Outsourcing: Creating A Win/Win Partnership And Driving The Right Behaviour

Since 'outsourcing' came to prominence some 20 years ago 'win/win' has been the term used as the answer to address the concerns of both customer and suppliers. Win/win means both sides benefit.

Logically, an agreement is where both parties get benefit and value. But in outsourcing the complaint most often heard from both customers and suppliers is that there is no win/win. So, what does win/win really mean in an outsourcing environment?

In our view it broadly means 'fairness' and in this short article we look at four areas of where fairness can bring the desired win/win result.

Pricing

Let us start with pricing. Outsourcing had a reputation in its early days for aggressive pricing negotiations. In truth neither customers nor suppliers really understood the challenges of pricing long term relationships. These long term agreements often had pricing models that over the years became unrealistic particularly when applied to services which can change in scope and