Picking Up on Vested Outsourcing

It’s really great to see corporate executives singing the praises of  Vested Outsourcing for it’s transformational impact on how companies approach outsourcing.

A recent post on Brown’s Compass Online website from Brad Mitchell, the UPS president of distribution and logistics, proclaims Vested Outsourcing is one of the Top 5 trends in logistics.  Mitchell sings the vested song, to wit: “The key is collaboration. It’s crucial that companies and their vendors, suppliers, and service providers work closely to establish appropriate goals based on business objectives and then create realistic and measurable supply chain outcomes that will advance mutual goals.”

That of course is right out of Vested Outsourcing’s Rule 3: Agree on Clearly Defined and Measurable Outcomes. The vested relationship functions best in a culture where the participants work with each other to ensure their mutual success – the idea is to buy desired outcomes, not individual transactions.

The other supply chain trends cited by Mitchell include, in brief: A focus on security; getting serious about sustainability and going green; outsourcing as a supply chain strategy and a way to free up working capital while focusing on core capabilities; and the continuation of “doing more with less” as the new normal, meaning flexible supply chains, more facility sharing and adoption of multimodal transport strategies.

Jim Barnes, president and CEO of enVista, an enterprise cost management services provider that does supply chain, transportation, ERP and CRM consulting, extols the “power of vested partnerships” recently in his blog.   In it he writes that a colleague gave him the book to read.  “I fully support her message and the book’s overall premise. Vested Outsourcing explores the concept of moving beyond what I refer to as ‘Type I partnerships’ whereby a contract between a supplier and customer is based squarely on price and activity. Vitasek rightly stresses the value and importan(ce) of moving instead to “Vested Outsourcing.”

His post continues at length, but he also suggests that “Vested Partnership” is a “better term than Outsourcing for several reasons … primarily because the end goal in any business partner relationship is to create a partnership based upon transparency, collaboration and improved cost containment or reduction whereby all parties have a ‘vested’ interest in the outcome.” I’m not exactly sure why that term is better, or whether he thinks I should change it (yeah right!) but he concludes his post saying: “I want to thank Kate Vitasek for inspiring me. Her book has validated the importance of Vested Partnerships, the same type of partnership enVista has been consulting on and putting into practice with its own clients for the last eight years.”

So maybe that explains where he’s coming from. I’ll stick with Vested Outsourcing for obvious reasons and because an outsource relationship is something that’s a little different than a corporate partnership. Legal expert George Kimball (author of Outsource Agreements: A Practical Guide) argues the term Partner connotes a legal entity. Kimball’s book because is an excellent guide to the legal and practical issues that can arise from complex outsourcing deals. While I agree in spirit with Jim – I’ll stick to Vested Outsourcing for now!

Let the vested inspiration flow. To paraphrase Sally Field’s famous comment after winning the Oscar: You like Vested Outsourcing! You really like it!

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