Right Sourcing
Enabling Collaboration
by
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Introduction: Sourcing as an Interdisciplinary Approach
Rien Dijkstra, John Gøtze and Pieter van der Ploeg
Shortening time to market, increasing transaction volumes, 24 x 7 business, and all of this at less cost, all puts a burden on organizations. How should one adapt to the increasing complexity and changes in the organization and its environment? According to the common view, outsourcing is one of the solutions. Outsourcing—the transfer of operations and responsibilities for specific business functions or processes to an external provider—is a billion dollar industry today and is changing the global economy.
Given the complexity of modern organizations and the dependencies between the organization and its customers, employees, partners and suppliers, sourcing activities can be quite an endeavour. Without fully understanding the strategic, tactical and operational consequences, sourcing can also be a risky business and decisions can have serious repercussions.
Our proposition is that the modern enterprise must fundamentally rethink its ‘sourcing equation’ in order to become or remain viable. When the enterprise solves its sourcing equation, it has achieved what we call Right Sourcing. Right sourcing has great potential to help organizations to optimize the use of resources and to eliminate or reduce wastes of capital, human labour and energy. It also has the potential to create adaptive organizations that stimulate, enable and improve collaboration for the mutual benefit of all of the parties involved.
To further explore the idea of right sourcing, we invited a variety of experts to write contributions for this book. We were interested in finding ways to improve the sourcing strategy and decision making. We also wanted to explore the parameters and circumstances that influence the success of right sourcing and make the dependencies with respect to people, organization, technology and economics visible and explicit and to make better informed decisions possible.
The contributions to this book cover the territory from different perspectives and with different scopes, but they all share in shedding light on important aspects of right sourcing. Essentially: How can the agility of the chosen right sourcing solution be ensured? How well is it equipped to deal with future changes? And last but not least, how can we ensure that the chosen solution is in line with the business strategy, business models, business plans and the technology that is available? For an enterprise to answer all of these (and more) questions is what we mean by “solving the sourcing equation”.
Maybe there is a paradox in finding the answer to ‘what is right sourcing’? Right sourcing has all of the properties of what is also known as a ‘Wicked Problem’ [1]. This is a problem where stakeholders are involved with differing perspectives, incomplete, contradictory, and changing requirements and complex interdependencies. With sourcing problems there is no simple, clear definition of the problem and there is no simple right or optimal solution. The solution strongly depends on how the problem is framed. On top of this, in decision making, rationality, or the lack of it, is at least partly determined by the amount of information available to the decision maker, due to the finite amount of time and resources available. This aspect of ‘bounded rationality’ [2] is also something to be aware of when finding a way of making sourcing decisions.
Nevertheless, decisions must be made and the effectiveness of the decisions depends on the quality of the analysis and how it is communicated to the stakeholders. Handling sourcing questions therefore calls for a multi-disciplinary approach and for different views and perspectives in order to obtain a good understanding of what is at stake.
The idea is that right sourcing is based on economics, organization, technology and people. With this book we hope to offer at least multiple views and aspects of sourcing to allow readers to gain a better understanding of sourcing and its ability to ensure, and deter, collaboration.
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About the Book
Right Sourcing - Enabling Collaboration puts forward the proposal that the modern enterprise must fundamentally rethink its ‘sourcing equation’ to become or remain viable. By presenting perspectives on sourcing from 21 different contributors, the editors hope to enable and inspire readers to make better-informed decisions.
“Sourcing is a business theme which gets more and more attention. But making the right decisions is not easy. Sourcing is a wicked problem. This book provides valuable insights and concepts that will help to improve decisions with regard to sourcing. I would recommend this book to anyone who wants to achieve right sourcing.”
Martin van den Berg
Enterprise Architect, Co-Founder of DYA and author of several books, including “Dynamic Enterprise Architecture: How to Make It Work”.
“Sourcing is becoming an increasingly complex task – one that requires fundamental changes in management thinking, radical new ways in which to communicate and deal with knowledge, and a totally new and different view of all the stakeholders. In this book leading thinkers in this space, do a great job in opening up the reader’s mind to possibilities for alternative solutions that integrate the human aspects in everything we do.”
François Gossieaux
Co-President Human 1.0 and author of “The Hyper-Social Organization”
“What most impressed me about this book is the scope of it’s coverage, and the level of academic rigor behind the analysis. The broad scope makes this relevant to senior executives concerned with strategy, operational executives accountable for results, and technologist on the ground. The academic rigor gives me confidence that the findings and recommendations are sound. This book will be the reference guide for anyone seriously involved in strategic sourcing.”
R. Lemuel Lasher
Global Chief Innovation Officer, CSC
“Thought provoking, occasionally frustrating and timely! As the theory of the firm is “tested” with evolving technology and globalization driving down transaction costs and enabling greater connectivity we’re presented with many different possibilities for business operating models. By exploring the perspectives of organization, economics, technology and people this book provides the reader with a compendium of theory, ideas and practical tips on “Right Sourcing” the business of IT and enabling different business models. The slightly idiosyncratic nature of a book with contributions from different authors only serves to engage the reader in the discussion. I hope the editors find a way to continue this discussion beyond the book!”
Adrian Apthorp
Head of Enterprise Architecture, DHL Express Europe
“The pursuit of sustainable development is one of the greatest challenges of our time. For this to succeed we must transform our current linear economy to a circular one. This calls for better coordination and collaboration between all players in product chains. Right-sourcing people, products and services is becoming an increasingly important topic therefore. This book provides the reader valuable insights and food for thought on right sourcing and collaboration.”
Prof. Dr. H.H.F. Wijffels
Utrecht Sustainability Institute (USI), University of Utrecht, The Netherlands
About the Author
Rien Dijkstra, John Gøtze and Pieter van der Ploeg are the editors. The foreword is written by Chris Potts, and contributing authors are Mette Axél, Thierry de Baillon, Joor Baruah, Oscar Berg, Joost van Boeschoten, Freddy Brugmans, Dick van Dijk, Edwin van Dis, Erik Doernenburg, Tom Graves, Johan den Haan, Jack van Hoof, Wouter Meijers, Steef Peters, Micha Schimmel, Menno Weij, and Rob Zuijderhoudt.