Insight

Outsourcing: Freedom of choice

The ability to select and switch between the most appropriate, and cost-effective, delivery models and providers is key to success

Brian C. Lewis

Brian C. Lewis

Director Advisory, Procurement & Outsourcing, KPMG US

+1 303-459-7903

Micro-Sourcing is a modern information technology (IT) sourcing strategy that contracts for hybrid delivery models. It is necessary because different products require different models and approximately 60 percent of clients in the market are revisiting their outsourcing strategies to accommodate a product and consumer-centric operating model, and we have realized that a singular approach to outsourcing doesn’t work. Micro-Sourcing establishes the decision framework that integrates the approaches so that alternate delivery models successfully coexist in your portfolio and across providers. It provides chief information officers a flexible, delivery model portfolio aligned with the transformation needs of the business and facilitates the necessary mindset shift for digital transformation of IT. Product owners enjoy “freedom of choice” to select and switch between the most appropriate, and cost-effective, delivery model and provider to match the needs of the lifecycle (Inception, Minimum Viable Product, Iteration, Maintenance, Disposal). The business enjoys the value realization that comes from being able to switch between delivery models at market speed. Procurement enjoys the knowledge that the third-party contracts coexist with one another and are aligned with the risk profile of the company. Finance enjoys adherence to the business case while allowing appropriate flexibility to the business. The governance framework and processes must continue to mature in this model to be successful, which is where we will continue the conversation in our next posting.

If you would like to read previous blogs in this series, visit Outsourcing (kpmg.us)

Coming up next in our Micro-Sourcing Series…Blog 4: Multiple delivery models. The Micro-Sourcing decision frameworks can be augmented to take a data-driven approach to “selecting a model” and to “selecting the right alternatives within the model”.