Multi-sourcing does not spell the end for big deals

Pricking those multi-sourcing myths

There is rumour of a new solution in town called multi-sourcing, and it is the future.
While there is truth in the statement that outsourcing is more mature today than ever before, and that organisations are slicing up their service requirements and reducing contract durations, this does not mean multi-sourcing has taken over, or that it is the end of big deals.

While multi-sourcing ­ providing related service functions to multiple suppliers ­ is foremost in many minds, as a practice it has been a valid part of the outsourcing landscape since the early 1990s.

The real changes to the market since then are more centred on the realisation of the need to manage and collect benefits from any form of change. Not micro-managing or assuming that the service provider will take care of everything, but really managing at the right level to get the most valuable outcome for the user.
This realisation is yet to translate to a fully populated and adequately skilled workforce, but has spawned a developmental pressure on the outsourcing industry. With the creation of truly capable management tools comes the ability to focus on management for value, without the need to analyse anything but the capability and price point of a supplier.

There is no reason to enforce services being supplied by different organisations ­ there may be instances where it makes sense on the grounds of economics and performance, but this is not always true.

In my experience, any vague generalisation that the future is about multi-sourcing is misleading. The focus for the future is about using the capabilities of the services market to effect beneficial economic change ­ change that is sustainable and that adds to the competitiveness of companies. Whether one or multiple suppliers are used should not matter ­ what is at stake is deriving the greatest benefit through professional management.

Phil Morris is managing director at outsourcing consultancy EquaTerra