Build a Successful Sourcing Strategy by Answering These 10 Questions

Global advisory and benchmarking firm, Alsbridge, Inc., today announced a method that is helping organizations determine if they are mentally, corporately and organizationally prepared to do what is necessary to create a successful sourcing strategy.

“To many times, we’ve seen clients who did not take the time to consider what lies ahead of them in the road to sourcing,” said Ben Trowbridge, CEO, Alsbridge, Inc. “It can cost millions of dollars in lost savings through delays as management decides whether they were ready to outsource a particular function.”

According to the report, not all of these 10 keys to building a successful sourcing strategy need to be answered before you begin the planning process, but they should be answered by the time you complete your sourcing cost/benefit analysis.

1. Management Commitment - Are your executives at the highest levels committed to moving ahead should the business case, quality and time-frame to source be compelling?
2. Organizational Readiness - Is our organization ready culturally, operationally and strategically to change the way services are delivered today? Can our business environment accommodate a third party delivering the services we provide to the business? Perhaps from India or China? From a different culture? (If not ready, you can help your organization through the process by leveraging change management techniques that have been proven to work.)
3. Determine Scope - Many components of information technology, finance and accounting, human resources, procurement, and/or knowledge processing activities can be outsourced. What scope must we absolutely keep in-house? Why that particular scope?
4. Baseline Current Cost - Can we account for all our related delivery costs, not just what we have in our “budget"? If we don’t do this, how will we know whether we can save the company money with a new approach?
5. Develop Initial Criteria to Build List of Potential Candidates - Can they deliver what we need? Do they provide meaningful Service Level Agreements (SLAs)? Do they have industry experience we can leverage and good references?
6. Create a Practical RFP - Put in writing the scope to be outsourced, sample terms and conditions, and SLAs. How does the provider map their capabilities to meet our business objectives, sourcing objectives, scope objectives?
7. Look Them in the Face - Check them out on their own turf in a site visit. What capabilities do they really have? Ask the provider staff who are not engaged in the visit how they adhere to the processes that the tour guide is suggesting.
8. Check ‘em Out - Seek relevant references. What is their track record for successfully delivering similar work of a similar size to a similar industry? To another industry?
9. Establish Meaningful Selection Criteria and a Rock Solid Evaluation Method - What quantitative and qualitative criteria will we use to select the winning provider? What method will we use to ensure that we judge each provider fairly?
10. Be Honest - Does our team have the discipline, experience and time to do this properly? If not, seek a qualified outside sourcing advisor with a proven track record, practical methodology, and deep information databases.
    

“There are many more questions you need to ask yourself as you move toward solidifying your sourcing strategy,” Trowbridge explained. “This is just the beginning. Going down this path is not trivial nor for the faint of heart. If you choose to outsource, it can take several months to get to contract. The sooner you begin, the closer you are to the answers. The closer you are to the answers, the quicker you’ll realize the potential savings.”

For more information on creating a successful sourcing strategy, please visit: www.outsourcingleadership.com

About Alsbridge Inc.

Alsbridge provides world class sourcing advisory and benchmarking services for the CIO, CFO and CPO.  We’ve helped hundreds of companies reduce costs and get more value from their vendors.  Our experienced consultants leverage proprietary tools and information databases to identify and engage the optimal vendors for your situation, negotiate best practice terms at fair market prices, and improve the way you work with your vendors.  Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, hardware and maintenance, network services, software and maintenance, application support and development, business processes and cloud services. This commitment to delivering value to our clients has made Alsbridge a distinguished member of the 2010 Inc. 500 fastest growing privately held companies in America.  This year, Alsbridge was ranked the #1 outsourcing advisor in the world by the International Association of Outsourcing Professionals (IAOP).