Sourcing structures

The dynamics of service sourcing require businesses to formally address provisions for a sourcing strategy, the structure and role of the retained organization, and the impacted decision rights processes. When sourcing services, the enterprise retains the responsibility for the adequacy of services delivered. Therefore, the enterprise retains key overall responsibility for governance. The enterprise should adopt a formal governance approach in order to create a working model for managing its outsourced services as well as the assurance of value delivery. This includes planning for the organizational change precipitated by the sourcing strategy and a formal and verifiable description as to how decisions on services are made. Figure 6.12 and Table 6.2 describes the generic forms of service sourcing structures.

Figure 6.12 Service sourcing structures

Sourcing structure	Description
Internal (Type I)	The provision and delivery of services by internal staff. Does not typically include standardization of service delivery across business units. Provides the most control but also the most limited in terms of scale.
Shared Services (Type II)	An internal business unit. Typically operate s its profit and loss, and a chargeback mechanism. If cost recovery is not used, then it is Internal not Shared Services. Lower costs than Internal with a similar degree of control. Improved standardization but limited in terms of scale.
Full Service Outsourcing	A single contract with a single service provider. Typically involves significant asset transfer. Provides improved scale but limited in terms of best-in-class capabilities. Delivery risk s are higher than Prime, Consortium or Selective Outsourcing as switching to an alternative is difficult.
Prime	A single contract with a single service provider who manages service delivery but engages multiple providers to do so. The contract stipulates that the prime vendor will leverage the capabilities of other best-in-class service providers. Capabilities and risk are improved from Single-Vendor Outsourcing but complexity is increased.
Consortium	A collection of service providers explicitly selected by the service recipient. All providers are required to come together and present a unified management interface. Fulfils a need that cannot be satisfied by any Single-Vendor Outsourcer. Provides best-in-class capabilities with greater control than Prime. Risk is introduced in the form of providers forced to collaborate with competitors.
Selective Outsourcing	A collection of service providers explicitly selected and managed by the service recipient. This is the most difficult structure to manage. The service recipient is the service integrator, responsible for gaps or cross-provider disputes. The term Co-Sourcing refers to a special case of Selective Outsourcing. In this variant, the service recipient maintains an Internal or Shared Services structure and combines it with external providers. The service recipient is the service integrator.

Table 6.2 Service sourcing structures

The selection of a sourcing structure should be balanced with acceptable risk s and levels of control. The method an organization uses to manage a sourcing relationship depends greatly on the sourcing organization’s characteristics such as degrees of centralization, standards and process maturity. In general, the sourcing organization should excel in establishing a set of relationship standards and processes. Other key responsibilities are to:

• Monitor the performance of the agreement s and the overall relationship with providers.
• Manage the sourcing agreements.
• Provide an escalation level for issues and problems.
• Ensure prioritization for providers.

When sourcing services, enterprises should first focus on clearly defining the services. All too often the primary focus is on the reporting structures and the resource s aligned to those structures. Resource alignment and organizational structures should be analysed and adjusted only after understanding the dynamics of the new or enhanced services. This affords the opportunity to remove redundancies and ambiguities, and chokepoints and dysfunctions prior to creating workflows.

Once the resource and organizational discussion begins, be sure to account for the introduction of new critical skills. While highly dynamic, these competencies generally fall into three categories: business, technical and behavioural. For example, the greater the level of outsourcing, the greater the need for business and behavioural skills. The greater the level of internal sourcing, the greater the need for technical skills.

Дата добавления: 2015-11-14