Smarter Outsourcing: An executive guide to understanding, planning and exploiting successful outsourcing relationships

Procurement – or partnership?

To a large extent this problem comes down to the fact that the bulk of outsourcing decisions has historically been driven by the CIO, head of logistics or a business unit head, charged with trying to resolve short-term cost pressures. The resulting decision making has all too often been reactive, embodying a focus on quick fix procurement rather than partnership. This is also the root cause of a continuing and widespread confusion between sourcing, which is essentially a broad procurement exercise, and outsourcing, which – as we have pointed out repeatedly in this book – is a tool more akin to M&A.

Assuming the CEO and board are seeking to achieve not just a one-off cost benefit but permanent, structural improvements ...