How to Rebalance your Sourcing Strategy?
Sourcing has come of age and gone are the days when companies decided to outsource processes simply to cut costs or just because it is not their core business. The continually evolving sourcing market, new technologies and the easily accessible wide range of options certainly demand a novel way of thinking. Companies need to indulge in systematic scrutiny of all their processes and the analysis should include weighing the interdependencies of processes, detecting proximity requirements and understanding the language requirements as these steps play a crucial role in rebalancing the sourcing strategy of an organisation.
Given below are some tips on rebalancing your sourcing strategy:
Redefine bundles of internal processes
One of the best ways to hone and rebalance your sourcing strategy is by defining bundles of processes that need consistent sourcing and then determining the right sourcing option for each bundle – the solution may be offshoring, nearshoring, farmshoring or onshoring. It helps to remember that the focus should be on creating value rather than on labour costs.
Focus on factors that defend against operational risks
When offshoring, the rebalancing of sourcing modes should be focused on factors such as increased flexibility, access to a global talent pool and ability to create a global network. These factors act as a defense against the possible risks of currency fluctuations, changes in regulatory guidelines and natural disasters.
Conversely, when nearshoring or onshoring, the rebalancing of sourcing modes should focus on benefits such as language skills and possibility of relocation of activities higher up the value chain. As companies continue to rebalance their sourcing strategy, nearshoring and onshoring will become very important sourcing models.
Revisit sourcing strategies to maximise value
It is high time that IT leaders and CIOs revisit and rebalance their IT sourcing strategies to maximize value for their organisations. As more and more companies continue to move away from the core and non-core logic, IT managers find themselves in a better position to optimize their sourcing strategy. The key is to not only expand their existing offshore centers, but also to complement their functions by adding more nearshore or onshore centers.
No sourcing solution is the ‘only’ right sourcing solution any more. Some enterprises may not find their best match in sourcing options such as remote off-shoring, in-shoring or on-shoring, but there are organisations that are extremely happy with these sourcing options. The key is to balance and rebalance to lay your hands on the sourcing strategy that is just right for you.