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.
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
- 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
- Changes in technology delivery may impact
sourcing strategy approach
- Be prepared to explore shared services or
- 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
For the complete
report go to Sourcing Strategy Check-up: The Need for Re-evaluation.
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.