IACCM recently completed research with Newcastle University Business School and the University of Paderborn, exploring industry experience with performance or outcome-based contracts. Complete findings will be published shortly, but the results indicate that 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 delivering increased value for both parties. However, success typically requires a level of investment by both parties in appropriate skills, processes and supporting tools or systems. Also, the level of adoption at present appears greater in contracts where payment is based on use, rather than those where payment is based on results over time.
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