Leading global sourcing advisory and benchmarking firm, Alsbridge Inc. today announced a new report which reveals how re-evaluating the sourcing strategy may be beneficial for both the customer and the provider, and some key points that need to be considered while doing so.
When an organization decides to outsource their IT and the initial mandate for change comes down, the senior management team often with the assistance of a third party advisor, create a sourcing strategy for executing the new approach. The strategy involves decisions regarding reasons to outsource, operations that are best fit to outsource to an outside provider, their cost impact, the risks involved, internal weaknesses, and capabilities and capacity within the company to manage an outside provider through the entire process-from transition to the steady state.
Over time, as the contract starts running in a steady state, if the expectations regarding the sourcing relationship and the reasons to outsource have been met, changes to the sourcing strategy remain unaltered. However, its important to point out here that complacency can be the destruction of a good sourcing strategy practice.
“While re-evaluating a company’s sourcing strategy, it is not necessary to switch providers. In some cases, it may be in the company’s best interest for the provider to be involved in the change.” says Alsbridge Inc. CEO, Ben trowbridge. “In fact, the provider may welcome the change for its own economic benefit, as well your own.”
The major points that require consideration while formulating a Sourcing Strategy are:
- Sourcing strategies should be constantly evolving
- The goals and scope from the initial development of the sourcing strategy may have changed over time
- Sourcing strategies may involve collaboration with a single provider or multiple providers
- Changes in the company’s sourcing strategy may benefit the provider as well as the customer
- A change in the sourcing strategy may involve just minor adjustments in provider delivery requirements (e.g. loosening SLAs)
- Changes in technology delivery may impact sourcing strategy approach
- Be prepared to explore shared services or insourcing options
- Be prepared to have the capabilities and capacity to support the company’s sourcing strategy
The key point however, is that continuous improvement applies to the company’s sourcing strategy as much as it does to the provider’s operations.
For the complete report go to Sourcing Strategy Check-up: The Need for Re-evaluation.
About Alsbridge Inc.
Alsbridge provides world class sourcing advisory and benchmarking services for the CIO, CFO and CPO. We’ve helped hundreds of companies reduce costs and get more value from their vendors. Our experienced consultants leverage proprietary tools and information databases to identify and engage the optimal vendors for your situation, negotiate best practice terms at fair market prices, and improve the way you work with your vendors. Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, hardware and maintenance, network services, software and maintenance, application support and development, business processes and cloud services. Alsbridge was ranked the #1 outsourcing advisor in the world by the International Association of Outsourcing Professionals (IAOP) based on the value delivered to clients. This commitment to delivering value to our clients has made Alsbridge a distinguished member of the 2010 Inc. 500 fastest growing privately held companies in America.