# Presentation: 062471

## Performance Criteria For Professional Services

**Service Acquisition Center of Excellence**
**Opening Ceremony**
**Mike Cameron**
**November 18, 2004**

## A Short Story

**Long ago, a traveler came upon three men working beside the road.  He asked the men “What are you doing?”**
**The first man answered “I am shaping this rock.”**
**The second man replied “I am building a wall.”**
**The third man said “I am building a cathedral.”**

## How Does This Story Relate to PBSA?

- The first man described an _activity_—shaping a rock
- The second man described a _process_—building a wall
- The third man described an _outcome_—building a cathedral

**Traditional service procurements are like the first two men—describing activities and processes.**
**Performance-Based Service Acquisitions are like the third man—*****defining a result***** *****in a way that reveals the purpose of the effort*****.**

## The Burning Issue!

- Legislation requires PBSA for service procurements—including professional services
- Many agencies—and industry—are struggling to understand how to use PBSA for professional services
- It’s not a small problem—professional services accounted for 34% of service procurements in 2003

## “You Can’t Define Performance Criteria For The Kind Of Help I Need.”

- Existing examples typically illustrate PBSA for “commercial” services
- There is little, or no, guidance widely available that addresses professional service acquisition
- Without examples or guidance, many managers don’t know how to define performance criteria for professional services

## Defining Performance—The Performance Work Statement

- The Performance Work Statement (PWS) provides
**Performance Requirements**—unambiguous statements that describe specific, measurable results that must be provided
**Performance Standards**—statements that define the acceptable quality of the delivered product or service
**Performance Measurements**—statements that describe how performance will be measured
- The PWS focuses on results and avoids describing how the work will be performed
- The Performance Work Statement must answer Two Simple Questions:
- “What problem am I trying to solve?”
- “How will I know when I’ve solved it?”

## PBSA Does Work For Professional Services!

- Professional services are fundamentally different from commercial services
- Understanding those differences is the key to writing performance criteria that are meaningful and measurable

## Commercial versus Professional Services

**Commercial services are**:
- A commodity in the marketplace
- Have adequate competition to set a market price
- Differentiated mainly by price
- Repetitive by nature
- Insensitive to context

**Professional services are**:
- Usually highly customized
- Often fill a niche in the market
- Differentiated on factors other than price
- Non-repetitive
- Determined by context

## Repetition and Context

- The key differences between commercial and professional services are *repetition* and *context*
- Repetitive services are those for which one instance of the service is fundamentally the same as any other
- Repetition allows frequent observation and determination of cause and effect
- When a service is sensitive to context, the outcome of the service will vary according to specific customer needs

## Two Examples of Repetition and Context

**Commercial Services—Facilities Maintenance**
**The results of the services—painting, repairs, and cleaning—are the same each time they are provided**
**The primary function of the facility makes little difference to the delivered service**
**Experiences gained from one project are directly applicable to another project**

**Professional Services—Strategic Planning**
**The specific form of the services will vary according to the need of the customer**
**The result of the service will differ according to the unique situation of the customer**
**Experiences gained from one project provide insight into other projects, but are not directly applicable**

## Back to the Two Questions

- “What problem am I trying to solve?”
- If you can answer this question, then you can identify the performance requirements...

- Performance requirements define the results that must be produced in order to achieve the desired solution.

## Back to the Two Questions

- “How will I know when I’ve solved it?”
- If you can answer this second question, then you can identify the performance standards...

- Performance standards define the quality levels that must be achieved, or the conditions that must be satisfied, to make the results acceptable.

## A Simple Example

- Objective Statement:  You have been tasked to create a customer service portal for your agency and need decision support to select an appropriate technology solution.
- The exercise is to
- Decide what results are necessary to accomplish your objective
- Decide what conditions will make the results acceptable

## A Simple Example—Analysis of the Problem

- Question #1:  “What problem(s) am I trying to solve?”
- Answer:  The measurable, specific results must be provided in order to satisfy the objective(s) of the program
- Complete a comparative evaluation of available commercial technology products and capabilities
- Recommend a product/capability based on relevance to the current project

## An Example—Analysis of the Problem

- Question #2:  “How will I know when I’ve solved it?”
- Answer:  When I can identify the quality of service, or the delivery conditions that must be met, to make the results acceptable
- Complete a comparative evaluation...
- The evaluation shall identify the top five products and vendors, based on market share.
- The evaluation criteria for the analysis shall include all program objectives, program constraints, and constraints, and technical requirements
- The evaluation shall provide a detailed mapping of each product/capability against the evaluation criteria

## An Example—Analysis of the Problem

- Question #2:  “How will I know when I’ve solved it?”
- Answer:  When I can identify the quality of service, or the delivery conditions that must be met, to make the results acceptable
- Recommend a solution...
- The recommendation shall provide a rationale for the selected product/capability
- The recommendation shall provide a lifecycle cost summary

## How Well Did Our example Illustrate the Discussion?

- In this sample problem, the specific services required were
- Non-repetitive...this job will only be performed once
- Context sensitive...similar services provided to a different client will produce different performance criteria
- We have avoided any discussion of *how* the work will be performed, focusing instead on *how well* the work must be accomplished
- Our performance criteria answered The Two Questions

## Tips For Implementing PBSA for Professional Services

- Decide that it *can* be done
- Translate objectives into a set of necessary results
- Identify the criteria that make the results acceptable
- Make the definition of performance criteria as simple and straightforward as possible
- Don’t be afraid of making mistakes...you will.  But you will also learn from them
- Remember, the simplest solution is usually the best one