Vested Outsourcing is a fundamental business model paradigm shift in the ways in which a company that outsource and their service providers do business developed by Kate Vitasek in conjunction with the University of Tennessee.
Vested Outsourcing is a new methodology by which companies such as that outsource and service providers such as MyOutDesk, LLC can work together more effectively. They work collaboratively to develop a performance-based partnership in which both parties’ interests are aligned, and each become vested in each others’ success in the long run.
Here are the 5 Rules of Vesting Outsourcing in relation with MyOutDesk, LLC…
Rule #1: Focus on Outcomes, Not Transactions.
We work in a culture in which both the Client and MyOutDesk, LLC, work together to ensure their mutual success and the service we provide is paid based on its ability to get the desired outcomes. With using MyOutDesk, LLC services, our clients specify what they want and are responsible for determining how and what is delivered to their MyOutDesk, LLC. VAs. In essence, Vested Outsourcing buys desired outcomes, not individual transactions. The service provider is paid based on its ability to achieve the mutually agreed desired outcomes.
Rule #2: Focus on the What, Not the How.
This isn’t going to change the nature of the work to be performed. Of course at the operational level, lines of code must be written, rules and tasks are established. But what changes is the way that the client purchases MyOutDesk, LLC services. Good companies outsource for a reason: In-house operations are either too expensive, ineffective, or both. It is up to us to the client to put the supporting processes together to achieve the desired outcomes.
Our MyOutDesk, LLC. VAs will know of the most appropriate hardware for a given task, and they may even know of a process or system efficiencies that allow them to do the task with less labor than non-IT firms. Partnerships performance is letting each party do what it does best. Unless the client that is outsourcing has the skills and the resources to keep up with the latest innovations in the service it is outsourcing, it should leave the details to the experts.
Collaboration lies at the heart of all this. To be successful, a service provider often becomes responsible for more services and has to work with other service providers.
Rule#3: Agree on Clearly Defined and Measurable Outcomes.
All parties must be explicit in defining the outcomes they want. These outcomes are expressed in terms of a limited set of — ideally, no more than five — high-level metrics. Both parties should spend the time, collaboratively during the outsourcing process, and especially during contract negotiations, to establish explicit definitions for how relationship success will be measured.
Once the desired outcomes are agreed on and explicitly defined, the MyOutDesk, LLC can propose a solution that will deliver the required level of performance at a predetermined price — often in terms of cost per unit usage. Under the purest form of Vested Outsourcing, the client that is outsourcing pays only for results, not transactions; rather than being paid for the activity performed, service providers are paid for the value delivered by their overall solution.
Rule#4: Optimize Pricing Model Incentive
This is a properly structured price model that incorporates incentives for the best cost and service trade-off.
When establishing the pricing model, businesses should apply two principles: 1. The pricing model must balance risk and reward for the organizations. The agreement should be structured to ensure that MyOutDesk, LLC assumes risk only for decisions within its control. 2. The agreement should specify that the service provider will deliver solutions, not just activities. When properly constructed, Vested Outsourcing will provide incentives to the service provider to solve the customer’s problems. Performance partnerships usually are based on fulfillment of the desired trade-off stated by achieving: • higher service levels at the same cost • the same service levels at lower costs • higher service levels and lower cost levels The correct pricing model supports the business and provides appropriate embedded incentives. It is important to understand implicitly that the outsource provider is a profit maximizer. This is reasonable, since few businesses are designed to be otherwise.
Rule#5: Governance Structure Should Provide Insight, Not Merely Oversight.
In an effective Vested Outsourcing partnership, a company contracts with service providers that are real experts. Such partnerships should be managed to create a culture of insight, not oversight.
If a company has done a good job picking the proper outsource provider, a trusted expert in its field, why does it need a small army to conduct general supervision?
A properly designed governance structure should establish good insight, not provide layers of supervisory oversight.