How To Transform Your Outcomes-Based Contract From Burden To Benefit

By Chad Barbour, Salesforce

The ways outcomes-based contracts are created, the metrics by which outcomes are judged, and the means of gathering and analyzing data are continually evolving. An outcome-driven contract ensures a product or service will operate at a given quality level for a set amount of time, but how the result is delivered may not be explicitly stated.

Outcomes-based contracts open opportunities for service providers to have more flexibility in how they deliver service. Accordingly, field service organizations must be aware of the numerous considerations involved in crafting such a contract. Each industry has its stipulations attached to outcomes, and each organization needs to create contractual guardrails to protect itself against unnecessary risk. Considerations may include performance thresholds the organization wishes to set, constraints that may impede the company’s ability to fulfill contract terms, and who bears responsibility for each outcome.