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Comparing the why, what and how of performance-based and Vested outsourcing models in CRE
Corporate Real Estate Journal,
8
(1),
33-52
(2018)
Abstract
The concepts of Vested outsourcing® (as developed by University of Tennessee [UT] researchers) and performance-based contracting have significantly gained in popularity as more and more corporate real estate (CRE) organisations look to increase the value of their outsourcing relationships. This paper builds on ‘Choosing the right sourcing model for CRE outsourcing agreements’ which was featured in Corporate Real Estate Journal (CREJ) Vol. 7, No. 3 by providing a comparison of performance-based and Vested models. Both models share many of the same principles such as focus on the supplier’s expertise and considering value above ‘price’. However, performance-based contracts and vested are distinctly different in their focus, application, methodology and resulting relationships. This paper explores the similarities and major differences between these two proven approaches. It also provides guidance relative to when to use each model.
Keywords: sourcing; sourcing business models; real estate; facilities management (FM); outsourcing; Vested outsourcing; performance-based; outcome-based
The full article is available to subscribers to the journal.
Author's Biography
Kate Vitasek is a faculty member for Graduate and Executive Education at the University of Tennessee’s Haslam College of Business Administration. Her award-winning research has been featured in six books including: ‘Vested Outsourcing: Five Rules That Will Transform Outsourcing’ and ‘Vested: How P&G, McDonald’s and Microsoft are Redefining Winning in Business Relationships’. Her most recent book, ‘Strategic Sourcing in the New Economy: Harnessing the Potential of Sourcing Business Models for Modern Procurement’, has been widely endorsed by some of the most progressive procurement leaders across the world.
Michele Flynn is visionary and expert in the fields of outsourcing, facilities management, real estate and governance. She serves as executive chairman for SIREAS, LLC, working directly with clients to provide vision, strategy and guidance. Michele was the founder of Expense Management Solutions, where her leadership and expertise were integral to the development of performance based contracting for global outsourcing relationships in corporate real estate and administrative services. Her 25+ year career has made her a subject matter expert and sought-after speaker on subjects ranging from third party risk management, corporate real estate, corporate procurement and risk and compliance.
