The days of paying supply chain outsourcers by number of FTEs are on their way out. In that purely cost-based model, the OEM’s interests – keeping hours low to contain costs – are inherently pitted against their managed service provider’s – putting more FTEs on a project to maximise revenue. Instead, OEMs are now exploring outcome-based models, where sellers become partners who share the risks and rewards of achieving their goals.
I hope you have enjoyed the last columns focusing on the “economics of outsourcing.” I promised to explore other scholars and how we can learn from their leading work. For the next several columns I’ll be featuring the most influential “Big Thinker” psychologists that have directly or indirectly influenced the development of modern outsourcing.
It’s long past time for a change in the way outsourcing contracts are negotiated and managed. In 1968 the legal scholar Ian R. Macneil observed that most contracts are ill-equipped to address the reality of business needs.
This article originally appeared in Outsource Magazine Issue #23 Spring 2011
Leading academics charted a path that challenges the conventional definition of winning. Smart companies are applying these concepts, showing that win-win thinking is not just something nice to say: it’s smart business – and really is beautiful…
What does Adam Smith tell us about outsourcing? The answer is somewhat complicated: Nothing directly, but then again everything.