quickly.
13
Our mindset for managing the workscope covered under the agreement is:* This field is required.10 Elements | Self-Assessment
Focus on the processes specified in the agreement only.
Optimize our internal processes that we can control even if these processes are outside the agreement.
Work together to optimize the end-to-end process, versus internal process, with a formal management strategy that focuses on maximum integration and visibility.
14
Our agreement takes the following approach toward workload allocation and resources:* This field is required.10 Elements | Self-Assessment
It specifies the resources, such as labor requirements, tools, processes, and systems.
It emphasizes the service levels and outputs, not the resources, but may prescribe boundary conditions that limit service provider resource and workload flexibility.
It defines the outcomes that are aligned with performance, service level and output goals; resources are not defined.
15
Statement of Objectives / Performance Work Statement | Calc
16
Our agreement is focused on:* This field is required.10 Elements | Self-Assessment
Maintaining the contractual level of performance as defined by the service level agreement (SLA).
Maintaining or improving on the contractual level performance as defined by the service level agreement and through industry benchmarking.
The achievement of a few top-level Desired Outcomes that are aligned to achieving strategic and end-customer requirements.
17
In establishing the success measures for our agreement, we:* This field is required.10 Elements | Self-Assessment
Spent little to no time understanding how success in the relationship is defined.
Spent time throughout the sales/negotiations and contracting process to establish definitions for how relationship success will be measured.
Jointly defined how success to the Desired Outcomes is measured.
18
The metrics in our relationship include the following dimensions:* This field is required.10 Elements | Self-Assessment
Strictly measure operational performance
Measure both operational and relational performance (e.g., how healthy is the relationship in addition to how well we are achieving our goals)
Measures three dimensions including operational performance, relational performance and transformational performance (how well the parties are collaborating to develop innovation to bring future value)
19
In our agreement:* This field is required.10 Elements | Self-Assessment
The service provider is not contractually responsible for achieving performance metrics.
The service provider must operate within a defined performance range and is contractually obligated to maintain performance.
The service provider is contractually rewarded for achieving the Desired Outcomes; it may also be required to meet a specific performance level as defined by the agreement.
20
The metrics in our agreement can be described as:* This field is required.10 Elements | Self-Assessment
Focused on measuring tasks or activities.
Service Level Agreements aligned to the scope of the service provider's work; metrics are not tracked at the boundary spanning business process level.
Boundary spanning Desired Outcomes (ideally focused on achieving end customer requirements). The outcome metrics and are tracked at the process level to best understand the performance across the entire process.
21
Performance is tied to service provider compensation:* This field is required.10 Elements | Self-Assessment
In the form of penalties for not meeting contractual performance levels. Penalties may be financial or may result in contract termination.
By balanced incentives and penalties for performance. Typically, these are financial based on a pre-agreed table.
By linking the profits of the service provider to success in delivering performance outcomes. Rewards may also include non-financial incentives such as contract extensions.
22
Performance Measures | Calc
23
What is your metrics reporting pattern?* This field is required.10 Elements | Self-Assessment
Typical formal metrics reviews are quarterly with working level reviews monthly.
Metrics are reported on a regular basis with formal metrics reviews monthly and working level reviews weekly.
Metrics and service provider outcome evaluations are reported on a regular basis at frequent intervals. Typical formal metrics report reviews are monthly with working level reviews weekly or daily for critical operational metrics.
24
How is performance data used by your organization?* This field is required.10 Elements | Self-Assessment
Performance reports are often used only by a few individuals who monitor performance to the contract.
Performance reports are posted and communicated companywide. However, reports are used primarily by key decision makers and reports are seen and not used by the majority of employees.
Performance reports are used as part of regular review meetings across all functions/all levels linking performance to strategy to ensure all parties are marching to the beat of one drum.
25
The goal of performance management in our agreement is to:* This field is required.10 Elements | Self-Assessment
Track service provider compliance to the contract.
Drive process improvement and to support service provider performance incentive/penalty programs.
Track progress against Desired Outcomes and to support service provider improvement and incentive programs.
