In this must-have guide for creating and implementing successful outsourcing processes and partnerships, Vitasek drives the principles of Vested Outsourcing beyond theory into practice. From shared vision, desired outcomes to win-win and long-term success the manual will help managers build an agreement vested in each other's success. "Vested Outsourcing truly flips conventional outsourcing on its head. This book is a must read for any company outsourcing that is trying to achieve fast, good and cheap." - Peter Sheahan, Author of the bestselling book Flip "The journey to a truly collaborative agreement is practically guaranteed if you follow the step-by-step process outlined in this great book." - Dawn Tiura Evans, President and CEO, Sourcing Interests Group "Vested Outsourcing offers a robust approach for developing high-performing strategic relationships. Read this book and learn how you can take your strategic relationships to the next level." - Tim Cummins, CEO, International Association for Contracting and Commercial Management "The Vested Outsourcing Manualshould be a must-read for every organization engaged in outsourcing." - Joe Andraski, President and CEO, Voluntary Interindustry Commerce Solutions Association "This is truly a landmark work, presenting logical, practical,and sound principles and practices for establishing and governing mutually rewarding outsourcing relationships that can withstand the challenges of changing market conditions.It is a masterpiece of common sense." - Jim Groton, renowned dispute resolution expert and former President of the American College of Construction Lawyers "We've had tremendous success in applying Vested thinking with strategic clients; The Vested Outsourcing Manual now gives us a systematic approach to apply the concepts more broadly." - Lauralee Martin, Chief Financial Officer and Chief Operating Officer ofJones Lang LaSalle KATE VITASEK is Lead Researcher and Faculty Member for Vested Outsourcing at the University of Tennessee's Centre for Executive Education, USA. Vitasek is also Founder of Supply Chain Visions, a consulting firm that specializes in supply-chain strategy and education. She is a guest faculty at dozens of Universities and also teaches seminars for the Warehouse Education Research Council, Council of Supply Chain Management Professionals and is on the peer review board for the Journal of Business Logistics with Jeanette Nyden, JD,  Jacqueline Crawford, and Katherine Kawamoto. The Vested Outsourcing Manual A Guide for Creating Successful Business and Outsourcing Agreements By Kate Vitasek, Jacqui Crawford, Jeanette Nyden, Katherine Kawamoto Palgrave Macmillan Copyright © 2011 Katherine Kawamoto All rights reserved. ISBN: 978-0-230-11268-1 Contents List of Figures, Introduction: Implementing the Better Way, PART I LAYING THE FOUNDATION, Chapter 1. Are You Ready?, Chapter 2. Playing by the Rules, PART II CREATING THE RULES OF ENGAGEMENT, Chapter 3. Rule #1: Focus on Outcomes, Not Transactions, Chapter 4. Rule #2: Focus on the What, Not the How, Chapter 5. Rule #3: Agree on Clearly Defined and Measurable Outcomes, Chapter 6. Rule #4: Optimize Pricing Model Incentives for Cost/Service Trade-offs, Chapter 7. Rule #5: A Governance Structure that Provides Insight, Not Merely Oversight, PART III GETTING TO WE, Chapter 8. Wrapping Up Your Vested Agreement, Chapter 9. The Next Leg of Your Vested Journey, Chapter 10. Conclusion: Reaching Your Destination, Acknowledgments, Appendix A: The Ten Ailments, Appendix B: IACCM Top Terms 2010, Appendix C: Templates, Appendix D: Additional Resources, Notes, Glossary, Index, CHAPTER 1 ARE YOU READY? When an outsourcing relationship goes wrong, it can cost millions of dollars, result in lost market share, and have a disastrous impact on consumer confidence in a company or brand. The University of Tennessee faculty outlined perverse incentives that result in poor outsourcing agreements in their research and first book, Vested Outsourcing: Five Rules that Will Transform Outsourcing. Although it is safe to say that companies want to improve their outsourcing practices, most are not sure where to begin and how to make systematic changes. The University of Tennessee researched this challenge and incorporated the lessons it learned to outline a systematic model to improve outsourcing as a business practice. This model is called Vested Outsourcing because the core principle is to create an outsourcing relationship where companies and service providers become "vested," or mutually committed to each other's success, creating the true win-win solution that goes beyond the mere feel-good lip service often espoused in the first blush of a new agreement. The findings of the University of Tennessee's research are embodied in five key rules. When applied to a business outsourcing practice, the Five Rules (reviewed in chapter 2 ) will transform outsourcing relationships,