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Vested Outsourcing: A New Business Model

A flexible approach and a flexible agreement framework is needed, one that the Nobel laureate Oliver E. Williamson suggests is highly adjustable or adaptable, rather than one that prescriptively outlines detailed transactions, rigid terms and conditions, SOWs and working relations. [5] This is because business happens, constantly and unpredictably. A new business model is needed.

The Vested Outsourcing business model is a hybrid of outcome-based and shared-value principles best used when a company wants to move beyond having a service provider perform a set of directed tasks and wants to develop a solution based on mutual advantage to achieve the outsourcing company’s Desired Outcomes.

Vested Outsourcing’s hybrid model requires the parties to build a solid, cooperative foundation for sharing value—together. Highly integrated outcome-based business models use value incentives to maintain mutual advantage.

Exhibit 1 illustrates the positioning of Vested Outsourcing along the hierarchy of business model relationships, from simple to equitable partner.

Exhibit 1: Vested Outsourcing along the hierarchy of business model relationship.

Vested Outsourcing along the hierarchy of business model relationship.

[5] Oliver E. Williamson, “Outsourcing: Transaction Cost Economics and Supply Chain Management,” Journal of Supply Chain Management 44, no. 2 (2008): 5–16.


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