User:Elizkanna/Vested Outsourcing

Vested Outsourcing is a fundamental business model paradigm shift in how a company and its outsourcing service providers do business. Based on research conducted by the University of Tennessee and funded by the United States Air Force, Vested Outsourcing identifies the 10 inherent ailments in today’s flawed and old-school outsourcing agreements, and where these ticking time bombs might be lurking within every company. Vested Outsourcing has five key rules for a successful Vested Outsourcing agreement, setting the stage for companies to take their outsourcing relationships to the next level. Companies applying Vested Outsourcing rules can create a true vested partnership that can yield significant benefits for both parties.

Overview Vested Outsourcing:

Based on research from the University of Tennessee. Funded by the U.S. Air Force to find “a better way to outsource” Applied field research to study some of the most successful outsourcing relationships and contracts Study found that most outsourcing agreements have inherent flaws Purpose was to codify the “rules” of outsourcing. Vested Outsourcing: Is centered on buying results instead of tasks and/or activities (payments are based on achieving results) Leverages “win-win” thinking associated with game theory/behavioral economics Win-win” is also known as “solutions concept” and is based on what is commonly known as “game theory.” The most famous of the “game theorists” is John Nash.

The Nash equilibrium states that no player can benefit by changing strategy while the other players keep their strategies unchanged. That set of strategies and the corresponding payoffs constitute the “Nash equilibrium.” Nash shared the 1994 Nobel Memorial Prize in Economic Sciences with game theorists Reinhard Selten and John Harsanyi; the movie A Beautiful Mind portrays his story.

Eight Nobel prizes have been awarded to game theorists. Game theory is at the heart of Vested Outsourcing.

Uses incentives to encourage transformational results Follows a structured implementation model to improve implementation It is being endorsed by Microsoft, Intel, the Outsourcing Institute, ARC Advisory Group, and the International Association of Commercial and Contract Management. Microsoft and other corporations are piloting Vested Outsourcing in facilities management and back-office finance.