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.

There are currently 2 names in this directory beginning with the letter Z.

**Zero-based Sourcing**

The sourcing decision for each and every aspect of a business’s operation is rejustified every planning cycle from an assumed base of zero. This approach ensures that the organization is consistently and objectively re-testing its internal operations against the best available external solutions

**Zero-sum game**

In game theory and economic theory, a zero-sum game is a mathematical representation of a situation in which each participant's gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants. In outsourcing this means that where one party wins, the other one loses. If the total gains of the participants are added up and the total losses are subtracted, they will sum to zero. Thus, cutting a cake, where taking a larger piece reduces the amount of cake available for others, is a zero-sum game if all participants value each unit of cake equally.

In contrast, non-zero-sum describes a situation in which the interacting parties' aggregate gains and losses can be less than or more than zero. A zero-sum game is also called a strictly competitive game while non-zero-sum games can be either competitive or non-competitive. Zero-sum games are most often solved with the minimax theorem which is closely related to Nash equilibrium.

It should be noted that, if one of the parties to the outsourcing engagement applies a zero-sum game approach, there will be no form of productive collaboration. In such case the negative factors of collaboration, which we refer to as collaborative inertia, will get the upper hand. Collaborative inertia is characterized by endless discussions, lengthy email exchanges, slow decision taking and execution, stalemates, unproductive meetings and lack of participation. The opposite if collaborative inertia is collaborative advantage which is characterized by good personal relationships, quick decision taking and meaningful action, shared resources and innovative solutions, productive meetings, shared information and personal engagement.

In contrast, non-zero-sum describes a situation in which the interacting parties' aggregate gains and losses can be less than or more than zero. A zero-sum game is also called a strictly competitive game while non-zero-sum games can be either competitive or non-competitive. Zero-sum games are most often solved with the minimax theorem which is closely related to Nash equilibrium.

It should be noted that, if one of the parties to the outsourcing engagement applies a zero-sum game approach, there will be no form of productive collaboration. In such case the negative factors of collaboration, which we refer to as collaborative inertia, will get the upper hand. Collaborative inertia is characterized by endless discussions, lengthy email exchanges, slow decision taking and execution, stalemates, unproductive meetings and lack of participation. The opposite if collaborative inertia is collaborative advantage which is characterized by good personal relationships, quick decision taking and meaningful action, shared resources and innovative solutions, productive meetings, shared information and personal engagement.