Outsourcing: Insanity or opportunity? (hint, it's both)

We all recall the definition of insanity: doing something the same way and expecting a different result. This old adage certainly applies to outsourcing. For years, we have tried singular approaches to outsourcing and, not so ironically, have had mixed results—some wildly successful and some, well, not so much. We’ve tried big bang, best of breed, managed service, as a service, and co-source; sometimes those approaches worked pretty well. When it didn’t work, we focused on governance and performance measurements to make it work better, or we switched providers. Again, sometimes the new provider brought improvements and in other cases, it got worse. You have to ask yourself: What are we missing? The answer is actually pretty simple—stop doing it the same way! We have so many services that need to be delivered. Why should we expect that the same delivery approach will work for each service? There is a time and a place for each approach to outsourcing. What you need is a flexible decision and governance framework that helps you select, switch between and then operate in multiple delivery models each optimized for a particular service. Yes, this is a more complicated model than doing it all the same way. Yes, it will cost more to govern. But, if it works better and reduces overall cost while delivering additional value to the business, wouldn’t that be worth it? In this series, we will explore this overall approach to outsourcing. We call it Micro-Sourcing, not because it is small but because each segmented delivery model is smaller than the whole and addresses specific business outcomes.

First, let’s outline the delivery models:

1. Contract for skill – Skill augmentation
2. Contract for innovation – Agile ways of working
3. Contract for sustainment – Managed services
4. Contract for solution – Standard solution.

These are not new approaches. Each has been tried and has distinct advantages and disadvantages to the others. The new concept, Micro-Sourcing, is the framework that integrates each approach so that they successfully coexist in your portfolio and can be utilized when needed.