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Choosing the right sourcing model for CRE outsourcing agreements
Corporate Real Estate Journal,
7
(3),
277-289
(2018)
Abstract
Modern outsourcing is more than a typical make– buy decision. Rather, there is a wide range of sourcing business models that today’s practitioners can choose from. Unfortunately, the fundamental nature of how goods and services are procured is not keeping pace with best practices of tapping into more mature sourcing business models; many business professionals wrongly assume that a transaction-based business model is the only way to architect a supplier contract. This paper provides an easy to understand framework for classifying the various contracting approaches along a sourcing continuum. A key goal of the paper is to help organisations not just understand the various models, but also learn when to use each model. The paper suggests an easy to follow ‘Business Model Mapping’ approach organisations can use to make the decision about what is the most appropriate sourcing business model for their situation.
Keywords: sourcing; sourcing business models; real estate; facilities management; outsourcing; Vested Outsourcing
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.
Ingrid Fenn is a highly accomplished corporate real estate and facilities management leader who has developed strategy and global portfolio platforms for a succession of major multinational corporations. Prior to starting up and leading SIREAS, she was Head of Global Real Estate for Covidien, a global health products leader. She is deeply experienced in emerging markets and navigating complex matrices of international laws and real estate practices. She currently works directly with the real estate and executive leadership of SIREAS’s corporate clients in designing strategic plans to cost-effectively meet their business goals. She manages SIREAS client engagement teams, and develops the third-party supplier and outsourcing relationships vital to helping manage clients’ portfolios and facilities.
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.
