3 key steps in any win-win intelligent automation outcome-based service contract

With an Intelligent Automation outcome-based service delivery model, you only pay when a service provider delivers the business outcomes they promised.

If you are not using an outcome-based business model, then you are very likely wasting precious company time and money.

Outcome-based contracts reset the balance between technology service providers and businesses, thus creating mutually beneficial incentives.

They are growing in popularity with both technology service vendors and their clients.

“Increasingly, customers are expecting firms to replace the traditional ‘time and material’ based engagements with more result oriented, outcome-based engagements[1]” Forbes?

When businesses and clients create a win-win relationship, technology service providers bring:

·??????much-needed innovation and fresh thinking to their clients.?

·??????reduced ongoing costs of technology service delivery to their clients.

·??????the opportunity to achieve greater margins, through outcome-based or gain share agreements, which further incentivizes them to innovate and drive better outcomes for their clients.

And from a client’s perspective, they benefit from:

·??????fresh thinking, new ways of working and thinking.

·??????higher-quality results that focus specifically on what they are looking to achieve from their business relationship without the risk of failure.

·??????the freedom to focus on core strategic activities.

“Customers have always wanted solutions to problems, not products or services, although they may not have believed it was possible. The preference is for end results. As Harvard Business School Professor Theodore Levitt once wrote: “People don’t want a quarter-inch drill. They want a quarter-inch hole.” Boston Consulting Group (BCG[2])

Win-win relationships are relatively simple for service providers and businesses to implement but only if three fundamental steps are followed:

1.????Quantify the outcomes and benefits you both wish to achieve.??

If this is not something your business has the expertise in or has the time to complete, then hire an experienced outcome-based contract provider to do this for you.???An experienced service provider can help your business baseline the current status quo and identify achievable business benefits e.g., existing costs, achievable savings, potential new sales, etc.

2.????Develop a detailed delivery action plan that outlines the benefits and outcomes to be achieved and the delivery milestones.

It is key to articulate when the business benefits will be realized to keep everyone focused on delivering business benefits and outcomes by each fixed delivery milestone date.

3.????Give the service provider the freedom and scope to investigate and innovate.

If a business restricts the service provider's range of options, then it will not benefit from the array of innovative ideas the provider can offer. Trust, freedom, regular monitoring, mutual respect, and responsibility will lead to quantifiable progress and success against every contracted business outcome.?This is not to suggest a business should give a service provider carte blanche to its network and thereby potentially, increase your business's risk exposure.?Rather a client company should validate every business case and solution the service provider proposes with full UAT in place before solutions go into live production environments.?

By applying these steps a client can manage risk whilst a service provider has the freedom in which to help their client innovate in order to help them deliver exceptional business results.

With a collaborative working relationship in place, a win-win partnership will flourish.