What is an outcome-based service contract?
In addition to the best field service management, it’s important that you have the right service provider to help make sure your assets are always in excellent operating condition. Let’s look at how an outcome-based service contract, also known as a performance-based or results-based contract, can help.
In an outcome-based service contract, the customer and service provider mutually agree on specific measurable and attainable results. It’s a partnership. Customers get the outcomes they want. Service providers know exactly what is expected of them. They’re also compensated based on the results delivered rather than just getting paid for the services delivered.
The success of an outcome-based service contract relies on a america phone number list complete understanding of the customer’s needs, effective communication between parties, and a commitment to collaboration. Legal and compliance considerations must be taken into account when writing these contracts to ensure they’re enforceable and aligned with applicable regulations.
Here are five important elements to include in an outcome-based service contract:
Clearly defined results: First things first: agree on what success looks like for everyone. Then specify the desired outcomes in clear and measurable terms. This could include meeting KPIs, service levels, or specific goals (i.e., extending asset life by 1 year) the service provider is expected to deliver on.