Keeping the Peace: The Need for Provider Agreements in a Multi-sourcing Environment

A new report from the benchmarking, sourcing and transformation advisory firm, Alsbridge Inc., describes the need for provider agreements in a multi-sourcing environment.  

According to the report from Alsbridge, multi-sourcing – an environment where a customer uses several service providers to provide a single scope of outsourced services – has become the norm in outsourcing agreements today.

“For the past 10 years, customers have been more interested in a multi-sourcing environment than having a single provider deliver an entire scope of services,” explained Alsbridge CEO, Chip Wagner. “However, his model presents both terrific advantages and serious challenges. One of the largest challenges of multi-sourcing is that it requires services providers to cooperate with one another on an operational level.”

To mandate service provider cooperation, Alsbridge recommends customers have a multi-provider, “Cooperation and Accountability Agreement,” which should include multi-provider service levels, drive coordination in achieving transition and transformation, an overarching confidentiality structure, a multi-provider governance structure and a description of the liability exposure among the services providers.

“Despite its importance, customers in a multi-sourcing environment often ignore the need for contractual documentation that will ensure all service providers in the same operational or technical domain ‘play well together’,” Wagner explained.

In their report, “Keeping the Peace: The Need for Provider Agreements in a Multi-sourcing Environment,” Alsbridge further outlines the need for a provider agreement in a multi-sourcing environment as well as a blueprint that outlines what should be included in the agreement.

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.

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