Monday, December 21, 2009

A Plethora of Sourcing

Procuring resources and capabilities for the tasks that require to be completed has been an important part of IT management since the introduction of IT into the business model. In the past, however, procuring talent meant visiting university campuses for entry level positions and posting advertisements in newspapers and job-websites for more experienced candidates. With the advent of greater complexity and faster changing technology and best practices, consultants were brought in to fill the gaps.

However, with the availability of significantly cheaper and at the same time good quality resources being available in foreign countries, outsourcing was the buzzword for a while. Now, however, many types of sourcing possibilities exist and IT executives have a smorgasbord of options to choose from. Some of the lesser known types of sourcing that also exist are:

  • Multi or Co-Sourcing: where tasks are performed by both the internal organization and an external provider

  • Knowledge Process Sourcing: is a type of sourcing where highly knowledge intensive work is carried out by highly skilled staff. E.g. Sox auditing may be assigned to a third party organization that specializes in SOX audits.

  • Global Sourcing: Global sourcing often aims to exploit global efficiencies in the delivery of a product or service which could include low cost skilled labor, low cost raw material and other economic factors like tax breaks and low trade tariffs

  • Strategic Sourcing: which consists of techniques to optimize the procurement of services and overall sourcing strategy of the organization

  • Corporate Sourcing: where divisions of companies coordinate the procurement an distribution of materials, parts, equipment, and supplies for the organization
    Second-tier Sourcing: is a procurement policy that rewards those suppliers that achieve or attempt to achieve the minority-owned business (MBE), spending goals of their customer

  • Crowd Sourcing: a technique of assigning a task to a group of people or community as an open call. Beta testing by PC game companies is an example of this technique where a group of typically teenage game enthusiasts perform testing for a small fee or even free.

  • Open Sourcing: utilizes previously proprietary software under an open source/free license. This may not always be a good choice but the price is certainly right.

So it emerges that there are quite a few type of sourcing techniques available and are no longer rare occurrences as they used to be in the past. The method of choosing which type of sourcing to use remains the same, however. A careful analysis of the needs of the organization along with consideration of its long term goals and objectives and an evaluation of the pros and cons of each type of sourcing possible will result in a mature procurement decision. A key here is to keep an open mind to the sourcing possibilities and to not be guided by one’s own prejudices in the matter.

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