2023.11.16: Performance Measurement in Procurement (and Beyond)

Original article published on Linkedin by Dustin Lanier, CPPO

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Performance management is a discipline that focuses on how government organizations measure, analyze, and improve their operations through data-driven decision making. What’s the simplest way to begin?  Start with guiding principles that can be explained qualitatively and measured quantitatively.  In other words - articulated well, and trackable with math.

For public procurement specifically, programs should establish measures that ensure a way to balance between the tactical and strategic responsibilities.  We have found over the years that procurement organizations can be well understood through the lens of efficiency, quality and stewardship –

Efficiency: Valuing that agencies and departments who are our customers need throughput in our systems and processes.  Procurement directly reflects budgets, which in turn represent the lifeblood of government

Quality: While valuing that efficiency, making sure that we get great outcomes from procurements in regards to price, terms and considerations

Stewardship: recognizing that we are managing public dollars, not private ones, and we need to uphold the expectations of public servants while meeting the guidance of our political leadership expressed through policy and code and budgetary guidance.

There are benchmarks that we can established that show progress in each of these areas, not just for the organization overall, but also our individual employees and individual vendor partners.  But what kind, and how many?

Generally performance measure programs will look to Output and Outcome markers:

Output: These measures track raw work performed or services received. These measures track what was done, but not how well it was done.  An output is generally a feeder to an outcome.

Outcome: Outcome based metrics tell you whether you’ve delivered a particular result. They should measure something that has meaning to your organization’s customers or something of relevance to your organization that gives an indication that you are meeting your customer’s needs.

So within procurement, we assist in establishing the guiding principles, then identify the most relevant and available measures that will show both motion and results  And then we find the ways to make these measures a part of the day to day management of the organization.

And, of course, procurement is just one of the functions under government, but we feel that regardless of the sphere of government, this approach helps bring focus on traceability to efforts to drive deep improvements.

Some keys to success:

Start Small and Build a Culture of Transparency:

Begin performance management by starting small and implementing the most critical measures. Overwhelming your staff with data collection can lead to resistance. Transparency in terms of intent and the common outcome ensures everyone understands and contributes to the process.

Regularly Review and Discuss Performance Data:

Performance data shouldn't just be collected and forgotten. If data isn’t used in regular management, the process will not be respected. Evaluate the results achieved, identify areas where performance falls short, and work together to develop action strategies to achieve the program.

Avoid Making It Adversarial:

Performance management is not about punishing departments (or individuals) for underperformance but finding opportunities for continuous improvement. For these programs to be successful, we have to have a collaborative environment.

Learn from Best Practices:

Look for successful performance management practices - many have already developed measures, set targets, linked to strategic plans, benchmarked with others, and dashboards. Learning from your peers and available experts saves time and reduces false starts.

Implementing effective performance management in government is about assess the value of our actions and the use of our resources.  It is not about measuring for the sake of measuring, rather to enable data-driven decisions that benefit both the organization and the community it serves.