Gainshare

Achieve savings with a performance-based sourcing services model.

Transparency, Accountability, and Return on Investment

Gainshare programs require a deep mutual commitment to the process, starting with the definitions of savings and ending with assumptions for compensation. Velocity’s expert sourcing team has performed dozens of performance-based sourcing programs, so we understand what it takes.

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Unlock Savings That Drive Real Impact

With Gainshare, procurement performance directly fuels business success. Let’s align on outcomes and turn savings into strategic advantage.

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Improve Innovation with Gainshare or Outcome-Based Models

You can take your pick. At the end of the day, we all mean this to be the concept of achieving cost savings via a 3rd party services provider – done so at a low-or-no upfront investment by the client organization. Simply put, the provider states that they will save you money by performing sourcing work and they will get paid only on how they perform (aka cost savings achieved).

Gainshare or outcome-based models are by no means new to the sourcing industry. But now, with a greater understanding of these programs and their potential benefits, they have grown again in popularity. We see a resurgence in clients demanding greater innovation and more cost-effective services, particularly in process-driven services such as finance and accounting.

Achieve Optimal Results With Outcome-Based Sourcing Services

A true outcome-based model requires a considerable amount of strategic planning and collaboration between the client and the services provider. The are a few critical factors that should be considered if the program is to be a success.

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Analyze

Perform a detailed spend data and contract analysis

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Define

Develop a mutual definition of savings and how it is measured

03

Align

Align culturally on willingness to changes (eg. “sacred cows”)

04

Plan

Layout a mutually rapid timeline to achieve value as quickly as possible

05

Commit

Gain executive buy-in and stakeholder commitment early

06

Audit

Establish independent audit process, preferably through client finance

07

Implementation

Award and onboard supplier(s) and update processes

08

Change Management

Notify, train and support all stakeholders

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Insight

Infographic

Case Study

Benefits of the Outcome-Based Model

Some procurement organizations have achieved a high level of maturity or have excelled in certain areas of their business, yet they still require some degree of support in expanding their capabilities

Lower Upfront Investment
The traditional Gainshare model emphasizes an approach where the client invests a very low or zero budget at the start of the program. However, these programs tend to be most effective when the client makes a nominal investment.
Shared Program Risk
As the majority of the provider fees are paid on a performance basis, the provider carries a greater degree of risk when compared to traditional management consulting engagements. This levels the playing field, which results in a much higher level of focus and urgency for both parties.
Speed to Savings
The Gainshare model puts significantly more onus on the provider to deliver on the performance targets that are mutually established. This motivates the provider to deploy a more sophisticated team of experts who are more likely to produce superior results as efficiently and quickly as possible.

Gainshare

Transparency, Accountability, and Return on Investment

Unlock Savings That Drive Real Impact

Improve Innovation with Gainshare or Outcome-Based Models

Achieve Optimal Results With Outcome-Based Sourcing Services

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The Hidden Cost of Leadership Indecision During Transformation

Why P2P Implementations Fail After Go-Live: The Role of Execution Readiness

Why P2P Implementations Fail After Go-Live: The Role of Execution Readiness

Benefits of the Outcome-Based Model

Lower Upfront Investment

Shared Program Risk

Speed to Savings

Spend Analysis

Sourcing Execution

Reverse Auctions

Gainshare

Indirect Spend

Direct Spend

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