The Yin and the Yang of Multiple Suppliers

Ann All

As with anything in business -- and in life -- there is a yin and a corresponding yang with outsourcing deals involving multiple suppliers.


Increasing the number of suppliers adds flexibility, and complexity.


Recent studies by PMP Research, among others, show that companies are developing a preference for using multiple suppliers rather than the "one stop shopping" deals that have been traditionally favored in outsourcing.


Among the advantages, according to this IT Week article: "competitive tension" that often yields more advantageous deals. (We think this means suppliers often do some pretty creative tap dancing if there's an ambitious understudy in the wings.)


A new outsourcing model does create a need for new management techniques. An early leader in this area appears to be global banking behemoth ABN Amro, which is utilizing a number of interesting techniques to keep its vendors in line. Among them: having IBM serve as a "guardian," accountable for resolving issues with not only itself, but other suppliers.

Add Comment      Leave a comment on this blog post
Aug 28, 2006 6:13 AM Paul Roberts Paul Roberts  says:
IBM has deleoped a horrible reputation in the outsourcing world.  They offer low wages compared to the industry standard with no benefits.  No one except people living with mom and dad, freash out of college could survive being employed by them.  Reply

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