SAP : Outcome and value based pricing engagement models

Thanks largely to the recent global recession, many organizations were forced to take a hard look at their IT spend and find more cost effective ways to invest their reduced IT budgets. Alternate IT service contracts such as value-based or outcome-based pricing became more popular providing clients with greater means for cost control and tying stringent budgets to result driven service contracts.

Tying service work to outcome allows client and service provider to focus on what's really important: the value of what is produced regardless of the resource input and how it is produced. Manufacturing companies understand very well what level of production outputs are possible using various levels of the variable input. Using this analogy from the manufacturing world, for value or outcome based contracts it shouldn't matter what levels of input (e.g. number of resources, location, skill set) the service provider is using as long as he is getting the job done and will achieve the agreed upon results.

Infosys has successfully deployed value and outcome based engagement models to its global client base.