What is Vested Outsourcing?

Vested outsourcing is a model of outsourcing that emphasizes collaboration and long-term partnership between the client and the service provider. Rather than focusing solely on cost savings, vested outsourcing aims to create value for both parties by aligning their goals and objectives.

Key Components of a Vested Outsourcing Contract

A vested outsourcing contract should include the following key components:

• Shared Goals and Objectives: The contract should outline the goals and objectives that both parties share, as well as how they will measure success. This can help ensure that everyone is working towards a common goal.
• Performance Metrics: The contract should specify the performance metrics that will be used to measure progress against the shared goals. These metrics should be agreed upon by both parties before the contract is signed.
• Cost Sharing and Incentives: The contract should include provisions for cost sharing and incentives. This can help ensure that both parties have a financial stake in the success of the project, and it can also provide an added motivation to work together.
• Intellectual Property: The contract should specify how intellectual property will be managed, including who owns the rights to any proprietary information or intellectual property developed during the project.
• Termination Provisions: The contract should include provisions for terminating the agreement in case of a breach of contract, as well as a process for resolving disputes that may arise.

Crafting the Contract

Now that we have discussed the key components of a vested outsourcing contract, let’s look at how to craft one.

1. Define the Scope of Work: The first step in drafting a vested outsourcing contract is to define the scope of work. This should include a detailed description of the services that will be provided by the service provider, as well as any specific requirements or expectations that the client has.
2. Align Goals and Objectives: Once you have defined the scope of work, it’s time to align the goals and objectives of both parties. This should include a discussion of the business objectives that the project is intended to achieve, as well as how success will be measured.
3. Establish Performance Metrics: Next, you need to establish performance metrics that will be used to measure progress against the shared goals. These metrics should be specific, measurable, and agreed upon by both parties before the contract is signed.
4. Negotiate Cost Sharing and Incentives: Once the performance metrics have been established, it’s time to negotiate cost sharing and incentives. This can help ensure that both parties have a financial stake in the success of the project, and it can also provide an added motivation to work together.
5. Address Intellectual Property: Intellectual property should be addressed early on in the contract drafting process. This should include provisions for who owns the rights to any proprietary information or intellectual property developed during the project.



6. Draft the Contract: Finally, it’s time to draft the contract itself. The contract should be clear and concise, and it should reflect the nature of the partnership between the client and the service provider.