Christine Green

Workshop: Strategic Vendor Governance: Transitioning to Output-Based Pricing Models

Workshop Abstract:
When organizations move from effort-based pricing to output-based pricing, they stop buying time and start buying value.

As organizations seek greater transparency, predictability, and business value from software delivery, many are recognizing the limitations of traditional Time & Materials (T&M) and Fixed Price contracting models. Time & Materials contracts often reward the amount of effort expended, while Fixed Price contracts can encourage lengthy negotiations around scope, change requests, and contractual obligations.

Neither model inherently rewards efficiency, innovation, automation, or the rapid delivery of business value.

Output-based pricing offers a fundamentally different approach. Instead of paying for the number of hours worked or negotiating a fixed amount for an estimated scope, organizations pay for the software functionality and non-functional capabilities that are actually delivered. In this model, vendors are rewarded for creating value rather than for the time it takes to produce it. Faster delivery, process improvements, automation, and productivity gains can benefit both parties, creating stronger alignment of incentives and a healthier long-term client-vendor relationship.

This three-hour workshop provides a practical roadmap for organizations considering or implementing output-based contracts using Function Point Analysis (FPA) and the Software Non-functional Assessment Process (SNAP). It will not be a deep technical dive into the detailed counting rules of FPA or SNAP. Instead, the workshop will focus on the practical process, workflow, governance model, and contractual considerations required when these methods are used as the basis for a vendor-client agreement.

Participants will be walked through the steps involved in creating and operating a contract based on FPA and SNAP, including how to define the measurement scope, establish roles and responsibilities, design acceptance and validation processes, handle changes, manage disputes, and create reporting and governance routines that support the commercial model. The emphasis is on what needs to be in place around the measurement methods to make the contract successful in practice.

A key message throughout the workshop is that FPA and SNAP must be used with the right purpose in mind. These methods are often associated with estimation, productivity measurement, or benchmarking. While those are valid uses, they are not the focus here. In an output-based commercial model, FPA and SNAP are used for contracting and for governing the vendor-client relationship. Their purpose is to create a clear, objective, and mutually agreed mechanism for defining, pricing, accepting, and governing delivered software outputs.

The workshop will also address the organizational and behavioral factors that determine whether the transition succeeds. This includes stakeholder alignment, supplier engagement, measurement ownership, trust, change control, dispute prevention, and the need to keep the measurement process business-oriented rather than turning it into an administrative burden. Participants will learn how to avoid common pitfalls when moving from effort-based or fixed-price agreements to a model where the commercial focus is on measurable outputs and delivered value.

Through practical examples, lessons learned, and implementation guidance, attendees will gain a clear understanding of how to establish a sustainable governance framework for output-based software delivery contracts. The workshop is designed to help organizations create contracts that support transparency, shared accountability, and strategic vendor relationships while rewarding value delivered rather than time consumed.

Speaker Bio:
Christine Green is a Project Manager and governance advisor specialising in complex IT contracts and large-scale delivery programmes within regulated environments. Her work focuses on contract governance, vendor management, and ensuring that delivery organisations align contractual obligations, business objectives, and regulatory requirements such as the EU AI Act, GDPR, and MDR.

Having worked on both the client side and the vendor side of contract governance, Christine brings a balanced perspective on what drives successful contractual relationships and delivery outcomes. She has experience both advising on contracts and managing the delivery of projects operating under Fixed Price, Time & Materials, and Output-Based commercial models. This practical experience provides first-hand insight into how different contract structures influence collaboration, risk management, governance, and value creation.

Drawing on her background in software measurement, project delivery, and contract governance, Christine is particularly interested in how objective measurement, and effective governance can strengthen vendor-client relationships and support successful delivery. Her focus is on helping organisations move beyond managing effort and compliance towards managing outcomes, value, and long-term strategic objectives.

For this workshop, Christine combines her experience from both contract management and delivery execution to demonstrate how output-based contracts can be governed successfully and how organisations can create commercial models that reward delivered value rather than time spent.