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 ISGIndex 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 i.e., “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.
About the authorDinesh is a highly experienced and well-respected advisor in the outsourcing industry with more than 23 years of experience in management consulting and outsourcing. He works with enterprises to craft sourcing strategies, structure and negotiate complex sourcing transactions and design and implement sourcing governance organizations. Prior to joining ISG, Dinesh worked with Infosys and Accenture, where he led large transition programs and consulted on IT strategy and implementations, business process-reengineering and operational improvement programs. He is a published thought leader and a regular speaker at industry conferences. Dinesh manages the ISG India Business.
