Beyond the SLA: Who owns the business outcome?

Technology contracts are increasingly being judged by the business value they create, not only by the people, licences or infrastructure delivered. That is putting outcome-based contracts on the agenda for customers and technology partners. But the model works only when both sides agree upfront on what success means, how it will be measured and where accountability begins and ends.

Murtuza Kachwala, Managing Director, Protiviti Member Firm for India, explains why outcome-led models need clear metrics, transparent measurement and shared responsibility.

Start with the business problem

The starting point should be the customer's business problem rather than the technology or contract. Partners and customers need to establish a baseline, select relevant business metrics and agree on how improvement will be measured.

For productivity, cycle time, throughput, capacity released, and cost per transaction can be more useful than simply counting automated processes. Customer experience can be measured through faster resolution, improved retention, higher conversion or customer satisfaction.

“Both parties need to agree on what defines success before discussing commercial terms.”

The measurement period, data sources, ownership and factors outside the partner's control should also be clearly defined. A common dashboard can help both sides maintain a shared view of value delivered.

Shared risk needs clear boundaries

Taking accountability for business outcomes can expose partners to factors they cannot control. Customer behaviour, market conditions, internal processes, data quality, management decisions and adoption can all influence results.

Contracts therefore need to distinguish between outcomes directly influenced by the partner and those requiring shared accountability.

“The main risk is being held accountable for outcomes outside the service provider's control.”

Kachwala recommends clear baselines, customer dependencies, data definitions, decision rights, governance mechanisms and exceptions for major changes in the operating environment. Commercial models can also combine a predictable base component with a variable component linked to outcomes.

ROI must go beyond cost savings

Digital transformation ROI should cover financial, operational and risk indicators. Some benefits, such as lower processing costs, reduced downtime, faster collections and increased revenue, are directly measurable.

Others require credible proxies. Productivity can be tracked through cycle-time reduction or increased transaction volumes using the same capacity. Resilience can be measured through avoided downtime, faster recovery or maintained service continuity. Risk reduction can be assessed through fewer incidents, reduced exposure or stronger controls.

“While not every benefit must be quantified immediately, each significant benefit should have a credible measurement method.”

SIs and MSPs need to become business partners

For system integrators and managed service providers, the shift requires more than technical expertise. Industry knowledge, business consulting, data and analytics, transformation capabilities and stronger commercial and risk management skills become important.

Providers also need to engage business and functional leaders, because outcomes such as revenue growth, productivity, customer retention and resilience extend beyond IT.

“Providers who link technology investments to clear business metrics, measure them transparently, and remain accountable will succeed.”

Traditional SLAs still matter for availability, response times, resolution times and service quality. But they should form the foundation, with a smaller set of shared business outcomes sitting alongside them.

The market is gradually moving towards outcome-based pricing, but the bigger change will come when procurement evaluates partners not only on deliverables and price, but also on the business problems they solve and the measurable value they provide.

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