Best Practices For Streamlining Sourcing Life-Cycle Governance

Forrester defines different generations of outsourcing capabilities within firms based on the level of experience. Companies starting on their outsourcing initiatives are defined as "first generation," while companies that already have several years of experience are defined as "second generation." Moving from first to second generation outsourcing is a long-term process — and requires that SVM professionals take on a much stronger governance role. We find that first-generation companies that do not invest in governance will meet significant obstacles in their outsourcing efforts and are far less likely to achieve the anticipated outcomes from contracts. It is therefore critical that SVM professionals understand who the diverse stakeholders are in the sourcing process and what their contributions or requirements are throughout the sourcing life cycle. A strong governance and process oversight will enable agility and high quality throughout the sourcing processes — and allow sourcing professionals to get more out of existing vendor relationships.