Sourcing Lifecycle

Phase 1 - Strategy

A technology strategy is useless  without a sourcing strategy to ensure it delivers value - Gartner

A Sourcing Strategy:

  • assists in determining which business functions should be insourced, outsourced, or co-sourced.
  • assesses whether the existing management model is suitable for the sourcing environments.
  • develops an overall strategic approach and implementation plan for the sourcing options.

Failure to plan really is planning to fail.  There is significant benefit from thinking through business  and IT requirements, and how to implement them, whether via strategic sourcing or other means.  Implementing sourcing options can be expensive and time consuming, particularly so if this is done without a clear vision and plan as to how best to achieve desired outcomes.

Phase 1 Strategy 

CHERUB’s unique benefit
Cherub has assisted many organisations develop sound, practical sourcing strategies. We have developed a methodology to guide the thinking and decision making process. We understand the essential elements of all strategies, including options analysis, capability assessments, risk assessments and analysis, and cost analysis.

We work together with our clients to develop a strategy that specifically meets their needs, ensuring that the strategy meets known business and IT needs, is practical, realistic, and easy to understand.

 

Phase 2 – Services Sourcing

70% of CIOs will change their technology and sourcing relationships in the next two to three years  - Gartner

This phase comprises the processes and documents associated with releasing requests (e.g. RFI, EOI, RFP, RFT)  to the vendor market for commercial offers.  These processes supports the establishment of evaluation criteria to compare and assess offers.
A best practice sourcing document released to the market delivers significant benefits to our clients.  The vendors know in detail their requirements and the client can be sure that vendors are required to be consistent in their reposes, and answer questions that have been identified as meeting the clients needs.  Vendors are most likely to respond favourably to a sound, thorough, well considered document.

Phase 2 Services Sourcing 

CHERUB’s unique benefit
We have detailed schedules developed over many years of experience. We work with our clients to adapt these to their specific needs. This ensures a rapid, best practice approach to developing all requirements for the documents.

We have a thorough understanding of the entire sourcing lifecycle, and can plan out requirements for client input and consultation well ahead of time.

We ensure that vendors receive a complete document that fully reflects clients needs. This provides the best possible chance of our clients receiving responses that meet their expectations.

 

Phase 3 – Evaluation & Selection

This phase comprises the processes and documents associated with evaluating responses and recommended preferred vendors.  The evaluation is typically based on evaluation criteria issued in the Selection Phase.  Evaluation may be single stage (typical for RFI and EOI documents), or may comprise a more thorough two stage process to allow effective shortlisting of responses (common with RFP and RFT documents).  For the more complex documents there is typically a due diligence stage.

A thorough, even, transparent, and complete evaluation is essential.  It ensures that the client has a undertaken a fair, well documented, considered and thorough selection process.  Vendor appreciate this, and are comfortable with the decisions made.

Phase 3 Evaluation & Selection 

CHERUB’s unique benefit

We use our knowledge of the process, along with our sophisticated tools and templates to assist clients undertake the required steps in the evaluation process.

We are experienced in facilitating client and vendor meetings throughout the stage to ensure a smooth, consistent outcome is achieved.

 

Phase 4 – Negotiation

This phase comprises the development of a negotiation strategy, negotiations of the contract, and preparation of necessary client reports for final endorsement of the agreed outcome.

IT sourcing contracts can be complex, and commit the clients organisation to considerable ongoing expense.  IT is critical to ensure that our clients achieve a favourable outcome, and at the same time, the vendors are comfortable with their position.  An unfavourable, or ill considered contract, will ultimately prove to be very disadvantage to our clients over the course of its life.

Negotiation 

CHERUB’s unique benefit

We have extensive experience in helping clients negotiate complex sourcing contracts. We understand the need to ensure contractual and commercial outcomes. We recognise that a best outcome for the client means that the vendor must be happy and comfortable with the agreed contract.

Vendors are comfortable dealing with our experienced consultants, which provides our clients with a greater likelihood of achieving the desired outcomes.

 

Phase 5 – Sourcing Management

The majority of nearly 200 outsourcing buyers, providers and influencers believed that 80% or more of the contract value is at risk if the deal is not well managed - Vantage Partners

This phase  comprises:

  • Transition and  Transformation management
  • Implementing Sourcing Management processes and tools
  • Ongoing Sourcing Management and ongoing contract and service audits.
Sourcing Management 

CHERUB’s unique benefit

We know that

  • Over 13% of outsourcing contracts are brought in-house within the first 2 years
  • Nearly 70% of outsourcing organisations feel their service provider does not adequately understand what they are supposed to do
  • Buyers replace 80% of their service contractors in the first three years

We work with clients during the transition stage to develop best practice vendor management processes and techniques. We provide ongoing support throughout the contract to ensure that these processes are effective. The outcome of this effort is that the client is much more likely to continually achieve its expected outcomes of the contract