Evaluate your sole-source versus multi-source strategy in ERP ADM

We are seeing a turbulent time in ERP ADM services wherein organizations are not clear whether they should stick to their best and trusted vendor for providing the services or look for economical and probably better service models outside. Other than this, they are also wondering if their long term strategy should change from depending on one single vendor to keep on getting the volume discounts and single window service or should look out for multiple vendor services for getting exposure to different best practices, pricing models etc. from them. The objective remains same in both the cases, which is lower costs, better service and exposure to best in class practices.

According to Bill Martorelli of Forrester, many firms are currently recasting their single-sourced, all-encompassing IT outsourcing agreements towards a multisourced scenario — in some cases carving out application services. But many application development and maintenance (ADM) service engagements grow organically, individual scope of work by individual scope of work. In cases involving multiple ADM suppliers, principal challenges include building a framework that governs the involvement of the different suppliers, as well as guidelines for awarding subsequent work to those that do the best job. The task is complicated by the often fluid nature of preferred applications services partner relationships, where the roles of respective partners can grow or shrink more than is typical in infrastructure-oriented engagements. Sourcing and vendor management professionals should compensate for these concerns with a greater emphasis on governance and transition assistance.

Certainly, multi-sourcing brings competition among your partner vendors and in quest of getting more business or to outsmart each other, there are high chances of your getting their best of sevices and focus on your requirements but having said this, we need to be congnizant of the fact that Big is Beautiful and in case you do not have a large carrot hanging for the vendors for near future, the strategy may backfire and once again, the solesource strategy will become a better choice.

We need to put our heads together to chalk out a short term and a long term strategy in going ahead with the sole source or multi source plan looking at the specific situation of our organization before we take any decisions.


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