Be prepared to create outcome based outsourcing agreements

It seems that outsourcing agreements with a business outcome written in are all the rage.
Gartner’s latest report on the IT services market said that suppliers selling outcome based services did a bit better than those that did not.

Having looked a bit deeper and spoken to lots of people in the industry I have found that these types of agreement are becoming increasingly common.

But there are warnings from experts such as make sure the outcome is directly linked to the IT in the contract and ensure the contract is carefully written.

See the full article I wrote here.

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I agree the industry is moving to a standard services that define “what” those services will provide without needing to describe “how” they are built, i.e. output focused. Most contracts we see are structured this way now.

These “outputs”, together with a clearly defined set of grades of service are sufficient to describe both the scope and quality/performance of the service needed.

Using appropriately tensioned pricing mechanisms it is possible to incentivise supply organisations to drive the efficiencies through standardisation.