Apr27The Fred PrinciplePosted at 07:46 in Leadership, Project Management, Risk Management

I'm attending a two days workshop on IT Cost Savings & Optimization. In the afternoon, David Baumann (our host) started using a statement I made during lunch break and - funnily enough - referred to it as "The Fred Principle": There is a direct correlation between the risk transferred to a vendor in an outsourcing agreement and the economic inefficiency of this deal. In other words, if you push it too hard on your vendor, you will just end up paying more than what you might have by insurring that risk yourself in the first place. The corollary David kept using during the afternoon session actually works in a similar fashion as Occam's Razor, but in the Outsourcing context: "How would I have done it if I had kept it?".