Wednesday, August 21, 2013

Six Keys to Success in a Multi-Sourced Ecosystem: Right Sourcing 101 & 102 by guest bloggers Randy Vetter and Beth Anderson

Embarking on a new sourcing relationship is a more complex endeavor than ever before. Multi-sourcing, hybrid in-sourcing and shared service structures all make for a diverse and highly interactive environment that demands operational alignment among stakeholders, collaboration and innovation. There was once a time when cost savings was the singular focus of a sourcing strategy. However, today’s sourcing strategies are focused on innovation and agility, access to specialized skills and an ability to focus company resources on core strategic priorities such as superior business alignment and areas of competitive differentiation. The focus today is on “Right Sourcing.”

This new focus on right sourcing brings added intricacy to the nature and breadth of organizational change and transition planning that is required for enduring sourcing relationships in a multi-sourcing eco-system. No longer are the right scope, right business case, right provider(s), and right contract sufficient for success.  Now it is the right operating structure, vendor management framework and contract simplification that are drivers of sourcing effectiveness.

In Alsbridge’s experience, many clients are surprised by the amount of internal organizational change management, transition planning and execution needed to make the multi-sourcing strategy both productive from the start and sustainable into the future. It takes active and focused preparation in six key areas to achieve a successful initial transition and a viable relationship that achieves planned business case benefits, including:
  • 1 - Transition Management
  • 2 - Communications Management
  • 3 - Organization Redesign
  • 4 - Vendor Management
  • 5 - Operational Alignment
  • 6 - Service Management

There is a lot to consider when right-sourcing functions and resources. Your organization will need to be able to ask and answer several interrelated questions that will be paramount to your future success. This two-part series from Alsbridge addresses each of the following questions in order to help set you on the right path:

  1. What should our plan to transition and transform functions, knowledge, tools, people, projects and processes to our new hybrid sourcing model look like?
  2. How do we prepare our people for the change and the opportunity the change represents?
  3. When and how do we communicate what these changes mean for our organization to individual team members?
  4. What operational components should we retain for non-sourced functions?
  5. How should the retained organization be structured?
  6. How do we select and prepare members for their changing roles?
  7. How do we align our new organization and its established processes with the internal shared services functions, insourced functions and outsourced processes to achieve the desired outcomes for the business?
  8. How do we manage and optimize the new multi-provider relationships to achieve the promised results, incentivize cooperation among providers and to support the business strategy?
  9. How will multi-sourcing change the process of engaging with our business customers?
  10. What should we do to improve the provisioning of services and to better align IT services with business
Organizations contemplating an right sourcing decision, a transition to a new provider, or an hybrid sourcing situation, are faced with a need for transition and internal change planning and execution to begin (or end) the relationship on sound footing. Some may not have either the capability (know-how, discipline, skill set, deep experience), or the capacity (cycles, time beyond managing their day job), to effectively design and execute the necessary detailed plans. 

The experience of an external advisory firm can better ensure that multi-faceted plans are comprehensive and, because of the advisor’s intellectual property, are put in place more quickly and cost-effectively. However, whether you seek the assistance of an experienced third party sourcing advisor, or decide to ‘DIY’ (do it yourself), the preparation described in this two-part series needs to be done, and done thoroughly, to reduce transition risk and lead to successful sourcing relationships.
Randy Vetter, Director, Alsbridge and Beth Anderson, Managing Consultant, Alsbridge

Six Keys to Success in a Multi-Sourced Ecosystem: Right Sourcing 101
Six Keys to Success in a Multi-Sourced Ecosystem: Right Sourcing 102