Establishing a sourcing strategy
Organizations are increasingly moving away from the traditional 'sourcing for cost savings' to 'sourcing for value and competitive advantage', as sourcing becomes a fundamental element of an organization’s business and IT strategy. The optimum sourcing strategy should focus on retaining core competencies and areas which deliver competitive advantage, while strategically sourcing other activities for which there is neither the desired capability nor the strategic need.
However, establishing the right sourcing strategy is not easy and requires a careful investment of time and resource to weigh the following considerations:
- what is the overall value and benefit anticipated from the sourcing strategy? Typically a mix of benefits is desired ranging from increased shareholder value, reduced costs and improved predictability and control, to access to innovation and the ability to share risks with suppliers
- ensuring that the sourcing strategy supports the entire business and is not focused on benefits delivery in just one area
- understanding the benefits that can be delivered in-house by improving the organization’s own performance and capabilities
- balancing the business benefits and risk profile for each option.
In PA’s experience, there is no 'one-size-fits-all' approach. We help our clients to shape their sourcing strategies to reflect their unique business position, needs and capabilities including appetite for risk. Our approach involves assessing a range of options including:
- retaining functions in-house or outsourcing
- establishing short-term or strategic solutions
- re-engineering existing functions or establishing shared service centers
- using local or low-cost off-shore locations.
By leveraging our unrivalled knowledge of the sourcing market place and our independence from all aspects of the IT supply chain, PA can recommend the most appropriate sourcing solutions that are in the best interests of our clients. Our recommendations are always practical and realistic. We use our extensive experience of implementing sourcing arrangements to anticipate common pitfalls and overcome resistance, thereby maximizing the benefits to our clients.
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