At a glance: Intellect’s Outcome-Based Agreements Group represents members with a direct interest in the development of outcome-based contracts, including suppliers with experience of such contracts and lawyers concerned with the distinctive legal challenges they pose.
Chair Richard Sykes Sole Partner - Dr Richard Sykes Biography
Meeting dates
Summary of OBA launch: The launch of the Intellect paper ‘A guide to outcome-based agreements – a better way to do business’, produced by the Outcome-Based Agreements (OBAs) Working Group, was a great success. The paper sets out the case for the development of a new way of working, underwritten by new procurement approaches focused on the delivery of business outcomes. The paper proposes that relationships should no longer be based around the arm’s length supply of technology services, but on a partnership focused on the delivery of business outcomes in which both parties have a committed stake.
At the launch, the invited panellists all agreed that the time is ripe for a shift in thinking from the traditional to the innovative, from output to outcome. The panel and audience discussed many of the issues involved, and below are a few examples of issues raised. Customers are increasingly becoming aware of the fact that they are not getting what they really want.
Clients need to become ‘smarter customers’ in terms of understanding what benefits and transformation IT can deliver. Related to this is the need for both sides to understand the behaviour and expectations of each other.
It was felt that another factor required for the successful implementation of an OBA was the need for a good governance structure. The management of risk and articulated outcomes must be governed by commercially adept representatives throughout the project (pre-competition, competition, and post-contract award).
Given today’s economic pressure, the debate naturally turned to the realistic shift to OBA in a financially difficult environment. Arguably, OBAs could have a higher upfront cost than traditional output agreements, which will not go down well in times when “cuts” and “savings” are key aims. However, with a clearly articulated procurement process that has a defined outcome to it, costs can be cut upfront from what would typically be a costly procurement process.
Although OBAs has in practice existed for a while, it is still in its infancy in relation to other industries. Therefore, the way forward should include engagement with other industries and an understanding of how they moved forward.
The debate also touched upon the application of OBAs in the public sector. The Office of Government Commerce initiated a project, ‘A Formula for Success’ which share many similar underlying attributes.
Crucially, OBAs are about changing the behaviour and practices of people and initiating new thinking. A revised approach can generate better outcomes for businesses, public sector bodies and ultimately end users. The next steps in taking forward this work will be discussed in a post-launch review on Thursday 4 June 2009.
The Group also works closely with other Groups at Intellect, particularly the Contracting Best Practice Working Group, the Legal Affairs Group, the Outsourcing and Offshore Group, and the Professionalism Workstream.
Get in touch
