What is an Output-based contract vs T&M?

T&M (Time & Material) bills by the day: TJM × booked days. Output-based bills the deliverable: fixed forfait for a sprint, a feature or a milestone. The client pays the result, not the effort. Abbeal operates 3 variants: sprint forfait (2 weeks), feature forfait (2-6 weeks), Outcome-based (forfait + bonus if business KPI hit).

What types of missions suit Output-based?

When scope is framable (= defined product, not a POC), Abbeal team is >3 engineers, mission >3 months, and the client has a mature PM or Product Owner. On those criteria, Output-based beats T&M on 5 metrics (margin, NPS, length, re-sign, velocity). For POCs or <2-month missions, T&M remains relevant (scoping overhead not amortisable).

What additional margin vs T&M?

+18 pts of Abbeal gross margin measured across 12 Output-based missions vs 12 comparable T&M (2024-2025): T&M 28% → Output-based 46%. Mechanically: team ships faster (-20% days for same scope), so margin on the fixed forfait grows. Client doesn't lose: same global price or less, and receives a working product.

How to handle scope change on Output-based?

Structured Change Request: we quantify impact (engineer days × equivalent TJM), document the derogation, sign before executing. No « can you just add this quickly ». This discipline is non-negotiable on Abbeal side and what makes the model economically viable over 14-month averages (vs 8 months on T&M).

Which firms have adopted this model?

At Abbeal, 78% of Q2 2026 portfolio is Output-based. Market side: ThoughtWorks, Pivotal Labs (before VMware acquisition), 18F (US Government Services), part of Pivotal/Tanzu, and several SaaS scale-ups. Resistance remains strong from large procurement (Big 4, Sopra, Capgemini) trained on T&M for 30 years. On 12 Abbeal Output-based missions 2024-2025, we got the format past 11 buyers out of 12.

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Output-based vs Time & Material: why we killed T&M at Abbeal.

Q: What additional margin vs T&M?

+18 pts of Abbeal gross margin measured across 12 Output-based missions vs 12 comparable T&M (2024-2025): T&M 28% → Output-based 46%. Mechanically: team ships faster (-20% days for same scope), so margin on the fixed forfait grows. Client doesn't lose: same global price or less, and receives a working product.

Q: How to handle scope change on Output-based?

Structured Change Request: we quantify impact (engineer days × equivalent TJM), document the derogation, sign before executing. No « can you just add this quickly ». This discipline is non-negotiable on Abbeal side and what makes the model economically viable over 14-month averages (vs 8 months on T&M).

Q: Which firms have adopted this model?

At Abbeal, 78% of Q2 2026 portfolio is Output-based. Market side: ThoughtWorks, Pivotal Labs (before VMware acquisition), 18F (US Government Services), part of Pivotal/Tanzu, and several SaaS scale-ups. Resistance remains strong from large procurement (Big 4, Sopra, Capgemini) trained on T&M for 30 years. On 12 Abbeal Output-based missions 2024-2025, we got the format past 11 buyers out of 12.

78% of Abbeal portfolio runs on Output-based pricing in 2026. Gross margin +18 pts, NPS +24, engagement length ×1.7. How we operate and 3 success conditions.

Published 2 June 2026Updated 10 June 202611 min

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