As a strategy, multi-sourcing treats a given function, such as a company’s information technology, as a portfolio of activities– some routine activities can be outsourced  to multiple service providers while other activities, often critical, are kept in-house to be performed and maintained by internal staff.

Today, companies see a more effective recipe for success by outsourcing their software development and maintenance requirements to multiple service providers rather than have one service provider do all the work.

Stephanie Overby of CIO.com writes that multi-sourcing has certain business benefits:

  1. access to a broader, deeper set of resourcesand skills from multiple service providers;
  2. encourages competition among the service providers, improving the client’s bottom-line;
  3. keeps the service providers honest and determined to provide continuous, compelling business value to their client.

Of course, obtaining these benefits will not be easy. Multi-sourcing does require sufficient governance and better relations management to assure service providers do not feel marginalized.

The ideal multi-sourcing recipe for IT applications development/maintenance has the following ingredients:

  1. A domestic multinational service provider company
  2. 1 off-shore large service provider
  3. 1 off-shore smaller, Tier-1 or Tier-2  service provider

The domestic provider can bear the bulk of business and bring the familiar flavor– it  can either perform the work off-shore or access a pool of local  resources for customer comfort, ease of collaboration or security.

Off-shore, smaller service providers keep pricing competitive, offer specialization in certain areas, and offer more individual focus and attention.

The article also explains more on the mechanics of multi-sourcing. To learn more, click on the reference link provided below.

Outsourcing Solutions, Inc. – your outsourcing partner!
Overby, Stephanie. “How to keep your Outsourcing hungry for your application development business.” 13 October 2009. CIO Website. Accessed 14 October 2009. Link Here


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