How to Evaluate Vendor Performance

McDonald's supplier of the year award offers tips for getting the most from your technology vendors

Mon, June 02, 2008

CIOMcDonald's gave its first technology supplier of the year award to a small point-of-sale vendor that started as a defense contractor. ParTech Inc., in New Hartford, N.Y., beat out more than 100 other software and hardware suppliers, including IBM, Microsoft and Oracle.

A look at McDonald's award criteria shows a company clear on what it wants from key suppliers and one that knows how to measure it.

Any technology vendor doing business with McDonald's must please two constituents, says David Grooms, CIO of McDonald's North America. Grooms says a vendor has to satisfy him by, for example, living up to service level agreements. (Here are tips on how to craft a good SLA.) But just as important are the 85 percent of McDonald's 13,700 restaurants in the U.S. that are owned by franchisees, whom McDonald's the corporation considers its customers.

A tech vendor must "be accessible at an individual restaurant level" across the country, Grooms says. Not just to Grooms in his office in Oak Brook, Ill. "It's one thing to make the CIO happy and it's another to make customers happy."

To figure out which technology supplier was best, Grooms designated four or five members of the technology department to lead the selection process. They defined broad areas to assess, including customer satisfaction, product and vendor reliability, and how well the vendor helped McDonald's achieve business goals. The internal mantra for McDonald's IT right now is "Simplify, modernize, standardize," he says.

The team started by gathering data already available: service level agreement reports and vendor scorecards which McDonald's has been keeping on its technology suppliers as part of its vendor management process. Using those criteria, the team narrowed the list to fewer than five contenders, he says.

Then McDonald's brought the vendor evaluation project to its store technology board, which is a group of restaurant owner-operators that meets three or four times per year to evaluate new technologies and to keep tabs on how existing technology is working for franchisees across the country. The board discussed what they've been hearing in the field about those vendors on the short list. A vote "overwhelmingly" favored ParTech, Grooms says.

McDonald's Criteria for the Best IT Vendor

The data, plus experiential feedback from the store technology board and items such as letters written by other owner-operators made ParTech the clear choice, Grooms says. The key award criteria were the following:

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