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Forget outsourcing, go multisourcing: Gartner

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CIOL Bureau
New Update

CANNES: Outsourcing has become such an integral part of successful business practice that many organisations are embarking on such relationship almost without thinking. Gartner has warned against such compulsive outsourcing and advised organisations to begin a more disciplined approach to multisourcing in order to achieve business growth and agility.

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Building a successful sourcing operation requires a new approach that goes beyond the traditional view of outsourcing. "Companies really need to adopt a new approach, something Gartner calls multisourcing, if they are to continue to realized the benefits of outsourcing in the future," said Linda Cohen, vice president and distinguished analyst.

Cohen has co-written Gartner's new book Multisourcing: Moving Beyond Outsourcing to Achieve Growth and Agility with fellow Gartner sourcing expert Allie Young, which was released at the recently held Gartner Symposium/IT expo held in Cannes, France.

Multisourcing is an innovative discipline that takes organisations beyond "quick-fix" cost cutting to enable capability building, global expansion, increased agility and profitability, and competitive advantage. As such, multisourcing requires a new mind-set and frameworks for communicating, interacting with, and overseeing service relationships both inside and outside the organization.

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However, before companies are ready to adopt this approach, they need to put an end to compulsive outsourcing. "Chaotic and compulsive outsourcing creates as many challenges as it solves. Furthermore, in many cases, the problems are caused by the immaturity of the organization's sourcing practices rather than being the fault of the service provider," said Cohen. "Organisations learn too late that managing external services requires vastly different competencies than managing the same, internally provided services,” she added.

Central to a successful multisourcing approach is the creation of a sourcing strategy that is tightly linked to the overall business strategy and constantly monitored by an effective enterprise-wide governance system. "Companies need new approaches to sourcing strategy, sourcing governance, sourcing management, service provider selection and service measurement," said Cohen.

Cohen concluded by saying that to move beyond outsourcing to multisourcing companies need to have an integrated, holistic sourcing strategy across all services and focus efforts on creating sourcing governance appropriate to the organization and service needs.

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