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Multisourcing - A Blueprint for Successful IT Sourcing

May 22, 2008
To succeed in today's business environment, there is an increasing reliance on the creation of more innovative and holistic sourcing strategies that cater to all the businesses' requirements both in the short and long term.

The heartening news is that provided your organization possesses the internal capabilities and governance disciplines that a Multisourcing strategy necessitates, you can expect to reap dramatic rises in business value obtained from IT, through this approach.

This article examines current sourcing trends, delivers perspectives on what forms an innovative IT sourcing strategy and discusses some of the major advantages and challenges linked with transforming from a single source model to a multi-vendor model.

The IT Services market appears to be going through a fundamental shift. Dynamics within the marketplace are fuelling rapid changes in the way the enterprise acquires and builds up services - from both internal and external providers.

Increasingly, the previously biased worlds of "big deal" outsourcing and "buy/insourcing" are combining into a single broad market most commonly referred to as "strategic sourcing" or "Multisourcing". In such a model, clients try to merge the best of the "big deal" outsourcing and the "in source" models to wipe out their negatives.

In an attempt to achieve further competitive advantage, companies are deciding to retain certain key functions in-house and employ top-class Service Providers to carry out specific functions. But will the Multisourcing approach stand the test of time or is it nothing more than a brief industry fad?

The widespread view - on the part of clients, Service Providers and analysts alike - is that the fully outsourced and fully insourced markets are dwindling - and will remain to do so. All the signs point to the fact that the sourcing environment is at its most inviting, in the use of outsourcing and offshoring as service delivery models.

Besides, the more organizations outsource and offshore to Service Providers, the more Multisourced the market becomes. Organizations, therefore, need to look at Multisourcing as a serious way of conducting business moving ahead.

Service Providers' experiences in the market over recent years, proves to be further testament to the evolution occurring within the sourcing marketplace. Service Providers report a fundamental swing in client behavior. For example, clients are increasingly choosing to execute some traditionally-outsourced functions themselves, particularly those processes they consider strategic or crucial to their strategy.

When interacting with their Service Providers on specific functions, clients require services to be catered to their unique business needs and integrated more closely into their service delivery models. Service Providers report a rising expectation on the part of clients for them to be lenient to share the responsibilities and risks related with the initiatives they are associated with. Clients also refrain from traditional contracts and engagement models in search of more flexible and sometimes, highly customized alternatives.

There are lots of key indicators that suggest that Multisourcing has a long term future. Many of clients are approaching their Service Providers proactively, and conveying that they are looking to shape up new service delivery models and new sourcing strategies. They aspire to work with their Service Providers in a different way - in a more partnership-style model. Multisourcing definitely seems to be the way to move forward.
About the Author
Datacraft is the leading independent IT services and solutions company in Asia Pacific. Datacraft combines an expertise in networking, security, Microsoft solutions, storage and contact centre technologies, with advanced skills in consulting, integration and managed services, to craft IT solutions for businesses.
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