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Exploring outcome-based pricing model for management consulting services

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by Sakthi Prasad
5 May 2014

Management consulting service is an inalienable part of business landscape. Companies hire consultants to resolve various issues involving strategy, human resources, operations, finance and IT.

Consulting firms have traditionally adopted Time and Material as well as Fixed Fee as methods of compensation for rendering service.

Time and Material entails paying the consultants by the hour; whereas Fixed Fee constitutes paying a lump sum for the services offered.

After studying the business problems, consultants make recommendations and companies go ahead and implement them (in some case they may not). The consultants then collect the fee irrespective of the outcome of the steps implemented.

This is where outcome-based pricing model comes into picture, which has lately been gaining prominence. At some point in time, buyers of consulting services would like to pay a fee based on the outcome so as to obtain more bang for the buck.

Emergence of outcome-based pricing model can be owed to factors such as tight budgets and ability to share risks with the consultants.

Also, some consultants have been applying this approach in a bid to differentiate themselves from their peers.

Beroe's management consulting expert Raviteja Kothuri would be discussing the evolution of outcome-based pricing model during the Webinar scheduled for May 14.
Kothuri will discuss the applicability of the pricing model across all service lines such as strategy, human resources, operations, finance and IT.
During the Webinar, Kothuri will also talk about the methodology to evaluate the outcome of consulting projects through case studies.

Key Take Away from the Webinar:

  • How will adoption of outcome-based pricing model impact the procurement strategy of consulting buyers
  • Key criteria to evaluate for which service lines and project categories the buyers can switch to outcome-based pricing models
  • Road map for the outcome-based pricing model's adoption and implementation
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