Kate Vitasek has been at the forefront of supply-chain and outsourcing trends for many years, culminating in her development of the “vested outsourcing” concept. Vested outsourcing is the next generation of outsourcing, designed to create a true win-win relationship for clients and suppliers. Naturally, her CoreNet Global session was well-attended.
To a large degree, the strategic alliance model we use at Jones Lang LaSalle incorporates many vested outsourcing principles. Our business is based on long-term relationships and contracts that may be rebid, renewed without a rebid process, or terminated at any time at the client’s discretion.
Every relationship starts with the formation of key performance indicators, with financial and non-financial measures, to ensure that we win only when the client wins. If the KPIs turn out to be unfair to the client, we want to fix that as quickly as possible. If a contract were set up so that we lose money, many of our clients, I believe, would work with us to find an equitable solution. Most people seem to recognize that partnerships don’t work when one side gains at the expense of the other.
Questions from the audience in Atlanta focused on how to make these principles work. No one questions the value of vested outsourcing, but some CRE organizations are better positioned than others to implement practices that will lead to superior results. It’s not easy. But we are making it work with many of our clients, and it’s clearly the direction our industry is headed.