Contracting for outcomes offers a good way forward, but its success depends on closer collaboration, greater openness and increased maturity in defining desired results and their measurement. The knowledge and expertise that has been built is not being shared effectively and in many cases exists outside the contracts, procurement and legal community.\r
Across industry as a whole, the use of performance or outcome based contracts remains relatively immature, even though experience in many cases is favorable. There is particular evidence that this approach to contracting results in more collaborative and longer term relationships, implying that they are capable of increased value for both parties.\r
However, success typically requires a level of investment by both parties in appropriate skills, processes and supporting tools or systems. Also, the success rates at present appear greater in contracts where payment is based on use, rather than those where payment is based on results over time.\r
This research was conducted by IACCM with preparation and results analysis undertaken by Eva Boehm, Christof Backhaus, Andreas Eggert, Tyrone Pitsis from Newcastle University Business School.\r
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