Outcome-based contracts as new business model: The role of partnership and value-driven relational assets

Ng, Irene C. L.; Ding, Xin; Yip, Nick

doi:10.1016/j.indmarman.2013.05.009

Cited by 140 publications

(109 citation statements)

References 94 publications

(118 reference statements)

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“…As asset owners act as residual claimants, they bear the consequences of all uncertainties not specified in a contract (Barzel, 1987(Barzel, , 1997Ghosh & John, 1999;Grossman & Hart, 1986;Ng, Ding, & Yip, 2013).…”

Section: Transaction Cost Economics Transaction Cost Economics Targementioning

confidence: 99%

Unlocking value from machines: business models and the industrial internet of things

Ehret

Wirtz

2016

Journal of Marketing Management

207

120

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In this article we argue that the Industrial Internet of Things (IIoT) offers new opportunities and harbors threats that companies are not able to address with existing business models. Entrepreneurship and Transaction Cost Theories are used to explore the conditions for designing nonownership business models for the emerging IIoT with its implications for sharing uncertain opportunities and downsides, and for transforming these uncertainties into business opportunities. Nonownership contracts are introduced as the basis for business model design and are proposed as an architecture for the productive sharing of uncertainties in IIoT manufacturing networks. The following three main types of IIoT-enabled business models were identified: (1) Provision of manufacturing assets, maintenance and repair, and their operation, (2) innovative information and analytical services that help manufacturing (e.g., based on artificial intelligence, big data, and analytics), and (3) new services targeted at end-users (e.g., offering efficient customization by integrating end-users into the manufacturing and supply chain ecosystem).

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Section: Transaction Cost Economics Transaction Cost Economics Targementioning

confidence: 99%

Unlocking value from machines: business models and the industrial internet of things

Ehret

Wirtz

2016

Journal of Marketing Management

207

120

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“…Elsewhere, more generic outcome-focused business practices are receiving increasing attention and are known as 'solution business models' (Storbacka, 2011(Storbacka, , 2013, 'outcomebased contracts' (Ng et al, 2013, Ng andNudurupati, 2010), 'result-orientated product-service systems' (Barquet et al, 2013), 'performance-based contracts' or 'servitization' (Vandermerwe and Rada, 1988). Examples of such commercial arrangements include Rolls Royce's 'Power By the Hour ©' service or printing equipment manufacturers that provide their printers to customers for free and then charge per printed sheet (Barquet et al, 2013, Ng et al, 2013.…”

Section: Sustainability Goals and Performance-based Contractingmentioning

confidence: 99%

“…Examples of such commercial arrangements include Rolls Royce's 'Power By the Hour ©' service or printing equipment manufacturers that provide their printers to customers for free and then charge per printed sheet (Barquet et al, 2013, Ng et al, 2013.…”

Section: Sustainability Goals and Performance-based Contractingmentioning

confidence: 99%

“…This has implications for sustainability (Tukker, 2004). For example, Ng et al (2013) suggest that outcome-based contracting provides a means of supporting corporate sustainability efforts by creating long-term customer value of service rather than transactional relationships based on goods.…”

Section: Sustainability Goals and Performance-based Contractingmentioning

confidence: 99%

“…This demands increased flexibility as well as a switch to a network perspective of the firm's relationship and interactions with the customer (Storbacka et al, 2013). Consequently, customer interaction must be managed very differently due to the introduction of new incentives, the transfer of risk from the customer to the provider and the shared responsibility for achieving the outcome (Ng et al, 2013, Ng andNudurupati, 2010). Such challenges are particularly important in the context of delivering sustainability goals which tend to revolve around temporal and spatial trade-offs between social, ecological and economic ends (Valente, 2012).…”

Section: Sustainability Goals and Performance-based Contractingmentioning

confidence: 99%

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The Role of Umbrella Agreements in Achieving Sustainability Goals: Energy Efficiency at the Empire State Building

Dahlmann¹,

Veal²

2016

Journal of Green Building

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In this paper we investigate whether innovative and flexible contractual arrangements can support the process of achieving ambitious sustainability goals. We explore this question through an analysis of the role of umbrella agreements in driving energy savings in the building sector. Drawing on a case study of the iconic Empire State building, we examine the typical challenges faced by clients and contractors in devising suitable agreements that facilitate managing contractual and performance risks, as well as the sharing of responsibilities and cooperation between multiple project stakeholders. We find that the project arrangements appear to exhibit the adoption of the key characteristics commonly found in umbrella agreements which incorporate sustainability measures that maximize income through efficient delivery of outcomes. Specifically, this means that they need to enable stakeholders to manage repeated review cycles, complex perceptions and expectations, and different tacit assumptions and codes of behaviour, as well as managing and communicating in networks and obtaining agreement also from non-contractual parties. Moreover, we demonstrate that umbrella agreements can facilitate a network perspective of business relationships by emphasizing value co-creation and the embeddedness of firms within a network of interactions.

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Dynamic and Modular Business Models for Maintenance

Kans

Ingwald

2020

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Outcome-based contracts as new business model: The role of partnership and value-driven relational assets

Cited by 140 publications

References 94 publications

Unlocking value from machines: business models and the industrial internet of things

Unlocking value from machines: business models and the industrial internet of things

The Role of Umbrella Agreements in Achieving Sustainability Goals: Energy Efficiency at the Empire State Building

Dynamic and Modular Business Models for Maintenance

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