Why Vested Outsourcing is the next big thing

Let’s clear one thing up, the concept of “vested” is not a new thing. In fact, vested relationships have had their place in business for over 50 years. However, it was a team from the University of Tennessee that developed it from a mere concept to a progressive outsourcing business model that is helping companies establish relationships that result in mutually beneficial outcomes. This is called Vested Outsourcing.

What is Vested Outsourcing?

In order to understand Vested Outsourcing, you can simply start by asking yourself whether there “is a better way” - can you improve the context in which your existing outsourcing relationships are currently framed? Can you foster an environment for which innovation thrives and results in improved service, reduced costs and value for both parties?

According to Vested Way: “Vested® is a business model, methodology, mindset and movement for creating highly collaborative business relationships that enable true win-win relationships in which both parties are equally committed to each other’s success.” A hybrid business model of such in which both parties (the company and the service provider) focus on shared values and goals.

The principles of Vested Outsourcing

Research led by the University of Tennessee’s Kate Vitasek revealed inherent flaws from conventional transaction-based approaches which kept buyers and suppliers abstracted to the extent of their contracted arrangements. For multi-dimensional business relationships, the absence of collaboration, innovation and sharing value had the potential to disrupt even the best-intentioned outsourcing arrangements.

To evolve from a conventional relationship to a vested one, means following the Five Rules from Vested in a structured process to ensure an optimized deal structure. Read more about each of them in detail below.

1. Focus on outcomes, not transactions.
2. Focus on the WHAT, not the HOW.
3. Agree on clearly defined and measurable outcomes.
4. Pricing model with incentives that optimize the business.
5. Insight versus oversight structure.

Vested Outsourcing Successes

When organizations start to believe that “winning” in today’s rapidly changing environment, does not come “at the expense of the other” then the possibility of a truly vested outsourcing agreement can exist. By choosing to study only highly successful outsourcing and supplier agreements that were built on the foundation of true “win-win” criteria, the University of Tennessee’s research and fieldwork let them to companies such as P&G, McDonald’s and Microsoft; which showcased agreements that were designed to create and share value and led to desired outcomes and mutual success. This is why Vested Outsourcing could be the business world’s “next big thing”.

Ready to go Vested?

Screen Shot 2015-06-02 at 10.31.48

Learn more about the Vested movement here or if you live in Europe and want to know if Vested in right for you, University of Tennessee’s Vested comes to the continent for the first time with their “Vested Outsourcing” & “Collaborative Contracting” courses from June 15-19 hosted by ISS World Services in Copenhagen. Speakers include author, educator and business consultant Kate Vitasek behind the award-winning research and Vested® business model.

> More details about the Vested Outsourcing course here.
> More details about the Collaborative Contracting course here.