Risks and rewards of procuring outcomes

An outcomes-based approach quite simply focusses all energy and activity on the final outcome instead of the tasks and busy work which often fills our days. For digital transformation projects, outcomes are achieved by mastering the critical balance between flexibility and accountability – sharpening the focus on the business purpose while increasing individual accountability.

Our advice to achieve outcomes-focussed projects

Embrace change

Digital transformation isn’t a linear journey; it’s an iterative one. Significant effort is required to understand the relationships between the many moving parts. But the landscape constantly evolves - technologies advance, regulations shift, threat landscapes change and so our priorities must also respond. Our ability to rapidly adapt is what ensures relevance and effectiveness.

Transformation projects that force strict milestone definition too early in the process risk delivering the ‘wrong’ solution or delivering only a fraction of its potential. Blocking the iterative process under the guise of ‘risk management’ and ‘probity’ directly contributes to cost over-runs and failed outcomes.

Increase accountability

But iteration and flexibility doesn’t mean chaos. When you contract for outcomes, all parties are accountable. Budgets align with purpose. Risks may be shared between the client and the various suppliers. Milestones and deliverables are linked to business goals. Increased accountability means there are more eyes to monitor progress and performance because we all have ‘skin in the game’. The risk of losing direction diminishes. Accountability ensures that every effort serves the greater purpose.

Think strategically

Contracting for outcomes also forces the organisation to think strategically – developing an agreed vision, strategy, and roadmap for achieving your larger purpose. This reduces the chance of ‘pet’ projects running endlessly without direction and helps consolidate budgets and resources behind the activities which matter. Digital transformation is not an unplanned sprint; it’s a sustained marathon.

So why isn’t everyone doing it?

While the ‘what’ of a transformation project may be defined at project kick-off, the detailed ‘how’ and ‘when’ is likely to be more iterative. Outcomes-focussed projects require iterative design and delivery cycles and ‘living’ documentation processes.

Often, client and supplier teams are blended - teams work collaboratively and risks, responsibilities, and rewards may be shared. This is not a subservient master-vendor relationship; this is a genuine partnership of equals.

This level of flexibility may challenge traditional waterfall project management philosophy and strictly defined procurement processes, but for those organisations willing to make the change, the benefits are significant. Considering the rapid pace of new technologies and the scale of the transformations required in organisations today, focussing on outcomes is the only sensible way to tackle transformation.

As the lead of a major transformation, your career could be defined by the success of your next project. However, with a failure rate exceeding 70%, the stakes are high. Beat the odds and increase your chances of success by focussing on outcomes.