Making Multisourcing Work

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One of the key features of the outsourcing industry over the past few years has been the trend away from large, end-to-end outsourcing deals. Companies that make use of outsourcing are increasingly looking to so-called multisourcing arrangements, where the business receives its services from a number of best-of-breed service providers.

This marks a clear contrast from the feature that really caused outsourcing to burst into life in the 1990s, i.e., the expansion of full-scope, full-service, long-term outsourcing contracts with a single prime service provider. For whatever reason – risk mitigation, avoidance of having all the eggs in one basket, or a preference for more flexible, niche suppliers – companies’ IT and administrative

functions are changing the way they procure outsourced services.

But it’s no surprise that as the companies adopt multisourcing solutions, someone ought to check the wider implications for the company’s operation, including any impact on business risks, possible cost savings, flexibility, and service performance. That role, as so often, falls to the finance function. This article focuses on such issues from the CFO’s perspective.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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