An emerging perspective on outsourcing relationships continues to take shape among enterprises on both sides of deals - Vested Outsourcing. The concept originated with University of Tennessee professor, Kate Vitasek, and is based on a combination of organizational, economic behavior and manufacturing concepts.
The core tenet of the approach is that outsourcing needs to move beyond solely a cost focus and zero sum game for the relationship.
The concept, as described in Vitasek’s book, Vested Outsourcing, Five Rules That Will Transform Outsourcing, “…combines the four influential business concepts of the 21st Century: outsourcing, collaboration, innovation and measurement. Like Lean, it is about streamlining and eliminating non-value-added activities regardless of who is doing the work. But Vested Outsourcing goes well beyond applying lean principles because it pushes the companies involved in an outsourcing relationship to innovate collaboratively to find the optimized solution, even if it means tradeoffs for one of the parties involved. At its heart, Vested Outsourcing is about all parties in the business arrangement going the whole nine yards to unlock the most efficient and effective solutions to the work being performed.”
The five core tenets of Vested Outsourcing help to define a framework for the outsourcing relationship:
- Focus on outcomes, not transactions.
- Focus on the What, not the How.
- Agree on clearly defined and measurable outcomes.
- Optimize pricing model incentives for cost/service trade-offs.
- Governance structure provides insight, not merely oversight.
As BPO continues to evolve, this approach seems to be an expected step in outsourcing’s maturity path. Is Vested Outsourcing an emerging perspective, has it already been instituted or are we still a long way from this as reality?