Thursday, March 11, 2010 |
Sole sourcing gives outsourcing buyers the opportunity to negotiate, define, and purchase services from a single provider – thereby making it easier to keep track of performance metrics and mitigate risks. This has become more than a viable option as outsourcing providers expand their service capabilities across multiple platforms and, in many cases multiple offshore outsourcing locations – eliminating the need for multi-vendor approaches.
While sole sourcing can potentially decrease costs and enable a more efficient decision-making process, like any sourcing model, it comes with its own challenges. Outsourcing giant, Everest Group, outlines 3 steps that a buyer can take in order to ensure a successful sole sourcing partnership.
The first is to carefully define the buyer's objectives and the services required. This is also a critical step in ensuring outsourcing creates value and that strategies are aligned to help the client business grow.
Second on the list is establishing a framework that helps both parties know when the proposed solution is acceptable. Although process improvement and innovation are big factors that can potentially be the difference between a good contract and a highly successful one, cost-efficiency still rules the industry. As such, the framework will almost always come down to financial feasibility and profit margins.
Lastly, a foundation must be laid for the two organizations to productively govern the implementation and ongoing execution of the solution. This will help ensure that both the buyer and supplier not only possess the drive to produce increased performance, but know exactly how to forge a productive working relationship.
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