Speed Sourcing: The New Outsourcing Trend

First there was outsourcing. Now there’s speed sourcing. CIO says its a new trend that aims to cut costs and accelerate work by replacing traditionally long and drawn out negotiations with third-party providers in favor of quicker deals. Outsourcing consultancy EquaTerra says such deals can be made in three months or less. How does it work?

* Instead of conducting an exhaustive review of the vendor marketplace, the customer limits its search to Tier 1 providers, existing partners, or industry-specific specialists.

* Instead of developing a comprehensive RFP, the customer puts together a streamlined "request for services," which may look like this: We’re a financial institution in 10 countries with seven data centers in need of an outsourcing solution to reduce costs and capital expenditures.

* Instead of a detailed response, providers come back with high-level pitches: We can consolidate your IT operations over a period of two years for an estimated savings of 30 to 40 percent. Based on that, the customer selects a partner.

During a series of "deep dive" negotiation sessions, outsourcer and customer hammer out a signed contract. But the resulting document is markedly less detailed than most; it focuses solely on select must-haves like pricing, statements of work, key terms and conditions, and a high-level transition timeline.

The downside, of course, is that the lawyers and the people who have to sign off on the deals can be nervous when every "I" isn’t dotted and "T" crossed up front. Could this work for you? Read more about it, and ponder your own interactions with your outsourcing providers.

–Don Willmott

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