E-Sourcing Forum » Is Speed Sourcing for Speedy Results Feasible?

Is Speed Sourcing for Speedy Results Feasible?

September 23rd, 2009 at 09:32am TPI

By: Dinesh Goel, Partner, TPI

Speed sourcing is the industry’s new buzzword. Speed sourcing refers to the process of getting to outsourced contracts in timescales much shorter than the traditional approach.

Why now? Nothing has changed in the sourcing world except that the considerations and drivers for sourcing have adjusted radically in light of the macroeconomic environment. As reported by quarterly TPI Index reports and deal flow data, the buy side currently appears to be more focused on the short-term tactical sourcing than the medium- to long-term transformational large-scale contracts. This has led to a great degree of interest in exploring the possibility of condensing project timelines to help expedite the realization of anticipated benefits, apart from the reduced cost and effort of the contracting process.

Will this approach work under all situations? No. This approach will work in cases where the nature and scope under consideration are tightly defined and standardized (no elements of transformation or “shift and lift” requirements for immediate gain), service providers are well entrenched for the scope, the market is highly matured, and importantly, the client is matured in undertaking an outsourcing or offshoring program. All of these factors can help in shortening the process lead time with quick selection of service providers, the relatively straightforward process of securing proposals, and negotiations. In other situations, the time required for selecting service provider and contracting will be longer.

Does this mean there will be significant compromise somewhere? Potentially yes since you need to focus on many activities including two-way due diligence, obtaining clarity on scope and assets, a solid understanding of the solution proposed by the service provider – not just now but through the term of the contract – and the use of and agreement on a solid SLA framework.

Bottom-line: Speedsourcing can work in certain situations, and as a matter of fact, has also worked in the past before we had a name for it. However, there is no bypassing the fact that if you condense the time considerably, you will have to contend with missing out on specific elements that would have brought far greater clarity prior to inking the contract. You decide what to skip now and what you wish to deal with later. I welcome your thoughts and experiences.

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Entry Filed under: General, Outsourcing, Supply Management Best Practices

1 Comment Add your own

1. Deborah Gamble | October 6th, 2009 at 1:22 am

Novell recently outsourced their IT Department to ACS (soon to be Xerox). The speed at which that supplier selection, contracting and transition took place was baffling. Certainly, key to making such transitions work in our case included at least the following: 1) Dedicated internal staff pulled off from regular assignments for the project, 2) An experience consultant partner to assist us in making the outsourced transition, 3) A true outsourced PARTNER, committed to the project, with goals aligned to the outsourcing organization, and with some “skin in the game”.

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