Does "Risk & Reward" Really Work in IT Services and Outsourcing Relationships?

Companies often talk about implementing risk & reward mechanisms in their IT services or outsourcing relationships, but what does "risk & reward" really mean in practice and is there really such a thing as a genuine, balanced "risk & reward" mechanism? Maybe there’s no single magic bullet, but what structures can be combined in a fair and balanced way?

Customers tend to focus on the risk element – in terms of shifting risk on to a service provider; whilst service providers are obviously more interested in the reward element and less interested in accepting risks over and above their standard model. This article looks at a number of risk & reward mechanisms and considers the pros and cons of those various mechanisms.