Strategic sourcing model

Although small deals are becoming increasingly common, the single-source mega deal is still very much in demand due to a variety of reasons, including less administrative effort in dealing with only one supplier. A single-source procurement is also greatly beneficial to a supplier and end users should expect to share in that benefit

As end users continue to opt for a number of smaller, flexible and short duration deals with a number of suppliers; governance and end-to-end integration will continue to play key roles in achieving the overall business value. A culture of collaboration is also encouraged between large suppliers and SMEs rather than blame.

Gain Share
In today‘s difficult economic climate, end users are under growing pressure to find new ways to cut supplier costs without adversely affecting business performance. A gain share model is fast becoming the solution for many who are seeking cost-effective ways of purchasing new products or services.

The Government‘s recent ‗Rights to Provide‘ scheme allows entrepreneurial front-line staff to take over and run services as a mutual, co-op or joint venture by partnering with the private and third sector. Whilst no one can downplay the fundamental role capital plays to fund any service – it is these kinds of collaborative strategies that can make a key difference to organisations and the role of outsourcing in delivering services in the Big Society.

Joint Venture
Since outsourcing resembles a partnership or joint venture, many outsourcing contracts have been structured as joint ventures. The rationale for outsourcing joint ventures in these times of austerity is often financial, however partner expertise often results in an increase in innovation, technology and process improvements.

Social Impact Bonds
Social Impact Bonds are growing popularity and provide an innovative way of attracting new investment around outcome based contracts that benefit individuals and communities. Private investment is used to pay for interventions, which are delivered by service providers with an proven track record. Financial returns to investors are made by the public sector on the basis of improved social outcomes. If outcomes do not improve, then investors do not recover their investment.

With more markets beginning to embrace offshoring, multinationals are looking to consolidate vendors and geographic sites into two or three multi-lingual hubs in order to gain economies of scale, gain greater consistency and improve vendor management.

Service Integration
As companies continue to turn to multi-vendor models, there is a growing need to further mesh services together whilst maintaining the discipline that allows for a ―plug and play‖ approach. The introduction of cloud offerings has also added to the demand for flexibility. Service integration is the key to transforming the component service from being disjointed and focused into being business relevant, enabling and seamless

Shared Service
The advantages of shared services are clear. Different ways of delivering services, which have arisen purely as a matter of chance, can be harmonised, helping remove the problem of the ―postcode lottery‖. Best practice can be shared for the benefit of all. Those who only use a service occasionally can call upon a central resource when needed. Plus, staff can be freed up to concentrate on what adds most value. Sharing services does not necessarily mean that fewer staff are required overall – simply that these staff can be freed up to do other things, of greater benefit to the public.

Robotic Automation
The implementation of a ‗virtual workforce‘ can significantly shape the nature of back office service delivery. Robotic automation can have the effect of dramatically reducing costs as opposed to alternative service delivery approaches. Transformation can be delivered rapidly, with the potential to robotise back office services within a period weeks or days compared to other less rapid and agile systems.

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