Emerging Outsourcing Models Require New Sourcing Tactics

Emerging outsourcing models — including managed hosting, virtual managed hosting, and application hosting and SaaS — are proliferating. They generate interest among business buyers because of their flexibility and cost effectiveness. However, they often present challenges to sourcing and vendor management professionals. Why? Contract structures and negotiation strategies optimized for the on-premise outsourcing world need adjustment to accommodate emerging models, many of which entail remote delivery and complex service delivery supply chains. Sourcing and vendor management professionals should avoid force-fitting incompatible tactics and instead adapt their contracting and negotiating strategies to the new challenges and opportunities.