Pros and Cons of the Implementation of Innovative Performance Contracting

State of the Art and Managerial Consequences from Supplier’s Point of View

JournalIndustrie Management
Issue Volume 19, 2003, Edition 4, Pages 32-35
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Abstract

Performance contracting changes the way of cooperation between customer and supplier substantially and turns a former product business into a service business. Both from supplier’s and customer’s point of view several reasons exist why to adopt contracting solutions. The actual market adoption, however, is still moderate. After the introduction of the peculiarities of performance contracting, this paper deals with the causes of market resistance and the most important barriers of launching the respective solutions. Based on empirical observations proposals are developed in order to overcome the resistance.

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Potentials: Business Models