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An introduction to the “Academics of Outsourcing”

Published February 8, 2011

Written by: Kate Vitasek
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Kate Vitasek

Kate Vitasek is an international authority for her award-winning research and Vested business model for highly collaborative relationships. She is the author of six books on the Vested model and a faculty member at the University of Tennessee. She has been lauded by World Trade Magazine as one of the “Fabulous 50+1” most influential people impacting global commerce.  

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Over the last five years I have been privileged to have funded research in partnership with the University of Tennessee and the United States Air Force to study outsourcing with the challenge to find a better way to outsource.

Along the way I have joined forces with the International Association for Contract and Commercial Management (IACCM) and the Corporate Executive Board. I have also had the opportunity to work with progressive practitioners that are applying the best thinking in terms of outsourcing. This research led to my book, Vested Outsourcing: Five Rules that Will Transform Outsourcing, and its follow-up, The Vested Outsourcing Manual (which will be published June 21).

At the same time, I have had spent a significant amount of time studying the academic thought-leaders who over the years did the initial spadework on concepts such as the structure of the firm, credible contracting, market forces, game theory, free markets, performance management, and flexible, collaborative contract governance. I have come to term these leading academics as “big thinkers” because many have won Nobel Prizes along with numerous accolades in the academic community.

Studying these big thinkers – coupled with five years of applied research working with companies that are applying progressive approaches to outsourcing – have helped lead me to the Vested concept. One short year after we have introduced the concept I am pleased that Vested Outsourcing has been endorsed by organizations such as the IACCM, the Outsourcing Institute and the International Association of Outsourcing Professionals.

This column is about sharing my insights into how to better structure your outsource deals. Each month I will feature one academic that is worthy of attention because of the wisdom, perspective and lessons they provide as it relates to how to outsource more effectively. I will also show how their big thinking can be applied to help you craft better outsourcing deals.

For me the key is not how prescient these big thinkers were (that’s certainly true and a big part of the story here), but how slow or hesitant businesses have been in understanding and applying their concepts and principles. Maybe this is because almost all of these big thinkers’ work is published in obscure academic journals and books that are mainly read by other academics. Their work is often densely written, not very sexy and hard to follow. Even if you do somehow come across them in your Googling or Binging, all too often we hear complaints that their ideas are not practical in the real world.

In essence, their ideas have to be “unpacked” or literally translated into a more palatable and direct form that relates their teaching to what the modern outsourcing practitioner and busy business executive is doing, or trying to do, in the real world. This is where this column comes in handy as each month I will feature a different big thinking and “unpack” how their work can help you develop a better outsourcing deal.

I will start by featuring the economists—the real unsung heroes behind why companies outsource and how to get the fundamentals of the business of outsourcing right.  From Coase to Solow to Nash to Williamson (and more) these thought-leaders, many of whom are Nobel Prize winners in Economic Science, form a necessary and useful academic bridge to modern outsourcing. After all, if it didn’t make bottom-line business sense no one would outsource!

Next I will feature the legal scholars, such as Ian Macneil. “No, not the lawyers!” you might say! “They only complicate your world.” You will find the big thinkers I will profile advocate a welcome sense of sanity when it comes to getting to an actual contract. Now if we could only get all the lawyers with the big thinkers we’d all have an easier time getting to the actual contract.

I will then feature fellow business school colleagues who each have unique angles to share.

Last, and probably the most indirect, are the psychologists such as Eric Bern, Carl Rodgers and Albert Mehrabian. “What?” you might ask.  “How does psychology play into the world of outsourcing?” Ahh…I’ll save this for the end after I trust you have found value in my column.

Each month I will share insights from Nobel Prize winners and other more unsung thought-leaders we can all learn from to help us strike better outsourcing deals.

My purpose in writing this column is consistent with the mission of my fellow Vested Outsourcing scholars at the University of Tennessee – to spread the word that there really is a better way to outsource. Most importantly, I will share that the better way is not some half-baked and overpriced consulting exercise – but really is baked-in through years of academic research.

This is why I’m thrilled for the opportunity to introduce and familiarise outsourcing professionals with these academic luminaries. These big thinkers’ theories and concepts are seminal in laying the foundation for the development and success of modern outsourcing and outsourcing agreements if you chose to heed the wisdom of their teachings.

I hope you will look forward to my column over the coming months and will eagerly anticipate the big thinking I will share. For those who want to learn more about me or Vested Outsourcing visit the University of Tennessee’s websitefor Vested Outsourcing. I welcome your feedback!

 
 

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