Dealing with IT outsourcers can be difficult under the best of circumstances, like when the scope of the project is relatively small, and only one or two key suppliers are involved. But when you’re thrust into a multisourcing situation where multiple suppliers are contracted to handle various parts of a large-scale project, it can be a nightmare of “not my job” buck-passing and finger-pointing when something goes wrong. Multisourcing can be a mega-headache.
The pain is likely to get worse before it gets better. According to Information Services Group (ISG), a Stamford, Conn.-based technology services consulting firm, the multisourcing model is becoming increasingly common, and we’re on the cusp of seeing a surge of these contracts being negotiated. A record 901 outsourcing contracts valued at $25 billion expired in 2012, ISG says, and another 886 contracts valued at $21.2 billion will expire this year.
I discussed all of this in a recent interview with Lois Coatney, an ISG director who has been in the trenches and has seen the challenges inherent in the multisourcing model. She has said that one of the biggest challenges lies in the fact that “providers are financially motivated to get the highest possible fee for the least amount of work,” and that “you often see individual providers conclude that it's in their best interest to protect their turf and to find ways to show that fixing whatever problem arises is the responsibility of another team.” Before joining ISG, Coatney worked at HP Enterprise Services, so I asked her if she could share any tips based on HP’s strategy in a multisourcing environment that would have been very helpful for the customers if only they’d known. She responded that she couldn’t speak on HP’s strategy, but she could speak from a supplier’s perspective: