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Choosing between Multisourcing and Single Service Provider

by: Sarah Joson

Monday, April 22, 2013 | Outsourcing News |

Multisourcing vs Outsourcing with a Single Provider

Most business owners tend to refer to their initial outsourcing contract - believing everything would still be applicable to their upcoming plan of hiring more providers or subcontracting other processes. Some probably feel that all providers are the same and that changing the contract will just consume more resources, even their time.

However, doing a competitive analysis of credible service providers can help clients know where their contracts stand in the market, and how they can improve them.

ISG-One.com shares five steps that can help clients gauge if it’s feasible to retain their initial contract or draft a new one before hiring more providers.  

Research on the things you would like to verify with the provider.
Avoid skimping on the details because once the contract has been drafted, it will be hard to go back and edit it as some clauses are dependent on one another. It will also affect the relationship during the negotiation phase as some providers might think that you often change your mind or you do not know what you really want.

Analyze if your firm has enough room for errors.

Being too confident with your selected service provider can be detrimental to the operation. Since they didn’t experience competitive tension, they might become negligent and lose sight of what they are supposed to deliver. Your current processes might undergo delays and strenuous transition, which is why you have to be sure right from the start that everything will go smoothly or that you are equipped with a contingency plan.

Take the initiative to study the latest trends.

Knowing what you have against what is going on can help you improve your business’ standing. By sending several providers invitations to present will give you a broader idea of what’s going on in the market today.

Reassess the strengths and weaknesses of your organization.
Without knowing the strengths and weaknesses of your internal team, you will fail to get enough information to negotiate and define the scope of your strategy. This will then prevent you from getting a good deal.

Consider the company-wide goals.
See to it that the strategy will add value to the company as a whole and not just a specific business unit. This will maximize your effort and budget, and will help the company grow.

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