Align Sourcing Strategically

“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” – Archimedes of Syracuse

Outsourcing can give your organization a lot of leverage but often presents a daunting array of potential levers to use. A strategically aligned and holistic approach to sourcing is a key enabler for maximizing the value derived from outsourcing initiatives.

I can’t guarantee you’ll move the world, but your organization will have a better chance of using the optimal levers for your situation. (Of course, the choice of shouting “Eureka!” while running through the streets naked, as Archimedes did, is entirely your own.)

I had a conversation once with a client who, trying to justify the need for a better sourcing approach, remarked that, “Outsourcing generally works pretty well in our industry.” “So do toothpicks and toilet paper,” I observed, “but that doesn’t mean I should acquire, use and manage them the same way.”

Verbal repartee aside, I believe there’s several important characteristics that a strategically-aligned, holistic sourcing approach exhibits:

Dedicated Function – Many organizations have, by default, delegated sourcing decisions to the business areas that express need. Who better to understand what’s needed, and from which sources, than the folks in need?

As long as the decision’s within their budget and observes any other broad constraints, Tally Ho! I won’t quibble with any group’s knowledge of their wants, nor deny that ad-hoc sourcing decisions can succeed. I will advocate, however, that dedicated people, processes and infrastructure can have a positive impact on sourcing.

Minimally, these resources should help to improve sourcing efficiency, from acquisition through operation and management. Ideally, they should help catalyze sourcing effectiveness throughout the organization. Obviously, the quest for improvement can’t marginalize the functional business leadership since they ultimately own their decisions. Instead, an aligned sourcing organization fuels success with the remaining characteristics I’ll discuss here.

Partnering Philosophy – An aligned sourcing approach values partnership on several important fronts. Partnering with executive leadership provides the basis for strategic alignment and a guide for outsourcing decisions since outsourcing is the means, not the end.

It should also give executives a view into how outsourcing initiatives and providers, as well as the sourcing approach as a whole, is helping to enable strategic business goals. Partnering with business area and functional leadership surfaces their wants, needs and vision for success.

These should guide the sourcing function to determine how outsourcing can best help, and gives the leaders an understanding of existing sourcing relationships and resources.

Finally, partnering appropriately with outsourcing providers should help maximize win/win potential for individual engagements as well as the entire relationship. It’s often challenging when business areas are either clamoring for help or resisting sourcing decisions so these partnerships are key to the success of an aligned sourcing approach.