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A few months back, I blogged about getting more value from your outsourcing strategy: Rather than sign a single $1 billion-plus deal, break your services up.
Smaller deals, focused on smaller projects or services, may be the new way to go, I conjectured. After all, outsourcing everything to a single vendor and making a long-term commitment -- often as long as 10 years -- can lead to problems down the road, especially when it comes to business process innovation.
I concluded, with the help of Peter Lowes, principal at Deloitte Consulting and leader of Deloitte's Outsourcing Advisory, that breaking a project into smaller pieces increases your chances of finding providers who take a specific focus, and thus your ability to maximize the value of your contracts.
However, something has been nagging at my conscience since then -- mainly that any multisourcing strategy comes with its own set of challenges. Here are the four main issues you need to be aware of before diving in:
More players, more complexity
Obviously more vendors means greater complexity, especially if you are dividing up a single project. Coordination and communication are key. In other words, just like you tell your children, everyone has to play nice and get along together. But as the IT coordinator and project lead that's your function.
Large providers seek large slices
The moment you make the pie smaller for each potential provider, the less interested they became in doing the job. They heard the cash registers ring, and now that the ring isn't so loud, they may opt out -- especially if they are a larger company. After all, the bigger the company, the bigger the overhead they have to deal with; at some point, the deal may not be worth it to them.
Project management begins in-house
You will need highly competent project managers who know how to juggle multiple projects, keep to a schedule, and have the technical expertise to separate the technical BS from serious issues that threaten to derail a project. The blame game has to stop at your desk.
Savings often give rise to new costs
That time commitment of more managers spending more time on multiple project will also increase the cost of your initiative. So, if you thought you were getting a good deal by hiring service providers who fit nicely into your smaller budget, don't be surprised when the cost you thought you saved pops up somewhere else.
Although there is less likely to be a single point of failure when you break up your outsourcing strategy, internal management costs can be significant, Lowes says.
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Computerworld Live Podcast #97: The Future of Enterprise Networking 25/07/2008 09:45:36
This week CW Live chats with Mark Thompson, global sales and marketing manager for HP ProCurve, on the future of the enterprise networking. Mark discusses the trends we can expect to see in the near future and how the right infrastructure can ensure your enterprise network is secure. - +
Computerworld Live Podcast #96: Security at the Edge 11/06/2008 09:22:22
CW Live speaks with Amol Mitra, HP ProCurve Director of Marketing for Asia Pacific and Japan. Today's topic: how enterprises are starting to shift away from simply controlling security via server logins, firewalls and moving to more adaptive security frameworks. - +
Data Management Edition #10: Multi-Petascale Systems 02/05/2008 09:12:33
This week we look at sustainability and the development of multicore technologies to build multi-petascale systems. - +
IT Security Edition #11: How to poison the Storm botnet 01/05/2008 08:51:55
This week CW Live presents a case study on how to poison the notorious Storm botnet . Plus we take a look at Cisco's plans for Ironport. - +
IT Security Edition #10: Cyber-battles fought and won 24/04/2008 11:09:47
Vendors bow to end user pressure to improve product security, and we take a look at the latest concepts shaping the cyber-battlefield of the future.
VeCommerce Launches Top Ten List of Personal Security Breaches In Lead Up to National ID Fraud Awareness Week 2008-10-07 15:10:00+10
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Symantec State of Spam Report - October 2008 2008-10-07 11:58:00+10
AIIA to Reward Sustainability and Green IT Champions at the 2009 iAwards 2008-10-07 11:56:00+10
Taking On Demand CRM Integration to the Next Level
Discover the current integration challenges facing businesses attempting to deploy on demand CRM systems. Learn how to create comprehensive integration of your data, user interface and business process levels and transform a portfolio of disparate applications into a unified, virtual application suite.











