Is multisourcing the way forward?

Gartner’s warning against outsourcing and its suggestion that multisourcing is the way forward raises two key questions. Why is outsourcing not working and why will multisourcing work?

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By  Angela Sutherland Published  November 14, 2005

|~||~||~|Gartner’s warning against outsourcing and its suggestion that multisourcing is the way forward raises two key questions. Why is outsourcing not working and why will multisourcing work? The research firm says outsourcing has become such an integral part of successful business practices that organisations are embarking on it without thinking. Gartner also says corporations should take a more disciplined approach to multisourcing in order to achieve business growth and agility.“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, which is multisourcing, if they are to continue to realise the benefits of outsourcing in the future,” says Linda Cohen, an analyst at Gartner. Multisourcing and outsourcing have the potential to take organisations beyond “quick-fix” cost cutting to increasing agility and competitive advantage. However, both these concepts require a discipline and framework for overseeing and successfully managing service relationships. Third party involvement in IT services is a big business. Managed services vendors are providing discreet outsourced IT functions or a cluster of processes, consolidating execution and supervision of those activities on a turnkey approach by using contingent workers. A managed service provider saves money for its clients and provides expertise in areas of IT that are rapidly changing. The concept of managed services is a growing discipline for a number of reasons. To begin with, there is a rapid rise in the number of organisations that provide services. They also develop an expertise in a particular IT realm, which enables them to deliver informed and reliable performance. Whether it is outsourcing or multisourcing, the concept will only work if end users know their exact business requirements, and services vendors are willing to meet those needs on time and within the allocated budget. Gartner is fair in saying that chaotic and compulsive outsourcing creates many challenges when the parties concerned are unclear of their roles. Like everything else, both outsourcing and multisourcing have their advantages and disadvantages; end users have to be savvy enough to exploit them to their advantage. ||**||

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