For resolving the sourcing dilemma in a global services economy, several models have emerged. They are characterized by different time frames, levels of investment by the enterprise receiving the services (the “services recipient”), the degree of management control that the services recipient must exercise to achieve its goals, the degree of risk associated with internal or external operations, the nature of the risks as the supply chain “goes global,” and the unique challenges of doing business in foreign countries.
Comparison and Balancing.
Effective implementation of a sourcing strategy requires a procurement or logistics services department attuned to the strengths, weaknesses, opportunities and threats (“SWOT”) presented by each sourcing model.
Integration and Optimization.
Each model must be used as a tool for integrating the enterprise (which could be a government, an intergovernmental organization or a non-profit corporation) into its business ecosystem. Within that ecosystem, it must anticipate and satisfy the demands of its direct and indirect customers, its direct and indirect suppliers and constituencies (investors, regulators, employees, local community) that have a right to direct what and how the enterprise interacts within the ecosystem.
Competitive Outcomes.
Within a particular business model, the enterprise and its service providers focus on quality and efficiency of performance of specific work. To achieve the true opportunities of an coherent, dynamic sourcing strategy, the sourcing variants need to support the enterprise as part of a constellation of ecosystems. Global commerce thus becomes a market of competiting constelleations of sourcing and supply ecosystems. Between competitors, one’s viability, if not success, depends largely on the effectiveness of the sourcing strategies.
