Interview by Evert Smit
What were the initial motivations for switching to an outcome-based system?
In the mandates that we outsource, we want to pay a price commensurate for the service we get and also pursue our strategic goals in the areas of quality and stability. We are therefore looking for cooperation that promotes the joint achievement of such goals.
What are the basics that have to be created to be able to change to such a setup?
This agile form of cooperation is particularly suitable for teams that are already well-rehearsed, have sufficient experience in estimating the effort required, and whose performance can be assessed by the client.
What are the advantages of this change for you?
Teams expand their knowledge continuously. Therefore, changes in the teams are always associated with a loss of productivity. The model promotes continuity in setup and thus contributes to efficiency. From a legal point of view, the model helps us to maintain compliance in the area of the distinction between services and staff leasing, which is an important aspect, especially in the shoring business.
Where do you see the risks with this new model?
Estimates of expenditure always contain a certain potential for conflict. Even if the model does not contain a “fixed price” component, an estimate is always perceived as a “cost ceiling” for a service. Therefore, there may be different views on the expected and the achieved effort for a story.
How did you minimize these risks?
From a methodical point of view, we have defined reference stories that contain various complexities and serve as comparative values for the effort estimates. However, it is especially important to work together on “eye-level” and to have a team-oriented, partnership-based attitude. In the end, this allows different views to be discussed and resolved without damaging trust.
What recommendation can you make to an organisation that wants to test this model?
In the phase of evaluating the model, a reference visit to an ERNI customer helped us to better assess the practical application of the model, and the associated opportunities and risks. In my opinion, the willingness of the various stakeholders in the company to test new models with a manageable risk is also particularly important.