A thorny issue of KPIs is raised by active SIB/PFS industry practitioner Emma Tomkinson from her Australian idyll (albeit an idyll somewhat battered by weekend storms).
Contracting For Outcomes: Simple KPIs Not Enough For Complex Problems
Emma Tomkinson – The Mandarin
Three decades after outcomes-based contracting was introduced into US employment services, the jury’s still out on whether its use in human services really improves people’s lives.
This is despite outcomes-based contracts — a type of agreement where payment is made when certain targets are reached — often meeting the requirements specified in the agreement. So what’s the problem?
The failure of outcomes-based contracting to live up to the hype comes down to the fact that it’s quite difficult to reduce broad measures of well being down to one or two key indicators, according to a recent evidence review by social impact analyst Emma Tomkinson for the Australia and New Zealand School of Government.
Outcomes-based contracting was introduced into American employment services in 1982, Australian employment services in 1998, and via several models in New Zealand in the late 1990s and early 2000s. Social impact bonds are a slightly tweaked version of this older concept.
Thanks to a lack of data, it’s unclear how outcomes-based contracting compares with other types of outsourcing, and with government-delivered services. Some studies have shown it tends to be cost-neutral, or cheaper, compared to other modes of delivery.