Best Practices for Streamlining Sourcing Life-Cycle Governance

For sourcing organizations to mature, they must understand both the complexity of the sourcing process and the intricacy of each step of the life cycle. Here are some best practices for sourcing and vendor management professionals to follow in order to successfully coordinate activities throughout the sourcing process.

By Lutz Peichert
Wed, July 27, 2011

CIO — Moving from first to second generation outsourcing capabilities is a long-term process for many firms, requiring a much stronger governance role from sourcing and vendor management professionals. In order to successfully invest in governance, sourcing professionals must first identify and understand the contributions and requirements of stakeholders throughout the sourcing life cycle. Taking a strong approach to governance and process oversight will promote an agile and high quality sourcing process, maximizing benefits from existing vendor relationships.

As SVM professionals prepare to take on broader service profiles and more complex technology solutions, collaboration across business stakeholders becomes much more complex. Today, empowered employees across business units are beginning to source solutions on their own, making technology decisions without the supervision of the IT department. As more and more business leaders begin to make technology investments, IT departments are faced with the task of defining, selecting, and deploying solutions that satisfy needs across the organization — a challenge that can prove to be a key differentiator for sourcing and vendor management organizations.

In order for sourcing organizations to mature, they must understand both the complexity of the sourcing process and the intricacy of each step of the life cycle. Most importantly, SVM professionals must get to know the contributors and stakeholders in their firm and use this knowledge to map various activities in the sourcing process. Stakeholders, which differ throughout the stages of the life cycle, include IT executives for strategy, infrastructure and operations teams to support execution, procurement organizations to support sourcing life cycle activities, and the legal and HR departments to adhere to corporate governance.

Just as stakeholders vary throughout the life cycle, so do levels of engagement. While CIOs and IT executives are accountable at critical points in the sourcing process, other roles throughout the IT department should also be responsible for continuous participation. SVM professionals are usually involved throughout the entire lifecycle, overseeing each stage to ensure clear, concise, and structured communication. In order to successfully coordinate activities throughout the sourcing process, SVM professionals should follow several best practices to clarify the role of stakeholders:

Build a process model describing their sourcing life cycle. Building a firm-specific sourcing model helps SVM professionals take the first critical step in identifying key stakeholders. For example, Forrester's sourcing life cycle defines the reoccurring process of strategizing, contracting, and executing on IT investments. Many SVM professionals in leading companies are already building their own models, describing their firms specific life cycle and the activities needed for more focused communication.

Continue Reading

Our Commenting Policies