Outcome-Based Economic Model

An economic model in which a supplier is paid for the realization of a defined set of business outcomes, business results, or agreed-on key performance indicators. An outcome-based model typically shifts risk to the supplier for achieving the outcome, but requires both a buyer and supplier to work together to achieve the outcome. A well-structured agreement compensates a supplier’s higher risk with a higher reward. See also Outcome or Outcome-Based Metric.