Gartner Research

How to Structure Incentives and Penalties in Outsourcing Contracts

Published: 02 December 2008

ID: G00163215

Analyst(s): William Maurer


The appropriate use of incentives and penalties is critical to the success of outsourcing contracts. These contract elements are often misused by enterprises, which require a framework for the successful use of incentives and penalties in outsourcing deals.

Table Of Contents
  • Overview

What You Need to Know


  • Incentives
  • Penalties
  • Earn-Back Opportunities
  • Penalties as a Contingent Liability
  • Tactical Guidelines
    • Incentives
    • Penalties

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