Executive Briefings

Your Choice: A Single, Integrated Supplier or Multi-Sourcing

The emergence of information technology outsourcing in the 1980s and business process outsourcing in the 1990s saw U.S.-based firms strike a slew of mega deals. At the outset, buyers felt secure in outsourcing services to name brand suppliers with access to capabilities and resources. So it was natural that they turned to that supplier for a large scope of services--the integrated supplier approach.
However, as the market digested these deals and buyers became more comfortable with the concept of outsourcing and offshoring business functions, a new trend of smaller deals for specific areas of opportunity with specialists and niche players emerged, creating an increased number of multisourcing solutions in the marketplace.
Proponents of the integrated supplier approach point out the benefits of reduced governance cost, avoidance of complexity, end-to-end accountability, scale advantages, and integration. The hot new trend is multisourcing and proponents are pointing out the value of matching supplier capabilities to specific needs and reducing the risk of being completely dependent on a single supplier.
Source: Outsourcing Journal, http://www.outsourcing-journal.com/sep2008-everest.html

The emergence of information technology outsourcing in the 1980s and business process outsourcing in the 1990s saw U.S.-based firms strike a slew of mega deals. At the outset, buyers felt secure in outsourcing services to name brand suppliers with access to capabilities and resources. So it was natural that they turned to that supplier for a large scope of services--the integrated supplier approach.
However, as the market digested these deals and buyers became more comfortable with the concept of outsourcing and offshoring business functions, a new trend of smaller deals for specific areas of opportunity with specialists and niche players emerged, creating an increased number of multisourcing solutions in the marketplace.
Proponents of the integrated supplier approach point out the benefits of reduced governance cost, avoidance of complexity, end-to-end accountability, scale advantages, and integration. The hot new trend is multisourcing and proponents are pointing out the value of matching supplier capabilities to specific needs and reducing the risk of being completely dependent on a single supplier.
Source: Outsourcing Journal, http://www.outsourcing-journal.com/sep2008-everest.html