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Vested Outsourcing
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Vested Outsourcing

Five Rules That Will Transform Outsourcing

Kate Vitasek, Mike Ledyard and Karl Manrodt
Palgrave Macmillan, 2010
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8

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  • Innovative
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Recommendation

Outsourcing is a fact of life for most businesses, generally for services like facilities management, market research or trouble-shooting over the phone for customers. But traditional outsourcing arrangements don’t always deliver all the value they could for either the client firm or the outsource provider. Supply chain management consultant Kate Vitasek (writing with Mike Ledyard and Karl Manrodt) calls for a new approach to outsourcing that shifts the relationship from adversarial to collaborative, and thus delivers tangible benefits to both parties. The US Air Force, “which spends more than 50% of its entire procurement budget on procured services,” sponsored this study under the auspices of the University of Tennessee’s Center for Executive Education. This report provides a template for companies and providers searching for better outsourcing results and for more lucrative savings or profits. getAbstract recommends this thorough, illuminating guide to new and veteran outsourcing clients and providers.

Summary

Going the Distance

The practice of outsourcing is as old as humanity. As soon as people realized they could multiply their productivity by sharing their work, they abandoned self-sufficiency and began parceling some tasks out to other people who specialized in those jobs either by learned skill or innate ability.

Modern outsourcing took off as a global enterprise in the late 20th century. In the 1970s, along with other innovators, “technology services provider” EDS pioneered (and, some say, named) outsourcing. In the 1980s, companies farmed out limited processes. In the 1990s, rapid advances in technology gave outsourcing a rocket to ride. The growing sophistication of computer communication let businesses become “placeless,” allowing them to operate anywhere, at any time. The concept of “core competencies” became another force impelling the contemporary emergence of outsourcing. Following In Search of Excellence co-author Tom Peters’s dictum, “Do what you do best and outsource the rest,” firms focused on areas where they excelled and rushed to farm out nonessential operations to third parties. Companies now routinely outsource their information technology...

About the Authors

Kate Vitasek, founder of Supply Chain Visions, teaches at the University of Tennessee’s Center for Executive Education. Mike Ledyard is the co-author of Keeping Score: Measuring the Business Value of Logistics in the Supply Chain. Karl Manrodt teaches at Georgia Southern University.

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