The Role of Data

 

Earlier this year, the Center for Outcomes-Based Contracting and Project Unicorn collaborated to explore the outcomes-based contracting model for districts, developing a guide for district leaders. This guide explains a shift in how K-12 school districts and education technology (edtech) providers can collaborate, transitioning from a traditional sales model to a partnership centered on student achievement.

The Role of Data

A critical component for OBC to work is data modernization. To track progress and measure outcomes, both the district and the provider need modern, interoperable data systems. This means data must flow seamlessly and securely between different platforms (like student information systems and the edtech tool itself) to provide real-time insights for teachers and administrators. The guide emphasizes that without a solid data infrastructure, successfully implementing an OBC is very difficult.

Core Concept: Outcomes-Based Contracting (OBC)

The central idea is Outcomes-Based Contracting (OBC). This is a new approach to structuring deals, where at least 40% of an edtech provider's payment is directly tied to achieving specific, pre-defined student learning outcomes.

This model changes the dynamic in several key ways:

  • From Transaction to Partnership: This approach forces districts and providers to collaborate closely in defining goals and ensuring the technology is implemented effectively.

  • Focus on Impact, Not Just Access: Success is measured by student progress, not just by whether the software was installed.

  • Shared Accountability: Both the district and the provider have responsibilities to ensure the program is used as intended to achieve the desired results.

Why It's Important for Edtech Providers

The guide outlines several compelling reasons for providers to adopt the OBC model:

  • Market Advantage: In a crowded field, offering an OBC demonstrates a commitment to results and helps a provider stand out.

  • Financial Incentive: Providers can earn 10-20% more than a traditional contract by sharing the risk and delivering on outcomes.

  • Deeper Partnerships: It builds trust and can lead to longer, more sustainable relationships with school districts that are increasingly pressured to show a return on their investments.

  • Improved Implementation: The model encourages a focus on implementing the product with fidelity, ensuring it's used correctly to get the research-backed results.

 

This Story from the Field is a supplement to the 2025 Project Unicorn State of the Sector Report which analyzes K-12 school system capabilities and infrastructure for leveraging education data. Read the full report.

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