Multisourcing [http://www.sourcinggurus.com/] or a multi-vendor environment brings an old adage to mind: "don't put all your eggs in one basket". Many a company has in the past fallen on difficult times when they relied on one company to provide all their IT needs. Multi-vendor environments are quite common now but there are still some who wonder whether the effort is worth the overall savings. Here are some pros and cons to consider if you are considering setting up a multi-vendor environment:
Pros:
*Competition drives collaboration and better prices. A team of strategic vendors bidding on the same scope of work allows you to benefit from collaborative opportunities as well as from better cost.
*Splitting the scope up between two or more vendors allows you to better manage your risk if a supplier is unable to perform or goes bankrupt.
*Multiple vendors means leveraging multiple skills to get the best solution. Rather than relying on one or two vendors to "be all", leveraging each vendor to get their specific expertise in place provides more value to you.
*Multiple vendors also allows you to negotiate better terms, not just better prices.
Cons:
*Requires more internal time to manage multiple vendors. This includes time spent not just by the operational procurement team but also by the management team.
*He said, she said can result from one vendor blaming the other for work not completed on time or as required, when contracts are not clear or have some gray overlapping terms.
*Managing accountability and standardization of process, communication, and metrics becomes more of a challenge.
Multi-sourcing does work. But does it work for all? That remains to be seen as each situation needs to be evaluated and understood before a clear path can be determined.
Multi-sourcing does work. But does it work for all? That remains to be seen as each situation needs to be evaluated and understood before a clear path can be determined.
Pros:
*Competition drives collaboration and better prices. A team of strategic vendors bidding on the same scope of work allows you to benefit from collaborative opportunities as well as from better cost.
*Splitting the scope up between two or more vendors allows you to better manage your risk if a supplier is unable to perform or goes bankrupt.
*Multiple vendors means leveraging multiple skills to get the best solution. Rather than relying on one or two vendors to "be all", leveraging each vendor to get their specific expertise in place provides more value to you.
*Multiple vendors also allows you to negotiate better terms, not just better prices.
Cons:
*Requires more internal time to manage multiple vendors. This includes time spent not just by the operational procurement team but also by the management team.
*He said, she said can result from one vendor blaming the other for work not completed on time or as required, when contracts are not clear or have some gray overlapping terms.
*Managing accountability and standardization of process, communication, and metrics becomes more of a challenge.
Multi-sourcing does work. But does it work for all? That remains to be seen as each situation needs to be evaluated and understood before a clear path can be determined.
Multi-sourcing does work. But does it work for all? That remains to be seen as each situation needs to be evaluated and understood before a clear path can be determined.
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