26
Performance Management | Calc
27
Which description best fits how you approach pricing in your agreement?* This field is required.10 Elements | Self-Assessment
We use transactional prices (e.g., cost per hour, per mile, per shipment, per call, per person, per unit). Pricing can be cost plus or fixed fee - but it always is a "price per" mentality
We use a pricing model primarily focused on paying for transactions, but we also include incentives and/or penalties which are based on performance in an effort to drive preferred behaviors.
We use a pricing model with incentives (no penalties) designed to optimize the total cost of ownership for both parties. A win for one partner is a win for the other partner.
28
The primary focus of the pricing model is:* This field is required.10 Elements | Self-Assessment
Focus on reducing price per transaction
Focus on reducing transaction costs to drive overall costs down.
Focus on reducing non-value-added transactions and driving value added continuous improvement and innovation.
29
The pricing model incorporates risk management by:* This field is required.10 Elements | Self-Assessment
Treating risk as a zero-sum game where the goal is to shift risk to the other party.
Re-balancing risk to share across the company and service provider. Focus of the discussion is around pricing risk.
Balancing of risk with a comprehensive mitigation strategy across all parties. Focus is on reducing total program risk.
30
Which statement best describes your ability to review pricing in the agreement?* This field is required.10 Elements | Self-Assessment
The agreement has no provision for pricing and scope review during the life of the agreement.
There is some flexibility in pricing as the scope and/or risk changes.
The agreement includes regular review of pricing, scope and risk/reward. We view balancing the economics of the relationship as essential for keeping the parties in continual alignment of interests.
31
Which statement best describes your agreements related to incentives?* This field is required.10 Elements | Self-Assessment
There are no incentives in the contract.
There are some gain-sharing provisions for cost savings, but the pricing model does not inherently drive overall cost reductions by eliminating non-value-added transactions.
The agreement includes incentives to eliminate non-value-added processes. The agreement also includes opportunities for the parties to share in improvements and innovations that add value to the agreement.
32
How well are incentives (if any) aligned with what the parties want from the agreement?* This field is required.10 Elements | Self-Assessment
We do not have incentives in our agreement.
Incentives and/or penalties are included that are intended to promote performance targets; however, incentives are focused on achieving performance at the activity or transactional level.
Incentives are tightly aligned, promoting behaviors and outcomes that benefit both the company and service provider. Incentives are designed to drive the Desired Outcomes.
33
What is the contract length?* This field is required.10 Elements | Self-Assessment
The contract is short term, one to three years at a time, with no commitment to additional contract award.
The contract is medium term, three to five years, with options to extend. The contract aligns with the investment commitment made by the service provider in expectation of earning back investment costs.
The contract is longer term, five or more years, with options to extend. To encourage long term investment, the contract length is commensurate with level of investment needed and can be extended if new investments are made by one of the parties.
34
Pricing Model with Incentives | Calc
35
How would you describe the communication structure of the agreement?* This field is required.10 Elements | Self-Assessment
Hierarchical communication with individuals at lower levels mostly communicating upwards and through a designated program/account manager or SPOC (single point of contact)
Some direct communication with my counterpart but most communications go through the program manager to account manager.
Direct functional communication with counterparts, and regular updates to managers using peer-to-peer "2-in-a-Box"/"reverse bowtie" mapping.
36
Which statement best describes the governance framework in your agreement?* This field is required.10 Elements | Self-Assessment
A formal governance framework is not included in the agreement; governance is informal through meetings and reviews.
The governance team is named in the agreement and typically meets as part of a formal Quarterly Business Review.
A tiered governance structure (operational, management and strategic groups) is documented in the agreement. Group members, requirements and meeting frequencies are contractual obligations for the parties to effectively manage the business with a regular review cadence.
37
We believe the primary role of governance is to:* This field is required.10 Elements | Self-Assessment
Enforce the contract.
Provide oversight for performance and contract changes.
To provide insight and strategic direction.
38
The focus of governance in the agreement is to:* This field is required.10 Elements | Self-Assessment
Monitor performance to contract levels.
Monitor performance levels and continuous improvement targets.
Monitor performance to outcomes, drive innovation and improvement and set strategic direction.
39
Our approach to managing Key Personnel in the agreement is:* This field is required.10 Elements | Self-Assessment
Is not defined or is one-sided (e.g., only listing the service provider's key contact positions and not the buying company's key positions)
Documenting the key personnel from both parties as well as important transitional resources in the actual agreement.
