Next big thing: multi-sourcing

Dissatisfaction with traditional outsourcing relationships is changing the way enterprises and their service providers do business. It’s become more common to treat functions such as IT as a portfolio of activities, some of which can be outsourced to a variety of providers while others are brought in-house.

Problems with the price, service or quality of a service provider can cause serious damage to a business if it relies on that one company across the board. If the decision is made to change provider, the upheaval can be severely detrimental to the running of the company, meaning that businesses are effectively tied to their outsourcing providers.

Rather than leave themselves exposed in this way, it may be wiser for management teams to spread the risk across multiple providers, while being careful not to
create an administrative maze for themselves in managing too many contracts.

According to IT services company Datacraft, today’s sophisticated clients want service providers to present them with a ‘comprehensive range of modular offerings that allow
them to engage at whichever level they are comfortable’.

In the multi-sourcing utopia, new services, transparent pricing models and upfront agreements will become the order of the day, or so the theory goes.

 

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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