The End of the Billable Hour? A New Model for Enterprise IT Services

SAN DIEGO, CA – August 20, 2026

For years, IT leaders have been trapped in a frustrating cycle with their managed service providers (MSPs). The model, built on the billable hour, often incentivizes activity over achievement, leaving platform owners paying for effort rather than progress. This reactive, time-based approach has created a landscape rife with unpredictable costs, strategic drift, and the exhausting paradox of having to actively manage one’s own managed services. Now, a shift is underway, challenging this decades-old paradigm. Tapping into this industry-wide frustration, ServiceNow Elite Partner Ondaro has launched Ondaro Propel, a new offering that aims to replace the billable hour with a model built on predictable outcomes, committed capacity, and AI-powered acceleration.

The Hidden Costs of Reactive Support

The traditional MSP model for enterprise platforms like ServiceNow is fundamentally a transactional one. Clients submit tickets, the provider logs hours to resolve them, and an invoice is generated. While simple on the surface, this structure carries significant hidden costs. Industry reports and conversations with IT executives reveal a consistent pattern of dissatisfaction. “We found ourselves in constant competition for attention, where our strategic roadmap items were perpetually pushed aside for urgent but low-impact fixes,” one CIO at a financial services firm shared anonymously. “We were spending more time managing the vendor relationship than leading our platform’s evolution.”

This experience is not unique. The reactive “break-fix” model means resources are mobilized only after a problem occurs, leading to increased downtime and user frustration. Success is often measured by the volume of closed tickets, not the tangible business value created. This focus on outputs over outcomes creates a deep misalignment between the client’s strategic goals and the provider’s incentives. Furthermore, the lack of cost predictability inherent in hours-based billing makes long-term budgeting a speculative exercise, while high technical turnover at many large service providers forces clients to repeatedly explain their unique workflows and business context, eroding efficiency and institutional knowledge.

A Shift to Outcomes and Predictability

Ondaro Propel is engineered to directly dismantle this reactive framework. The company asserts that organizations shouldn’t be bogged down by the minutiae of managing their service provider. “You shouldn't have to manage your managed services,” said Jameson Ford, Practice Strategy Lead, AI and Managed Services at Ondaro. “Propel gives you an expert advisor who helps steer the platform forward, connects your priorities to delivery, and stays accountable for where the platform goes next, not just what closed this month.”

At its core, the offering replaces ambiguous hourly billing with guaranteed monthly capacity that the client directs. This capacity is divided into two distinct workstreams. The first, ‘Operations,’ provides guaranteed coverage for incidents and service requests against committed Service Level Agreements (SLAs), ensuring the platform remains stable and responsive. The second, ‘Planned Development,’ is where the model’s innovative nature truly emerges. Development work is sized using ‘Development Points’ on a Fibonacci-based scale, a method common in agile software development. This gives platform owners a consistent, predictable unit of measure to prioritize their strategic roadmap, ensuring that crucial enhancements and new functionalities receive dedicated throughput each month. This structure provides a dual benefit: the stability of guaranteed operational support combined with the certainty of predictable progress on strategic initiatives.

Central to this model is the named Service Delivery Manager (SDM), who functions less like a project manager and more like a strategic advisor embedded within the client’s team. The SDM is responsible for connecting the client’s business priorities to the delivery backlog, providing governance, and bringing in specialized Ondaro expertise as needed—all without consuming the client’s paid delivery capacity. This built-in governance is a critical departure from traditional models, where account management and strategic planning often become separately billable activities.

The AI Accelerator: Augmenting Experts, Not Replacing Them

While the structural shift to outcome-based capacity is significant, the integration of artificial intelligence is what provides the propulsive force behind the model. Ondaro’s proprietary AI platform is used to accelerate a wide range of administrative and technical tasks, including refining development stories, assisting with build and quality assurance, grooming the product backlog, and conducting routine platform health checks. AI also automates the generation of KPI reports, freeing the human experts to focus on analysis and strategy rather than data compilation.

This is not a story of AI replacing human oversight but rather augmenting it. The company stresses that every AI-generated output is reviewed and validated by its experts before it reaches the client, with the SDM remaining fully accountable for the engagement’s overall quality and success. This “expert-led” approach allows the firm to leverage AI for speed and efficiency while retaining the critical thinking, contextual understanding, and strategic guidance that only seasoned professionals can provide. By handling the administrative weight of managing a complex platform, the AI allows the SDM and technical teams to dedicate their time to higher-value activities that directly impact business outcomes.

Navigating a Crowded and Evolving Market

Ondaro is entering a crowded field. The ServiceNow ecosystem includes global systems integrators like Accenture, IBM, and Deloitte, who offer broad, enterprise-wide transformation services. However, as a pure-play ServiceNow partner, Ondaro positions itself as a focused specialist with deep, platform-specific expertise. Its Propel offering is a clear bet on a broader industry trend. Analysts have noted for several years that the managed services market is undergoing a profound evolution, moving away from cost-oriented support and toward strategic, outcome-driven partnerships.

Enterprises are no longer satisfied with MSPs that act as simple “fixers.” They are seeking virtual CIOs and strategic advisors who can guide them through digital transformation, optimize their technology investments, and proactively prevent issues. The most forward-thinking providers are embedding AI and hyper-automation into their core delivery models, transforming operational efficiency. Ondaro Propel’s combination of a committed capacity model, a dedicated strategic advisor in the SDM, and an integrated AI accelerator places it squarely at the forefront of this evolution. By codifying concepts like ‘Development Points’ and building governance directly into its service, the company provides a tangible structure for the outcome-based future that many others are still only discussing in principle, forcing a necessary and overdue conversation about the true value of enterprise platform management.