Enterprises urged to seek new approach

London, UK: Organisations across the board- from financial services, retail and right through to the pharmaceutical sectors, are being urged to think carefully before embarking on a traditional sourcing approach. Orbys Consulting, the sourcing advisory company recently awarded ‘UK Outsourcing Advisor Top Honours Overall’ in the ‘Black Book of Outsourcing - Outsourcing Advisor Report’, advises that alternative approaches to deliver the necessary speed and robustness of outsourcing services should be considered first, and that they have in fact already been used successfully in the market place.

“At the same time as the outsourcing of services is becoming more and more complex, CIOs and CFOs want everything done more quickly. The result is that the traditional Request For Proposal (RFP) approach is now failing to provide the speed and quality required by both customers and vendors”, says Andrew Burgess, Consulting Director with Orbys. “Firms need to think carefully before embarking on a traditional sourcing approach when time pressures and market conditions may work against each other to deliver an outcome that neither party wants.”

Orbys believes a new approach to outsourcing procurement is required. This approach should satisfy the need to deliver outsourcing benefits quickly but it should also build strong relationships with the vendors early on, closely matching customer and vendor expectations through a highly interactive process, with no surprises once contracts have been signed.

An ‘accelerated sourcing approach’ can provide significant advantages in terms of faster delivery of outsourcing benefits and much higher quality of services through better scope definition and a productive vendor relationship. Orbys recently ran this process for a global manufacturing company. It needed to quickly but robustly source a systems integrator to implement a new global SAP platform for one of its major divisions.

The accelerated process got the company to a Board decision within three months. The successful vendor had a very good understanding of the scope and was able to demonstrate and build strong working relationships with the project team. Each potential vendor brought innovative approaches to their proposals, and the majority of assumptions and ambiguities were eliminated during the process. Both the successful and unsuccessful vendor praised the approach for its openness and interactivity.

Despite the need to deliver tangible savings on outsourcing programmes, the increased complexity of the business environment means that compromises are often made in the process. “On the one hand there is the need to deliver the expected outsourcing benefits as quickly as possible. Many outsourcing deals are predicated on cost reduction. By the time the business has agreed outsourcing is the right approach, the time remaining to implement it can be very short. On the other hand, the inherent maturing of the outsourcing market has led to a much more complicated world that places far greater demands on the business, the procurement team and the vendors”, says Burgess. As such, Orbys Consulting advocates the ‘accelerated sourcing approach’ and would urge enterprises to consider this new approach.