Manufacturing Support

The application of Business Process Outsourcing (BPO) can be implemented through two main engagement models

 

  • Daily or project-based
  • Lumpsum-based or Output-based

The application of Business Process Outsourcing (BPO) can be implemented through two main engagement models

 

  • Daily or project-based
  • Lumpsum-based or Output-based
The difference between Lumpsum based and Output based
Feature Lumpsum-based BPO Output-based BPO
Pricing Fixed Price Based on measurable output
Risk Risk is on the service provider Risk is on the client
Flexibility Limited flexibility Flexible to changing requirements
Cost High predictability Variable, depending on the output and performance
Use Case Standardized tasks, short-term contracts Variable workloads, long-term contracts
What is the advantages and disadvantages of each system ?
Advantages Disadvantages
Lumpsum-based : Ideal for projects with clearly outcomes Budget certainty for the client Less flexibility for changes
Simple to implement with clear deliverables The cost overruns may significant for service provider
Low risk for the client
Output-based : suited for dynamic processes Scalability Complexity in tracking performance
Incentivizes high performance Cost uncertainty
Flexibility Risk for service provider

PROFIL TEAM MANUFACTURING SUPPORT

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