Multi-sourcing – the challenges for Governance and Compliance
Thursday 24th May 2012
Governance and compliance are vital in creating a solid framework for multi-sourcing in preparing for success over a contracts implantation and lifetime. While multi-sourcing offers numerous benefits in flexibility and value for money, procuring multiple suppliers can also lead to downsides.
The event on the challenges faced in implementing successful governance and compliance strategies began with a presentation on the challenges of multi-sourcing from a suppliers view by CSC. Jo Carruthers and Darren Taylor talked on the critical factors necessary for success in multi-sourcing. While the objective is to avoid concentration of one single supplier Jo and Darren made the point that employing more than three or four suppliers can create difficulties in creating a unified project. As with any contract it is vital that clear guidelines are established in what the scope and responsibilities of the project will cover.
Difficulties poised by separation must not be underestimated. Multi-sourcing must not produce confrontation between suppliers and the whole process should allow for clear communication led from the client down. The presentation highlighted a staggered approach as providing the most efficient model, promoting service integration and ensuring that all stages work smoothly. CSC covered the main challenges that multi-sourcing presented.
The presentation moved to practical reflections on intent and reality, presented by David Travis & Steve Briggs from The Co-operative banking group. From the beginning the contract between suppliers and end users must set out clear and realistic expectations. The focus must be on the end goal of the project rather than on the specific contractual obligations of individual suppliers.
Craig Chaplin from DWF pointed to the need to look at the whole picture rather than a focus on the best price, while a flexible approach produces the best results. Craig focused on effective governance as key to enabling faster, better decision-making and that it is more important to long-term multi-sourcing success than any other factor.
Alison Haigh Head of Procurement at UKAR presented a guide to ensuring compliance and governance in outsourcing. The UKAR guide agreed with CSC on the need to ensure clarity in the roles assigned to suppliers. While covered throughout the event the UKAR presentation took efforts to demonstrate the need to monitor the results of the collaboration on a daily basis and the need to look for undetected vulnerabilities and prepared for unforeseen obstacles.
The event presentations and group discussions saw surprise from attendees surrounding the lack of understanding regarding responsibility and the degree of inflexibility of governance within multi-sourcing. Group discussions following the presentations highlighted best practice, including the creation of an engagement model the most senior people in the process in order to avoid out-of-sight out-of-mind position.
Emphasis needs to be places on avoiding ‘loss in the noise’ by presenting a simple and clear contract. Care must be used to ensure that a one-size-fits-all approach is not followed, instead a different regime for each different project and the stages within the framework must be followed.
The information that is gathered and presented needs to be acted upon in order to make the data valuable. Lessons should be learnt from the information processed with follow-up actions resulting from results. In the end governance and compliance must be driven by business outcomes, the right behaviours that must be promoted should lead to favourable business outcomes as the end goal.
