A contract scorecard is one of the approaches that can be used to measure the performance of a contract. It provides both the parties an understanding of progress and performance. The scorecard aligns the parties on the measurement parameters and process of measurement. Frequently used measures include financial performance, KPIs and overall outcomes.
A contract scorecard also functions as an internal corporate tool for monitoring a contract's health and progress over time. The scorecard classifies and quantifies several aspects of contract performance. Contract scorecards are often managed by strategic sourcing and procurement professionals.
Contract scorecards can be helpful for various purposes — tracking and controlling performance under a contract being the primary one. As a result, contract scorecards become an integral part of the assessment procedure and the daily practice of contract management in global enterprises focused on growth.
These scorecards dissect the overall performance of the contract into a variety of categories and variables that can be measured. As a result, organizations can optimize the ROI and reduce risk using the information provided in the document.
The organization’s adoption and implementation of a contract scorecard demonstrate its capacity to manage business contracts. Accurate, data-driven contract accurate scorecards can help boost savings realization and enable global enterprises to enhance contract governance.
Developing and driving successful contracts becomes much easier with the aid of the contract scorecard. It acts as a step-by-step manual with critical guidance and examples to illustrate key steps in the actual implementation process.