What is the Fixed-Fee Trap?

The Fixed-Fee Trap is incentive misalignment. Fixed-fee MSPs profit by minimizing their effort while maximizing their margin. They profit when you stay slow and understaffed. Your idle capacity is their profit margin.

Why do fixed-fee vendors understaff accounts?

Economics. Every dollar not spent on your account is profit. Fixed-fee contracts incentivize vendors to do the minimum required, not the maximum possible. Velocity isn't their metric—margin is.

How does Capped Consumption align incentives?

With Capped Consumption, we profit when you succeed. We bill in 15-minute increments for actual work delivered. Our incentive is velocity—the faster we solve problems, the more capacity you recover. Your success is our revenue model.

What's the proof that this model works?

HellermannTyton achieved 19% cost reduction in Year 1 while recovering 30% execution capacity. Costs were maintained at 81% of the budgeted cap. When you pay for outcomes, efficiency compounds.

What is the Fixed-Fee Trap?

The Fixed-Fee Trap is incentive misalignment. Fixed-fee MSPs profit by minimizing their effort while maximizing their margin. They profit when you stay slow and understaffed. Your idle capacity is their profit margin.

Why do fixed-fee vendors understaff accounts?

Economics. Every dollar not spent on your account is profit. Fixed-fee contracts incentivize vendors to do the minimum required, not the maximum possible. Velocity isn't their metric—margin is.

How does Capped Consumption align incentives?

With Capped Consumption, we profit when you succeed. We bill in 15-minute increments for actual work delivered. Our incentive is velocity—the faster we solve problems, the more capacity you recover. Your success is our revenue model.

What's the proof that this model works?

HellermannTyton achieved 19% cost reduction in Year 1 while recovering 30% execution capacity. Costs were maintained at 81% of the budgeted cap. When you pay for outcomes, efficiency compounds.

Scope of Execution

Operational FirewallOperational Intake LayerIntake GovernanceIdentity & Access

Co-Managed ITRoadmap ProtectionCapacity RepatriationGovernance Sovereignty

ERP CoreJD EdwardsSAP S/4HANAOracle FusionPeopleSoft

Infrastructure FabricAzure / AWS / OCIIdentity & IAMNetwork & Security

Status● Active

STATUS: CALIBRATED

REV: 2025.02

FORENSIC ANALYSIS

THE FIXED-FEE TRAP

The Physics: Incentive Misalignment.

"In a fixed-fee model, the vendor maximizes profit by minimizing work. Every efficiency gained by the vendor is profit they keep—it is not returned to you."

THE FAILURE MODE

The Incentive Gap

Fixed-Fee MSP Incentive

Minimize effort, maximize margin. Every dollar not spent on your account is pure profit.

→ Understaffed accounts→ Slow resolution→ Profit from your pain

Capped Consumption Incentive

Maximize velocity, bill for outcomes. We only profit when we solve problems faster.

→ Right-sized capacity→ 1.77-Day Resolution Pulse→ Profit from your success

THE EVIDENCE

HellermannTyton Case Study

$750M Global Manufacturer • Fixed-Fee → Capped Consumption Migration

19%Cost Compression

Year 1 savings vs. legacy MSP

90%Velocity Increase

16.4 days → 1.77 days ticket aging

81%Of Budgeted Cap

Actuals consistently under NTE

The Proof: By switching from Fixed Fee to Allari's Capped Consumption model, HellermannTyton achieved a 19% cost compression and increased velocity by 90%. Ticket aging dropped from 16.4 days to 1.77 days.

THE ALLARI FIX

Capped Consumption

We bill for velocity (Power of 15™ units), not presence. We only profit when we solve problems faster.

15minBilling Increments

Pay for actual velocity

NTEBudget Cap

Never exceed your budget

100%Transparency

OpenBook™ visibility

See the Economic Model

Frequently Asked Questions

QUANTIFY STRUCTURAL ENTROPY

Execution Drag is not a hypothesis; it is a measurable line item on your P&L. The Forensic Capacity Assessment isolates the specific capital deterioration caused by unplanned work, context switching, and knowledge fragmentation.

Analysis conducted by Senior IT Enterprise Leaders. Output includes a Capacity Loss Score and True Run-Rate calculation. Zero sales friction.