Mar 11 2008
Guidelines for Facilitating a Quarterly Business Review (QBR)
Within the Vendor Management discipline of a Global Operations organization, the process of a Quarterly Business Review (QBR) should be established to achieve high-quality performance and ensure a healthy, successful partnership with your vendor(s). While some people use the QBR as an excuse for a boondoggle (which isn’t always a bad thing), I feel that they are extremely valuable for managing your business; I wanted to share my viewpoints and guidelines for facilitating successful meetings and enriching partnerships.
The QBR process should be established immediately upon execution of a sourcing relationship. It acts as a forum for all parties to establish clear understanding of business goals, objectives, expectations and future direction for the business. This meeting should be viewed as an important tool to discuss and work through change activities for the benefit of performance improvement.
In my opinion, the QBR meeting should be setup in a similar fashion to what is outlined below:
- Established Agenda and Participants
- Develop Decks for Both Your Company and Vendor(s)
- Strengths, Weaknesses, Opportunities, Threats (SWOT) Assessment
- Performance Improvement Planning
- Project Updates/Proposals
- System Enhancement(s)
- Corporate Initiatives
- Forward Planning and Strategy
- Appendix of Agreed to Performance Data
- Action Log for Meeting Follow-up(s)
When preparing for a QBR, I also suggest following these tips:
- Set the date for the meeting no later than five weeks in advance
- Set the agenda and participants in advance
- Share the decks prior to the meeting to ensure discussion points can draw actionable items by each company – remember, this is a collaborative process for the greater good.
- Do the QBR face-to-face (this can be challenging with cost center budgets)
- Personally, I like to have vendor(s) visit us
- Document and share all actions and discussion points that evolved from the meeting
Manage the actions to ensure improvement within the organization
Enrich the relationship with some extracurricular activity
If you would like to read a similar article on managing a QBR, you can check out a site I like to frequent - 360VendorManagement. This author needs to remain anonymous, but he is a tenured professional and I respect his ideas and thoughts. Great minds think alike!
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I think they are a very effective tool and most QBRs I have attend tend to be very beneficial for both partners. It is an excellent forum for performance review, addressing governance issues and creating connects between the orgs. One key are that gets missed in some QBRs in the “strategic connect” that needs to be established. A best practice should be for the customer to open up forward looking strategy so that the partner senior management can fully align its plans and investments to support the customers business. Some QBRs that miss out this element, tend to become more operational and tactical and miss out on this opportunity for strategic alignment of objectives for the two organizations.
The QBR is useful to take a strategic look at your endeavor during a natural seasonal period. The QBR is not the best method for managing program improvement. You should have a PRM (Performance Review Meeting) much more frequently. You should use the strategic and tactical suggestions that come from the QBR and implement them and review them during a PRM. If you are only reviewing performance on a quarter by quarter basis, you are waiting entirely too long between review periods. I would argue, depending on the application you are managing, that this occur weekly or bi-weekly and only key performance indices are discussed. If properly linked, then any discussions you have will link to your quarterly review.
There is a point of diminishing returns. A daily or weekly review for example takes more administrative time to create and facilitate than you could reap. I have found it to be a valuable methodology of managing scope and expectation creep. The people who are usually most resistant are really the most concerned about what changes they will need to make. The reality is it becomes a pay me now or pay me later exercise. One way or another the items will be addressed.
A quarterly business review should be used as a “touchpoint” between the vendor and the client. If you are waiting to get any detailed information from the review, it is not a good idea. I always used it as an opportunity for me to “Kick the tires and light the fires” at my offshore partners, spending more time on the floor and doing informal sessions than I did in the actual review. We also saw it as an alternating meetings, our place and then their place. That gave our vendors the opportunity to meet with more of our internal management team, gaining both insight and support for their tasks.
Best practices are first to make sure that you have no surprises at the QBR by doing interim reviews. We did a monthly summary sheet that addressed the “reds and yellows”, explaining the plan to recover or maintain as necessary. The QBR was limited to the Summary sheet and then a deeper dive on key areas including process improvement activities, future thinking plans. etc.
Having been on both sides of the outsourcing relationship, I always felt QBRs were less effective than MBRs. A monthly business review may be more time consuming from a preperation and meeting standpoint but the results discussed and actions needed are much more immediate. I would often find in QBRs that we were discussing issues that were 2-3 months old. By that point, those fires were long extinguished and new, more immediate fires needed to be addressed. By switching to an MBR model, we were able to focus on results from the immediately completed month and found our discussion to be much more relevant and topical. In addition, we conducted two semi-annual reviews to discuss long-term planning etc.
Isn’t it true that QBRs are more high-level view of strategic planning and in getting ESI to understand both supplier and customer requirements and abilities, improve cost reductions, product manufacturability, aligning both supplier and customer strategic business plans and goals, and more? Whereas, MBR is more toward the tactical aspect of the operational side of business to define and resolve quality problems and/or other attributes? Your comments in regards to my statement above is greatly appreciated.
I don’t feel there is a tremendous difference in QBRs or MBRs. I believe this is simply the agreed to frequency that client/vendor groups want to meet to discuss both operational and strategic items. At teh end of the day, I have never had an operational/tactical meeting without uncovering issues that drive strategic discussion.
For me, I would always incorporate SWOT and ensure that relations and expectations are well understood so issues are addressed, strategy is clear and the business continues to grow a healthy relationship that adds value to everyone.