Best Practice Report

The Bell Tolls For Time-And-Materials Pricing — It’s Procurement’s Moment To Shine

The Industrialization Of Services Means It’s Time To Price Results, Not Labor

Summary

AI is accelerating the industrialization of professional and tech services. As AI-powered delivery models drive labor productivity in some services by 50% or more and service providers increasingly invest in and orchestrate AI agents to create code and other output, traditional T&M pricing models no longer make sense. Procurement needs to step up and lead their organizations toward pricing for measurable business outcomes rather than hours expended. You must educate and equip your buying network on the tradeoffs between different pricing models and choose one that creates the most incentives for providers to deliver the outcomes, while sharing risk and rewards. This report shows you how.

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