To not only document the key personnel, but also include a continuity of resource plan that identifies key resources, and specifies a joint process for replacing key positions and for resolving mismatches in key personnel when they arise.
40
When it comes to relationship management, the agreement:* This field is required.10 Elements | Self-Assessment
Does not address relationship dynamics.
Addresses the need for a good working relationship between the parties, but does not monitor it.
Addresses the need to actively improve the working relationship and the level of trust between the parties and requires that the parties measure the relationship and its impact on meeting the Desired Outcomes.
41
Relationship Management | Calc
42
What is the agreement change process?* This field is required.10 Elements | Self-Assessment
Change process is not documented or clearly defined.
Change process is documented, but limited to contract changes.
Change process is well defined, and is designed to be flexible, allowing for quick review, approval and implementation of process improvements.
43
Which statement best describes the change management process?* This field is required.10 Elements | Self-Assessment
There is no documented review and approval process; the company controls the change management process.
There is a clearly defined review and approval process; key stakeholders and change management owners from the company and service provider have been identified.
There is a formal change process with assessment of impact to the services provided, including clearly documented joint responsibilities and a documented change escalation process.
44
How does the agreement address process improvement?* This field is required.10 Elements | Self-Assessment
There is little emphasis on process improvement.
Service provider is afforded flexibility to plan and implement continuous process improvement, but the business arrangement does not provide an incentive to do so.
The company and service provider are accountable for implementing process improvements that drive total cost of ownership reductions, and benefit both parties. The improvement plan is supported by the investment plan.
45
The agreement includes:* This field is required.10 Elements | Self-Assessment
No formal continuous improvement program.
A formal continuous improvement program (e.g., Six Sigma, Lean, etc.) that is aimed at making improvements; however, improvements are not directly focused on the top-level Desired Outcomes.
A formal continuous improvement program in place (e.g., Six Sigma, Lean, etc.) that effectively drive improvements against the top-level Desired Outcomes.
46
The primary goal of change management in our agreement is:* This field is required.10 Elements | Self-Assessment
To manage changes to the contract.
To manage the continuous improvement process as well as any changes in the contract.
To manage improvement and innovation, and to modify the contract to support improvements to availability, reliability, total cost, revenue generation, employee or customer satisfaction, or even asset or investment targets.
47
The agreement addresses transition planning by:* This field is required.10 Elements | Self-Assessment
Documenting the key elements of the transition plan.
Documenting a well-defined transition plan with key milestones and planned review schedule.
Documenting a well-defined transition plan with key milestones, key metrics and planned review schedule with clear escalation paths and ownership by both parties.
48
Transformation Management | Calc
49
What are the exit terms in your agreement?* This field is required.10 Elements | Self-Assessment
Termination for convenience and for cause.
Termination for convenience and for cause with provisions to reimburse any unrecovered and documented investments by the service provider.
Termination for cause as well as justified business reasons. Agreement includes a documented exit plan.
50
The goal of the exit plan is to:* This field is required.10 Elements | Self-Assessment
To address liability issues at termination.
To address liability issues and establish a notice period and financial obligations at termination.
To facilitate a smooth and efficient transition of services with minimum disruption as well as establishing an orderly process to unwind the business relationship.
51
Exit Management | Calc
52
How are special concerns such as unique company policies handled in your agreement?* This field is required.10 Elements | Self-Assessment
Special concerns and requirements have not been addressed in the agreement.
Special concerns and requirements are included in the agreement have not been vetted for negative impact.
Only special concerns and requirements are included in the agreement that have been fully reviewed and vetted by both parties.
53
How does the agreement address managing external regulations?* This field is required.10 Elements | Self-Assessment
There is no clarity for who will monitor changes to external regulations.
The agreement defines who is responsible to monitor for changes to regulations, but there is no clear process for changes that impact the agreement.
The agreement defines who is responsible to monitor for changes to regulations; the change process is used to review the impacts to the terms of agreement.
54
Special Concerns and External Requirements | Calc
55
First name only:* This field is required.
56
Last name only:* This field is required.
57
Your role:
Buyer
Service provider
Other
58
Agreement name:
59
Email to receive your customized report:* This field is required.
johndoe@com
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