Strategic Sourcing

Aligning strategic relationships to
organizational goals

Changing Sourcing Models

Deciding whether to source IT has become an increasingly complex question with the introduction of automation and cloud-driven solutions. Traditional strategic sourcing processes are being disrupted by technology solutions that are designed to replace human support models. As such, the drivers for sourcing have shifted from simply weighing cost savings to seeking best-of-breed strategic sourcing solutions, value-based services, flexible pricing, and increased customer satisfaction. With this complexity and changing business models, it is easy to make the wrong sourcing decision. We support our clients across the entire sourcing lifecycle from strategy, provider selection, implementation, and governance.

Strategic Sourcing Case Study

Partnerships with technology providers enable cost cutting measures necessary for survival. In this strategic sourcing case study, we helped a large power generation, transmission, and distribution company modernize its IT systems, enabling the integration of smart systems such as smart grid, distribution management systems, demand response systems, smart metering and smart home technology. Our outsourcing advisory recommendations brought best in class capabilities to create a reliable infrastructure aligned with compliance requirements. These technologies not only optimized costs, they provided added value to their customers through improved responsivity and competitive prices.

Strategic Sourcing Strategy

We understand what is needed to improve operations through strategic partnerships and diversified sourcing solutions.

Our breadth and depth of experience navigating the complex environment of managed services transactions helps our clients to optimize IT operations in alignment with core business objectives. Through designing and structuring the right mix of technology, services partnerships, and governance, our clients are able to go beyond cost cutting to achieve their strategic business objectives.

We use our proven methodology to define strategic sourcing strategies that establish a business case for change, identify sourcing opportunities, and help clients evaluate sourcing partner capabilities that will support future requirements. Our strategy provides a holistic view of the sourcing landscape based on our deep understanding of global sourcing solutions, industry needs, service provider capabilities, procurement strategy, and emerging technology trends. Our recommendations balance both long term strategic goals and short-term tactical priorities grounded in an understanding of our clients’ vision, key business drivers, and constraints. We then prioritize the client’s requirements to develop a roadmap with recommendations, milestones, and timelines for implementation.

Sourcing Health Check
Sourcing Strategy Development
Provider Capabilities Assessment
Price Benchmarking

Sourcing Transaction

Our services extend past the selection of sourcing partners; we establish the best deal structure for our clients.

In today’s business environment, there are many types of agreements with a complex array of contract terms and provisions. Although having choices can give the client leverage, it can make these agreements difficult to understand and a challenge to ensure high value results.

Our contract experts negotiate strategic relationships that create long term value for the enterprise. We structure the entire transaction to meet each client’s unique goals. We also assess existing contracts to ensure that clients are getting the full value of those existing agreements. Perhaps most importantly, considering today’s heightened regulatory environment, we ensure that our clients remain compliant and minimize risk.

Our team of strategic sourcing consultants provides clients with an objective methodology for the selection of service providers and minimizes misaligned expectations between client and service provider. Our strategic sourcing analysts work closely with our affiliate law firm, Avasant Law, to negotiate contracts that reflect our client’s objectives, constraints, and risk tolerance. We provide the technical expertise to structure master services agreements, develop services statement of works, design the performance criteria, and determine pricing. We ensure that the client’s delivery strategy, performance and business terms are properly captured in a contract that is realistic and enforceable.

Contract Optimization
Software License Optimization
Provider Evaluation and Selection
Due Diligence Management
Contract Development and Negotiation

Sourcing Implementation

Awarding a contract is only the beginning of the relationship between the client and service provider.

Successful outsourcing relationships involve change management that enables providers to meet their requirements while allowing midcourse corrections when needed. However, many relationships never fully meet expectations. Too often, the service implementation process is undisciplined, and miscommunication is the rule. There are poorly defined roles, KPIs, and expectations.

Avasant’s sourcing implementation solution helps clients navigate the inherent complexities of sourcing relationships. Our strategy roadmap details the steps necessary to realize a flourishing environment capable of managing critical priorities. One of our first areas of focus is on human capital and internal organizational culture. We assist clients with integrating a team of internal retained resources with both new and existing service providers. Our transition planning and execution oversight mitigates any disruption to the business. In order to realize long term goals, we develop a roadmap to achieve high quality governance and oversight. This approach reinforces the responsibilities of each party and ensures that the requirements of the contract are being met.

Transition Planning and Execution
Retained Organization Design and implementation
Program Implementation and Oversight

Sourcing Governance

Poor execution and lack of ongoing governance are the primary reasons strategic goals and objectives are not met.

Organizations face key challenges while executing their As a result, over 80% of all organizations today fail to successfully manage such mechanisms, and as a result, fall short in achieving their goals and objectives. Effective governance requires a proactive, process-based approach that measures progress and performance.

Avasant supports clients throughout the lifecycle of their partnerships to ensure performance and tangible financial results are realized. We work with internal stakeholders and external service providers, creating a comprehensive governance environment. Our governance approach comprises a robust program management process to foster alignment and track progress. Our governance consulting includes formal management of scope change and impact, tracking of contractual commitments and deliverables, and risk management. Our comprehensive solution ensures sourcing strategies are executed as planned in full alignment with the business objectives.