No More Outsourcing: Call It Sourcing

Stop thinking outside the box. It’s all just sourcing now.

Last month I met with scores of CIOs and senior technology executives in a series of executive roundtable discussions. The topic of those discussions was how to manage and measure outsourcing operations.

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My biggest takeaway from these conversations was this: It’s time to take the “out” out of outsourcing. Let’s call it what it is: sourcing.

Outsourcing suggests a practice and a relationship that’s external to a company, its culture, its business processes, its employees. Using the term indicates that in the company’s collective consciousness there’s some imaginary line being drawn. On one side of the line, it’s us and on the other, it’s them.

But the executives I met with—executives representing businesses that were managing their sourcing relationships successfully—saw their business and the sourcing company’s business as one, as an organic whole.

The most difficult aspect of managing the sourcing relationship is what some of these executives called “soft metrics”: the human side of handling expectations with line-of-business managers and the sourcing firm. The hard metrics—such as cost, quality of work, delivery time—were, at least in contrast, relatively easy to manage and measure. These experts strongly recommended that metrics both hard and soft be reviewed at least quarterly.

Tom Friedman almost got it right. But the world isn’t exactly flat; it’s globally integrated by IT departments in which (according to Gartner) 80 cents out of every budgeted dollar goes to supporting and maintaining that infrastructure and the rest goes to new initiatives. That’s not a great split at a time when CEOs are calling for their CIOs to deliver growth and innovation.

Sourcing solutions, particularly ones by which CIOs improve their management of those soft metrics, can free up dollars for those new initiatives and help CIOs provide what their enterprises need and their CEOs want.

Here’s an idea: Why doesn’t the global CIO community collectively log on to Wikipedia and take the “out” out of outsourcing?

It could become the in thing to do.

Publisher Emeritus Gary Beach can be reached at

Copyright © 2007 IDG Communications, Inc.

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