Out-Law News | 09 Nov 2005 | 9:04 pm | 2 min. read
The firm warns that outsourcing has become such an integral part of successful business practice that many organisations are embarking on outsourcing programmes almost without thinking.
However, according to Gartner vice president Linda Cohen and Allie Young, author of Gartner's new book Multisourcing: Moving Beyond Outsourcing to Achieve Growth and Agility, firms would be better to avoid 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 organisation'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."
Gartner lists eight outsourcing myths that are undermining outsourcing success.
According to Cohen, building a successful sourcing operation requires a new approach that goes beyond the traditional view of outsourcing – hence multisourcing.
Gartner describes multisourcing as 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, it requires a new mindset and frameworks for communicating, interacting with, and overseeing service relationships both inside and outside the organisation.
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.
Firms looking to move beyond outsourcing to multisourcing must therefore have an integrated, holistic sourcing strategy across all services and focus efforts on creating sourcing governance appropriate to the organisation and service needs, said Cohen.
They should also make sure that in evaluating a provider's performance they measure and track the things that directly relate to business outcomes.
Finally, companies should also remember that multisourcing is about building a network of relationships, not just signing contracts.