Vested Outsourcing Creates a Win Win Situation

  January 23, 2014

When Procter & Gamble decided to outsource its facilities management to Jones Lang LaSalle in 2003, at the time it was a ground breaking deal spanning over 60 countries and multiple functions, including facility management, project management and certain occupancy services, says an article in Area Development. The partnership has been highly successful and in-step with the larger enterprise's focus on innovation.

Among the keys to the successful relationship are that, instead of an adversarial relationship, the outsourcing relationship is a true partnership. According to the article, 600 P&G employees became JLL employees as part of the outsourcing effort, so the merged mindset was there from the get go. As well, a well-crafted contract with clear and simple expectations is credited with fostering the right behaviors.

The PG&E and JLL outsourcing relationship follows the rules of "Vested Outsourcing", says the article, which focuses on collaboration, alignment and performance-based goals. This term was coined by researchers at the University of Tennessee's Center for Executive Education and the International Association of Contract and Commercial Management.

According to the authors, there are five rules of Vested Outsourcing. The first is to focus on outcomes and tied to this is the second rule that what's important is the what, not the how. Thirdly: Outcomes must be measurable and clearly defined. The fourth rule requires moving away from the mentality that the bargain basement price wins, and instead requires a pricing model that recognizes that good service requires appropriate recompense. And the last rule changes the oversight structure from oversight to insight that respects the professional capabilities of the outsourcing service provider and creates a responsive mechanism for governing the relationship.

Read the article here.

And find out more about the Procter & Gamble outsourcing relationship with JLL here.


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