Glossary of terms

This glossary is intended to assist you in getting a general understanding of commonly used terms and concepts when dealing with outsourcing and outsourcing governance. We welcome your contribution to further improve and expand the glossary.

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
There are currently 13 names in this directory beginning with the letter N.
Nearshore outsourcing
The transfer of business or IT processes to companies in a nearby country, often sharing a border with your own country.  For example, major near shoring locations for companies in the Europe include Western European counties, the UK and Central Europe. Nearshoring is a popular model for companies that don’t want to deal with the cultural, language or time zone differences involved in offshoring

Net / Web Sourcing
Outsourcing applications that run on the Web. Since the browser provides universal access to Web content and applications, an application can run on a third-party Web server as easily as it can on an internal Web server (intranet). TRAC by Leadmark, and are examples of these types of applications

Net Cost-Performance score (NCPS)
The Net Cost-Performance Score, or NCPS, is a single anchor for sourced services and third party relationships.

NCPS measures supplier performance and predicts engagement success. It provides a single top-level key performance indicator for sourcing initiatives across diverse portfolios. The value from using NCPS, flows from your focus on cost and supplier performance and ability to internally benchmark your sourcing initiatives. It enables you to improve supplier performance and optimize your sourcing portfolio.

NCPS helps you measure success along the way using a single key question; What percentage of cost goes to successfully delivered services?

NCSP is straightforward and easily understood by everyone from the corner office to the front line. It gives you a good prediction of long term success of the engagement and provides a touchstone for engaging your management in your sourcing initiatives. The economics of NCPS spring of the differences in behaviour of client organizations and service providers when dealing with strong and weak performing services.

Net Savings
The final annualized savings accruing to a buyer of outsourcing services. These savings are calculated by adding to the gross savings, the additional costs that get created and that a buyer must bear in the process of sending work offshore. Examples of these costs are setup and governance costs

NIH syndrome
Not invented here syndrome. A culture whereby organizations are loathe to execute on something that wasn't thought up internally or that can't be implemented internally

Non core Spend
Non-production goods and services that are not required to manufacture/deliver the final product/service but are required to operate the organization. Spend categories like facilities, office supplies, travel and logistics, contract labor, marketing/sales related spend, IT/telecom, etc. are typically classified as non core categories

Refers to an exclusivity clause in the contract whereby the parties cannot compete for the services

Refers to a contract clause whereby parties will have the option to compete

Non-performance penalties
The fines incurred by service providers when they breach service levels. The idea of including penalties in a contract are typically there to gain service provider executive attention in the case of non-performance

A contract clause by which parties agree not to solicit employees from each others' companies (non-poaching agreement)

Non-wage Direct Costs
Costs outside of wages that are directly incurred in the process of providing IT or BPO services by a service provider. Examples include software and telecom costs

Contractual term of communication of a demand, formal communication of contract communication that is identified in the contract to be communicated, typically notices are to be communicated in writing by hand, courier, fax or mail

The substitution of a new contract for an old one. The new agreement extinguishes the rights and obligations that were in effect under the old agreement.
A novation ordinarily arises when a new service provider assumes an obligation to pay that was incurred by the original party to the contract. In the case of a novation, the original service provideris totally released from the obligation, which is transferred to someone else. A novation also takes place when the original parties continue their obligation to one another, but a new agreement is substituted for the old one.