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Comparing the why, what and how of performance-based and Vested outsourcing models in CRE

Author

Listed:
  • Vitasek, Kate

    (Faculty member, University of Tennessee, USA)

  • Flynn, Michele

    (SIREAS, LLC, USA)

Abstract

The concepts of Vested outsourcing® (as developed by University of Tennessee [UT] researchers) and performance-based contracting have significantly gained in popularity as more and more corporate real estate (CRE) organisations look to increase the value of their outsourcing relationships. This paper builds on ‘Choosing the right sourcing model for CRE outsourcing agreements’ which was featured in Corporate Real Estate Journal (CREJ) Vol. 7, No. 3 by providing a comparison of performance-based and Vested models. Both models share many of the same principles such as focus on the supplier’s expertise and considering value above ‘price’. However, performance-based contracts and vested are distinctly different in their focus, application, methodology and resulting relationships. This paper explores the similarities and major differences between these two proven approaches. It also provides guidance relative to when to use each model.

Suggested Citation

  • Vitasek, Kate & Flynn, Michele, 2018. "Comparing the why, what and how of performance-based and Vested outsourcing models in CRE," Corporate Real Estate Journal, Henry Stewart Publications, vol. 8(1), pages 33-52, September.
    • Handle: RePEc:aza:crej00:y:2018:v:8:i:1:p:33-52
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    More about this item

    Keywords

    sourcing; sourcing business models; real estate; facilities management (FM); outsourcing; Vested outsourcing; performance-based; outcome-based;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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