This chapter will outline guidelines developed to both support and enhance innovation within the context of procuring complex performance (PCP) contracts. Such contracts are currently being employed across a range of sectors where limited market conditions exist. Such contracts and market conditions are set to remain the dominant form of defence procurement strategy for the foreseeable future. The case of the Typhoon combat aircraft programme is presented as an example of a typical, large‐scale, complex procurement programme for the defence industry. The MoD and the UK defence industry have developed new, contractual models for procuring complex equipment, such as aircraft and naval ships. These models involve the contracting for complex performance, which has changed the paradigm in the relationship between the customer(s) (MoD, UK Armed Forces) and the supplier (UK Defence Industry). Outcome‐based contracts for procuring complex performance (PCP) have been employed widely by the defence industry and other sectors in limited or oligopolistic markets. Ten theoretical propositions are presented in this chapter, to help us discuss PCP contracts. The literature review will include servitisation, complex performance models and discuss innovation strategies in the context of limited markets. Lessons learnt from the case, and guidelines for enhancing innovation are presented.
Part of the book: Case Study of Innovative Projects
This chapter investigates, through a literature review, the increasing use of outsourcing by organisations and why this has become so prevalent in recent years. The use if an effective performance management system for outsourcing projects in the financial services organisation is considered as a means of ensuring success, and how outsourcing can be sustainable through the use of appropriate KPI’s. The research results give valuable information on the use of monitoring the performance of suppliers through the use of a clear framework for performance management, and how this will avail the organisation of the many potential pitfalls which may be encountered with outsourcing. Further work is recommended in the area of outsourcing relating to the use of effective performance management and key performance indicators, which are carefully chosen to reflect the markets the organisation operates in, to reduce the risk of failure.
Part of the book: Positive and Negative Aspects of Outsourcing