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 32 names in this directory beginning with the letter T.
Travel and Expences

Tactical Outsourcing
Outsourcing to achieve operational efficiencies. Tactical outsourcing is approached as a competition between existing internal operations and outside service providers

Temporary Duty (TDY)
Temporary Duty (TDY) refers to a set of rules governing allowances for travel and accommodation

An aspect of the outsourcing contract's Terms and Conditions. The parties must agree and set out the basis for any termination of the agreement. This will usually only be for situations where one or other is in breach or default of its obligations as specified in the agreement. This clause will set out what notice is required to be given to the other party and will generally allow a period for the default or breach to be remedied before the other party is entitled to exercise remedies under the agreement.

Termination assistance
Assistance obligations of the service provider to the buyer during the termination of the contract to assist/facilitate the repatriation or transference of the services

Termination Charge
​The fees for termination of the contract, typical if the terminated early by the buyer for their convenience and not for cause (failure of the service provider to deliver on their contractual obligations)

Termination clause
Provision in a contract which allows for its termination under specified circumstances. Also called termination provision 

Termination for Cause
Termination of the contract by one party when the other party failed do deliver on their contract obligations to the extent that their terminations options were met

Termination for Convenience
​Termination of the contract by the buyer by their request where the service provider had not failed to deliver on their obligations and none of the other termination conditions were met

Termination for Force Majeure
Terminating of the contract for a force majeure event

Termination for Insolvency
Termination with the contract by one party when the other party business conditions meet the insolvency conditions

Termination for Material Adverse Change
The right of the buyer to terminate the contract when a business climate change of defined material significance has occurred 

Termination of contract
The cancellation of an outsourcing agreement. Usually, the terms for cancellation are spelled out in the contract as part of a termination clause. This clause protects both parties, since the desire to terminate by one party will severely affect the other. Most contracts require either party to notify the other within a specified period, such as three months. Failure to give adequate notice can result in severe financial penalties. Another aspect of the termination clause should be assurance of service provider assistance in transferring systems and data to an alternative site

Termination Right
The right of one party to terminate the contract if the termination conditions are met

A party being used to provide part of the services of a contract between the buyer and service provider. The third-party typically has only and obligation to one of the two parties and is not obligated via the contract between the buyer and service provider. The buyer or service provider who is using the third-party to deliver part of their obligation is responsible for performance of the third-party

Third-party beneficiary
A third-party beneficiary is a person or group of persons who benefit from the services provided under the engagement, without being an active party to the contract.

Time & Material Pricing
A mechanism where the service provider sets unit prices on the inputs to the services – e.g., labor hours, service calls, management fees, materials consumed – through a fixed schedule of rates. Unlike the cost plus approach, however, the service provider doesn't reveal his actual costs

Time & percent conventions
An aspect of an SLA that spells out how times and dates will be used throughout the SLA. It may express how time will be shown, what is meant by "business hours," and what is meant by "business days."

Total Contract Value (TCV)
The potential revenue associated with the transaction and estimated at the commencement of the contract (e.g., sum total of revenues accrued to the service provider from the transaction over the entire transaction term

Total Cost of Ownership (TCO)
Total operating costs of owning and operating an offshore operations that have reached steady-state. Includes base operating costs and amortized value of transition costs

Total cost strategy
Integrating global sourcing into the overall business strategy to obtain a low-cost advantage

Transaction cost
The management costs associated with coordinating, monitoring and controlling the delivery of products or services

Transaction cost theory
Developed by Ronald Coase in 1932 as part of a lecture given to students at the School of Economics and Commerce in Dundee, Scotland, then turned into a paper titled, "The Nature of the Firm." At its core is this notion: When a company tries to determine whether to outsource or to produce goods or services on its own, market prices aren't the sole factor. There are also significant transaction costs, search costs, contracting costs and coordination costs. Those costs frequently determine whether a company uses internal or external resources for products or services. This is the essence of the make-vs.-buy decision

Transactional pricing
Also known as "unit pricing." The client pays the service provider a flat fee per unit of work (order taken, application processed, sales call made).

Transform-transfer delivery model
Transform-transfer delivery model is characterized by transformation in process and/or technology before a service is transferred to the service provider

Changes and enhancement to a client environment post transmission to move them to a steady state of service delivery

Transformational Outsourcing
The process of effecting continuous strategic change and tying the results of the outsourcing initiative to strategic business outcomes. It is a collaborative, risk- and gain-sharing relationship among the organization and its service providers to drive enterprise transformation and achieve significant business process improvements

Moving of the outsourced services, processes or activities from the buyer to the service provider

Transition cost
Cost incurred in moving services, processes or activities from the buyer to the service provider. This includes stabalizing the work once moved to the service provider

Transition management
The detailed, desk-level knowledge transfer and documentation of all relevant tasks, technologies, workflows and functions

Transitional outsourcing
Outsourcing that involves the migration from one platform or mode of operation to another. It consists of three phases: management of the legacy system; transition to the new platform or system; and stabilization and management of the new platform

Trust / Trustworthiness
Trust is a critical element in every business relationship as it affects every personal interaction. When there is trust people can put all their energy in realizing the objectives of their association. If there is mistrust things slow down and energy is lost with monitoring and controlling each others contributions. When there is a lack of trust, communication is exhausting, time-consuming and often ineffective with words and motives being questioned.

Trust however is not a matter of blind deference, but of placing – or refusing – trust with good judgement. Trust should only be given to those who have demonstrated to be trustworthy and not to the ones who are untrustworthy. So what matters in the first place is not trust, but trustworthiness and the ability to judge the trustworthiness of business partners with respect to their contribution to the engagement

When judging someones trustworthiness we should look for 3 attributes
• Are they competent?
• Are they honest?
• Are they reliable?