Traditional competitive procurement methods are being replaced by a more collaborative approach in the outsourcing industry. Companies are now making working with their service providers to achieve mutually agreed desired outcomes their priorities. This practice is called "Vested Outsourcing" as it aligns the success of the service provider with the economic and other success of the client's business. Under this, the service provider is challenged to apply brain power along with even investments sometimes, giving them a more direct involvement in the partnership.
Companies are moving beyond viewing their IT providers as a commodity that only provides IT services such as Applications Management and Hosting to making them a true strategic arm of the business that helps increase market share and competitive advantage. The IT industry, however, lags behind in implementation of this trend. Thus, an in depth look into pricing model, governance structure, performance metrics and overall relationship trust levels is the need of the hour.
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