As outsourcing continues to become more common in the business environment the top question that business executives are asking is now if they should outsource or not, but instead if they outsource with one or several vendors. Upfront it may seem as if one outsourcer is a an easier option for managerial purposes and for cost reasons, however, more and more business professionals are finding that working with several vendors -or multi-sourcing as the practice is now being referred to as- is actually the best choice for overall success when it comes to finding viable outsourcing solutions.

Shared ground between outsourcing and multi-sourcing

Regardless of whether you choose to work with one or several vendors the decision to outsource fundamentally stays the same. Before a decision can be made cost analysis should be performed that shows the actual costs of outsourcing, evaluation of departments must be concluded, contracts must be negotiated, and providers must be interviewed. On average, it can take anywhere from six to 12 months to properly appraise whether outsourcing is appropriate for an organization or not which is a cost unto itself.

After the decision is made to outsource, several other factors must be resolved such as knowledge transfer costs, training and start up costs, internal resource management of the chance, and software licensing fees. Therefore, if the concern of a company is focused on if one or several vendors is necessary it should be instead focused on if outsourcing is necessary. This is due to the fact that once the decision to outsource is closely evaluated it will become evident which areas demand outsourcing and which ones do not. A large part of the decision to multi-source or outsource is dependent on how related the departments that are facing off shore development are.

Growth of multi-sourcing

In a global survey completed in 2006, 45% out of 100 COIs that were questioned responded that they favored the practice of multi-sourcing with multiple vendors over working with just one vendor to fulfill their company requirements. Out of those surveyed, a small percentage of just 17% responded that one vendor outsourcing was their primary choice. With these factors in mind, four years down the line the trend has only increased to the point where many organizations now multi-source without a second thought.

A large reason why businesses decide to use multi-sourcing instead of one vendor outsourcing is because they have multiple needs from several different departments. Once a company decides that it will outsource several components it needs to seek out a professional outsourcing team that can meet their demands. However, as outsourcing services tend to fall into two separate groups: business process outsourcing and technology services outsourcing, one outsourcing team often is not the perfect team to meet all of a business's needs. Instead an organization is forced to look into multi-sourcing so that all of their outsourced departments are handled by experts and industry leaders and innovators.

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