The Aftermarket Hasn’t Changed. The Constraints Have.

For decades organisations have understood that real value lies not in selling products, but in delivering performance over time. Aerospace introduced “power by the hour,” aligning payment with engine availability rather than spare parts. Industrial leaders such as SKF developed models focused on reliability and operational outcomes. Customers want to buy capability, not equipment.

So why didn’t outcome-based and lifecycle models become dominant long ago?

The limitation was capability. These approaches depend on trusted data, visibility into usage, operating conditions and performance. That data was incomplete, expensive or difficult to validate. Contracts linking payment to outcomes carried too much uncertainty, so commercial arrangements continued to operate with fixed pricing and rigid risk allocation.

This constraint both reflected and reinforced commercial fragmentation. Pricing, service delivery, finance and contracting operated separately, each holding part of the picture but none seeing the whole. Adaptive models were simply too risky to scale.

That constraint is now disappearing. Digital connectivity, sensors, analytics and AI are making performance visibility routine. Organisations can increasingly understand value creation as it happens rather than reconstruct it months later. The technical barriers that once limited lifecycle and outcome-based approaches are rapidly eroding.

Across industries, the aftermarket is becoming the primary engine of growth and margin. Revenue shifts toward long-term service relationships. Customers expect availability, efficiency and outcomes, not transactions.

But now, volatile markets mean that pricing and cost management must become dynamic – and contracting has become the constraint. Most agreements are still designed to create certainty at signature. Prices are fixed, risks allocated once, and governance assumes stability. Yet the environments those contracts govern are defined by continuous change. Renegotiations increase, change orders multiply and commercial friction grows. Organisations generate better insight but are struggling to act on it.

The barrier is no longer technology. It is commercial design. Organisations possess increasing commercial intelligence but lack integrated mechanisms to use it. Pricing teams see signals contracts cannot accommodate. Service teams understand performance realities without authority to adjust terms. Finance models remain disconnected from operational variability. Legal and contract management focus on compliance rather than the value that’s created during execution.

This fragmentation is structural and it is why the contracting process and contracts themselves must become governance frameworks. Through a streamlined process, contracts must define how pricing adapts, how performance is measured, how data is shared and how decisions evolve over time. The purpose of contracting shifts from locking terms to enabling controlled change.

Markets have already changed and technology has already changed. Contracting capability and capacity now determine whether organisations can keep up.