Outsourcing and Partnering Study Sheet

A collection of vocabulary flashcards covering key terms and concepts related to outsourcing and partnering from Chapter 12.

Outsourcing

The term for transferring business functions externally.

Escalation

The primary control mechanism for conflict.

Partnering charter

The document that results from team-building activities.

BATNA

Best alternative to a negotiated agreement.

Negotiation in projects

It cannot be viewed as a contest.

Fixed vs cost-plus contracts

Cost is set in advance vs established after completion.

Customer satisfaction formula

Perceived performance divided by expected performance.

Communication structure in outsourcing

Making sure communication is well structured to avoid confusion.

Key to fairness and cooperation in contracts

Fair and incentive-laden contracts.

Main disadvantage of outsourcing

Increased costs.

Difference between partnering and traditional approaches

Contracts in partnering establish long-term commitments, while traditional involves single project contracting.

Risk in long-term partnerships

Risk is eventually transferred to the other party is NOT an advantage.

Best practices in outsourcing

Should not involve short-term, no-pressure relationships.

Result of effective team-building

Increased understanding of collaboration barriers.

Key partnering practice

Access to each other's organizational resources.

Best method for avoiding schedule problems

Add a penalty clause to the contract.