12/2/2009
Negotiating Good Outsourcing Outsourcing
Arrangements
Eric Walden
Texas Tech University
eric@ericwalden.net
Jabez
Stone
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Mr
Mr.
Scratch
First Part of Contract
2
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Last Part of Contract
3
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The Frustrated CIO
Mr.
Vendor
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First Part of Contract
of Contract
Last Part of Contract
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50% Robinson and Robinson
and
Iannone
70% Overby
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80% Gartner
$100,000,000,000.00
X 80%
X 80%
X 1%
X 30%
X 30%
= $240,000,000.00
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Why?
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Costt of Service
Less Flexible
More Flexible
More Flexible
Quantity of service
10
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Flexibility is Possible
Costt of Service
Client
Possible Contract
Vendor
Quantity of service
How do you make more money in a corporate job?
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Move up in your company
$100,000 $90 000
$90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Move to a bigger company
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Move to a different industry
What do you have to do to get
do to get promoted?
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Flexibility is Possible
Costt of Service
10%‐0% Contract
Client 5% Contract
Vendor
Year 1 Year 2
Quantity of service
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