Partnering models, the contractual set-up for cooperation with external experts and consulting firms

As a rule, the contract models between end customers and commissioned external experts (system integrators or similar) are set up in such a way that a party is directly outsmarted from the contractual situation alone or a constellation is created in the contract that forms a direct motivation for one of the parties to outsmart the other.
Corresponding common contract models are:
– Billing according to time and effort (T&M)
-> Incentive for the external partner to settle as much as possible
– Billing according to time and effort with cost ceiling (T&M with CAP)
-> Incentive for the external partner to reduce costs by means of Scope-Change-
requests; on the other hand, no incentive for the external partner to provide services beyond the cost roof, including
if the quality is not yet right.
Project work without waste
How much better would it be if the contractual agreements were drawn up in such a way that all parties involved would be permanently counteracted in the desired direction, the agreed goal and all times which do not serve the goal achievement are eliminated in the project. That would be lean – project work without waste! Such models are possible and practicable. One model that I have come to know as the most effective is a so-called shared risk cost ceiling and relatively simple to outline: The shared risk cost ceiling