In a recent post, I described “field of vision” as an important attribute of a sourcing advisor. Below, I unpack why this applies equally to sourcing as to pro football, and the order of magnitude improvements you can expect by re-framing your view of the sourcing process (up to 200% better results from your sourcing exercise).
Think for a minute about what separates the great quarterbacks from their peers. I would argue that it’s less about sheer athletic ability (hey, a 43-year-old just beat a 25-year-old for the championship), and more about being able to perceive the full scope of a situation, determine the best possible outcome while taking into account many variables, and then having the discipline to execute on that vision.
Sourcing is no different. Sure, a quarterback can call a play in the huddle as easily as you can take a current outsourcing agreement and re-compete it. The great quarterbacks, however, get to the line of scrimmage, read the defense, factor that information against the capabilities of their teammates on the field, and—with that entire “field of vision”—may call a different play with a better chance of success. The great sourcing plays are approached similarly; not from the narrow lens of a procurement exercise, but rather by looking at the entire scope of a managed service relationship and how it best enables successful business outcomes.
When considering how to call your next sourcing play, your “field of vision” should, at minimum, include:
- Your current state technology architecture: Are you leveraging cloud and digital workplace technologies to optimize costs and improve productivity?
- Your retained organization: Can you enable staff to work on higher value activities by sourcing more of your commodity functions? Conversely, can you add global talent directly to your development teams instead of using traditional outsourcing?
- Your services management capabilities: How well can you orchestrate multiple in house, managed services, and “as-a-service” capabilities? (By using ITIL? Agile? DevOps? Something else?)
- Your security, risk, and compliance stance: Are you able to safeguard sensitive enterprise data from bad actors? Stay secure from ransomware? Protect the privacy of your customers and employees?
- Your approach to governance: Are you managing at the level of outputs and SLAs or are you deriving maximum business value from the industry-leading capabilities of your services suppliers?
Why does taking a holistic view matter? Below, I offer examples from recent Wavestone sourcing engagements, where a more strategic “field of vision” produced a quantum leap of improvement (the weighted average of cost savings totaled 56 percent).
|Transformational Benefits Achieved||Base Case Run Cost (5yr)||Transformed|
Run Cost (5yr)
|Transformational Benefits Achieved|
|Healthcare Insurance||$1,007 million||$480 million|
|– Large IT footprint and storage reduction|
– Redesigned sourcing model to unit-based pricing at market rates
|Media & Entertainment||$795 million||$259 million |
|– Created shared services across five BUs|
– Increased offshore labor
– New tools and automation
|Global Manufacturing||$293 million||$157 million|
| – Modernized reference architecture|
– Infrastructure segmented by regulatory requirements
– Multi-sourced with new governance
|Retail||$127 million||$68 million |
|– Automation enabled delivery|
– Greater cloud utilization
– Modernized sourcing model
|Financial Services||$39 million||$29 million |
|– Proactive support analytics|
– Increased automation and self-service
– Moved to lower-risk service provider
|Insurance||$29 million||$18 million|
|– Modernized and automated EUS delivery|
– Rebalancing of labor model
– Redesigned sourcing model & contracts
Looking at the transformational benefits achieved by taking sight of the bigger picture, I would argue that these deals were not only less expensive, but they were intrinsically better, too. Next time you have the opportunity to lead your team in a sourcing event, remember why the great quarterbacks keep winning. Keep focused on the broader context: your “field of vision.”
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