Sourcing (right-sourcing)

For any service combination, choosing the right sourcing option depends on a number of factors, including: the volume of transactions, the degree of specialisation needed to deliver the service, the degree of risk associated with timely and accurate delivery and the degree of fl exibility possible in "fitting" the services to available sourcing options. The generally recognised options are as follows:

• Outsource to a commercial provider.
• Join a shared service.
• Establish collaborative arrangements.
• Retain the in-house provision.

In practice, the "best possible option" is a combination of the four options listed above. It matches the sourcing solution to the needs of the organisation and the characteristics of the service. Each component will have its place.

No one option will perfectly fit all needs. The aim must be to obtain services from the best possible source in terms of value, service and risk, i.e. to design an optimum hybrid solution of one or more of those options. Whether the perfect hybrid solution is worth pursuing will depend on cost/benefit and risk analysis of the implementation and ongoing costs. In this analysis it should be recognised that doing nothing really means to retain the existing services - which is itself probably a hybrid solution but not of optimum design.