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The Pros and Cons of Sole Source Outsourcing Deals
By Tim Lloyd. Managing Partner, Alsbridge Plc

It seems obvious that any company thinking of outsourcing should follow a competitive procurement process. However, one of the issues for all organisations looking at outsourcing is whether to go through a competitive procurement process or whether to move directly to a deal with a single supplier.

Readers may be surprised that this is a common issue - wouldn't most organisations need to go through a demonstratively competitive process when contemplating a multi-million pound outsourcing deal for services which often go to the heart of their business? The answer is yes - many sole source deals are actually done, and high profile ones at that. One of the reasons for this is the effort that the major outsourcing suppliers put in to persuading clients that there is no need for a competition - in fact that a competition would actually be disadvantageous to the client.

This article will explain the advantages and disadvantages of sole sourcing. If the decision is to go sole source, then it is imperative that the client gets expert client-side advice on both the solution and the commercial terms - not to imply that the supplier isn't trusted, simply to recognize that their interests are not totally aligned, and that impartial professional advice can provide assurance that the deal really is as good as it looks. And of course, using a third party advisor will bring to the table the added benefits of current market pricing and deal shape information for comparison with the sole source offer.

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