What an outcome actually is
An outcome is a measurable change in a business process: turnaround time, exception volume, manual review hours, reporting cycle length. It is not a deliverable list, and it is not a model accuracy target on a static dataset.
What must be written down
Ambiguity is the enemy of outcome pricing. Both parties should agree the baseline measurement, the measurement window, the data source used to measure, and the dependencies the client owns.
- Baseline captured before work starts, from a system both sides trust.
- Explicit list of client-side dependencies and their dates.
- Agreed treatment for scope that emerges mid-flight.
Where it does not fit
Pure research, early discovery, and unbounded platform migrations are poor candidates. Use a fixed discovery phase to establish the baseline, then move to outcome terms once the target is knowable.
The incentive effect
When payment tracks the outcome, delivery teams stop optimising for headcount and start removing steps. Simpler architectures, fewer handoffs, and earlier production deployment all follow naturally.
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