In today’s dynamic technology environment, sourcing is increasingly utilized as a key component of global IT service delivery. As sourcing is a highly specialized and complex process, many IT and business executives consider hiring a specialized sourcing advisory to support the development of a sourcing strategy, the execution of an insourcing initiative, or the management of an outsourcing transaction.
The role that a sourcing advisor plays in the strategy development and orchestration over the sourcing process is vital to achieving the desired business outcomes. Conducting a thorough analysis of sourcing advisory firms is key to finding the best fit firm for your project.
Developing an RFP is one way to evaluate capabilities of sourcing advisory firms to support your project. There are two key components of a Sourcing Advisory RFP – information about your company, and information that you should request of all advisory firm bidders. To break it down we’ve highlighted some specific recommendations across both of the dimensions.
What to share about your company:
- What your company is trying to accomplish and why you are doing this project. Explain your chief outcomes from sourcing.
- Any recent transformation, consolidation, and change efforts impacting your operations.
- Any forecasted transformation, consolidation, and change efforts in the 1-2 year horizon.
- At a high level, operations at your company and which business units your IT organization supports. Are global operations covered? Are foreign entities involved?
- Major software packages, systems, and applications you utilize.
- The size/magnitude of your IT operations (budgets, locations, employees, and any more granular information if readily available)
- The scope of IT services that you want evaluated
- What your infrastructure looks like (Mainframe, UNIX, Linux, etc…)
- Your network (provider, insourced/outsourced, domestic/global scope)
- Any key business cycles if any should be considered (spikes in demand, etc.)
- What work if any you’ve already done in thinking about a sourcing strategy (core vs. non-core analysis, financial analysis, risk, culture, etc…)
- Your budget constraints or ballpark cost if you have one in mind.
- Any timeline constraints (contract expirations, renewals, key milestones, etc…)
- A desired timeline on the Advisor Selection Process (when questions are due, when responses are due, when on-site presentations will take place if requested, when a decision will be made, etc…)
What to ask of all bidders responding to your RFP:
- Their methodology including key steps and deliverable types
- Their philosophy around sourcing and advisory services (cost focused, transformation focused, outcomes focused, template driven, custom, etc…)?
- The focus of their firm (procurement staff-augmentation, management consulting, IT strategy, etc…)
- How their methodology enables comparison of costs to market, and addresses evaluating the performance, risk, cultural and process dimensions for sourcing.
- Their knowledge of the service provider space
- Their staffing model – how many consultants would be on the project? How is the engagement team structured? Will they be onsite or remote?
- Resumes or biographies of the proposed on-the-ground resources. Be explicit that you want to see the actual engagement team, not a sales or partner-level oversight team Information about the team’s experience in working in sourcing advisory engagements A detailed project timeline
- A not-to-exceed cost, or a fixed price bid, with documented assumptions.
- A description of time requirements from your staff to support the process (both from which roles/levels, and how much time throughout the key phases)
- Disclosure of any financial relationships or partnerships with outsourced / managed service providers (including research sales, event/website sponsorships, workshops, client relationships in other business units, and provider-focused consulting)
- At least 2 executive-level references and case studies
To learn more about Wavestone US’ services, visit http://www.wavestone.us/capabilities/.
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