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 The "New Market Entry" Sole Source Option
White Paper |
Category: Provider Selection IT Infrastructure & Applications Finance & Accounting Services...
Sole source has gotten a bad rap over the years. Most companies associate sole source with overpriced, provider favorable deals defined by their low service levels. Current conventional wisdom in the sourcing industry advocates a multiple provider approach which encourages healthy competitive tension and client leverage by spreading around project among those providers who deliver the best overall value. Sole source therefore, is anathema to procurement departments raised on the holy grail of competitive processes. However, even the most ardent supporters of the competitive process agree, albeit reluctantly, that there are the two "traditional" times when sole source may be appropriate, based on the business strategy and requirements of the buyer.
The first occasion where sole source would be appropriate, occurs when a company wants to re-new an existing outsourcing relationship. For example, if the current provider is meeting all of its contractual and intangible commitments (meaning, it is both a cultural fit and "easy to do business with"), including bringing new innovation, year-over-year productivity gains, and improvements in risk mitigation, then sole source would be the correct approach.
Because of competitive pressures, companies are now looking at the possibility of outsourcing processes that have not been outsourced before. The need to reduce costs, improve efficiency, and avoid investments in facilities, processes and systems has forced the, "art of the possible" discussions within the C-suite that culturally would not have taken place before. The processes under scrutiny are outside the normal SG&A processes and include some industry specific ones as well as those that touch revenue generation and product development. For example, Alsbridge is engaged in discussions with clients about outsourcing legal services, evaluating marketing and advertising expenses from an outsourcing lens, audit, and actuarial services to name just a few.
This desire to look at every cost within the enterprise drives the second reason we are seeing new market entry sole source projects. These are the unique situations in which a buyer's research shows there may only be one provider who has the capabilities needed by the buyer. What is not well known is that there is a third situation in which sole source makes sound business sense for both the buyer and provider. These are what we call "new market entry" sole source transactions. They are not common but happen more often than most in the industry realize - particularly today when windows of opportunity open quickly and speed is of the essence.
Vendor Relationship Management: The Next Wave in Strategic Sourcing
eSeminar |
Category: Transition & Governance IT Infrastructure & Applications Finance & Accounting Services...
As sourcing consultants we are often asked, "What is the next wave of strategies for sustaining cost reductions and driving efficiencies in an intensifying and competitive business environment?" The answer is in how companies are addressing vendor relationship management and creating incentives that better leverage the capabilities of their current providers.
This webinar will discuss new vendor relationship management and service management environments, the challenges of improving vendor relations already under duress, and tools and methods for putting troubled vendor relationships back on track. We will also discuss processes for extracting increased value from vendors, as well as best practices in vendor relationship management that leading edge companies are already applying in order to deliver maximum value from their multi-sourcing provider base.
Attendees will gain ideas for effective vendor relationship management including:
- Creating fact-based discussions between clients and providers that address performance issues
- Defining joint innovation opportunities
- Creating incentives for improved provider performance
Join us to catch the next great wave in strategic sourcing practices and learn how effective vendor relationship management can help your organization realize savings in existing relationships, remediate relationships that are not working, work with vendors to build joint capabilities and processes, manage vendor risk, and reduce internal costs of vendor management.
7 Ways to Strategically Reduce Hardware & Software Costs
eSeminar |
Category: Strategy & Business Case Provider Selection Hardware...
In this struggling economy, businesses large and small are forced to find ways to reduce costs wherever possible, including taking a tough look at their technology department.
How to Create a (Truly) Insightful Sourcing Business Case
eNews |
Category: Strategy & Business Case IT Infrastructure & Applications Finance & Accounting Services...
Many business case development efforts justify management action with estimated savings or soft benefits that would result from a potential project or investment. These savings and calculated ratios are most often "guess-timates" developed by staff to win management approval - and often do not deliver the financial performance as promised. This article suggests an alternative approach that will provide real market information to decision-makers, and allow them to learn something they don't already know.
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