2018 is not the first time our industry has come under fire. It’s had a colourful history from tales of cost-cutting to ethical arguments around driving labour arbitrage. Outsourcing has often been misunderstood and the whole industry blamed when things go wrong. But with the recent, spectacular collapse of Carillion we are seeing a renewed attack from certain corners in relation to the “failure of outsourcing.” A grand, sweeping statement, but is there any truth in it?
The managed services market has been an interesting one to watch from a consultant’s point of view. There was a heavy trend towards outsourcing many key areas within IT, only for the pendulum to begin swinging to the other end of the spectrum where clients are now pulling some (or all) of those same services back in-house. Nevertheless, your organization is likely to use some level of managed services within the IT organization given constraints on budget, resources or expertise.
Avery W. Katz, professor of law at Columbia Law School, tackles the conundrum of “incomplete” contracts. The challenge? How organizations can fashion a contract that is both economically flexible enough for a business relationship to move forward efficiently and legally secure enough to satisfy the parties’ legal departments.
What has been the single most significant development to impact your profession or area of business during your career, and why?
Professors Helena Haapio and Thomas D. Barton are on a mission to educate organizations on how to create “business friendly” contracts – without giving up safety or security.
Outsourcing agreements come to an end, just as do some political treaties.
What can those steering the perils of partition learn from each other? There are few experiences as visceral as the turmoil of politics. As a British citizen, I have taken my part and cast my vote on 23rd June, 2016. The comparison of events since with recently managed outsourcing exits is the source of inspiration for this article.
Know The Rules
In the past, compliance risk was a top-of-mind issue among select industries: regulators appeared to have banking and financial services, along with energy and extractives, under a constant microscope. But as supply chains expanded across oceans and continents, and countries legislated regulations to address bribery and corruption, terrorist financing and human trafficking, compliance risk grew for all types of organisations. Now the pressure is on you.
"There has got to be a better way!" That’s the common lament from all aspects of the healthcare industry from providers, payers, and patients alike when talking about the relationship between those three parties. It not unusual to hear complaints like, “misaligned financial incentives”, the “tyranny of the 15-minute visit”, or it’s an “unsustainable system”.
Most businesses like to blame failed or protracted negotiations on an inability to reach agreement on the financials, contract terms, legal issues or some other business measure - but after 30 + years of contract negotiations experience, I’ve rarely seen a deal lost on these items. Negotiations are far more likely to falter due to lack of trust, or due to a weak relationship amongst the parties.
Professors Bengt Holmström (MIT) and Oliver Hart (Harvard) received the 2016 Nobel Prize in economic science in October for their work in the realm of contract theory and, most intriguing, the nature of contracts as being essentially incomplete.