Managing To An Outsourcing 2.0 Partnership Video

Either you are buying labor, and you carry the responsibility, you are managing the deliverables and our own value-add, which is not a great one if you are buying labor, is sort of supplying and hiring people. Or you are after a specific business result, that you can evaluate and understand what value it's for you. And you can articulate it and you can measure it. In that case the methodology is different. We'll take the risk, we'll take the leadership, we'll manage the people and we'll deliver the result and we'll sort of do all the other various things that will offset the risk of the project and retain the knowledge and allow us to manage the project correctly.[...] The customers that are talking like that when they're saying, ok we want something more out of that relation that pure labor arbitrage, we want the result, we want the vendor to take more risk, I've heard that a number of times. Do you think they really mean it, do you think they understand the implications of that fact that typically would that they would have to in a fact give up more control? [...] I think a lot of people are extremely interested in our value proposition, but it takes certain amount of education and commitment to be able to go the way that we are trying to pull everyone.

A lot of times people don't take on the account the fact that when the project is done by their own personnel and they are managing their incentives, their career path, when the project is done outside of the company, someone else has. There is almost no control. The situation in this case means that whoever is managing the labor also has to provide for the career path appropriate incentives if they are successful in order to minimize the turnover. If the relationship is purely off of the labor card, it's practically impossible. If the relationship is based around delivery of a specific result, and there is remuneration that's tied to that outside vendor, ourselves in this case, have a lot of other different means of retention on financial, where we share our own added value that we've derived from the project for being successful for the actual personnel to career path because we provide a lot wider range of services: business analysis, project management in this case, a methodology work that we're doing with the customer. So there are a lot more possibilities to grow.

Alec Miloslavsky
CEO, Exigen Services