Art and science in sourcing

People involved in service delivery and sourcing often experience a challenging dichotomy in their jobs.

On the one hand, they tend to be senior people who are accustomed to making decisions based on factual information. On the other hand, many of the decisions they contemplate incorporate a high degree of "art".

To highlight this dichotomy, consider a couple of the more common sourcing decision categories that senior executives face.

For comparative assessments of operational efficiency, many people try to apply techniques of benchmarking, assuming they are highly factual, only to find that a quartile placement against a broad group of dissimilar companies, all weighed retrospectively, doesn't answer the question.

For comparative assessments of service delivery locations, many people analyse statistical information such as wage rates, inflation factors and cost of housing only to find that such data doesn't provide the holistic guidance they were seeking.

Applying "art" to such decisions brings its own set of requirements. The first is that "art" requires a practised or experienced person to be effective--just think of how the talented but first-year athlete or musician compares with an equally talented but also experienced individual. The second is that "art" cannot become a cover for bias--just think of how an external expert's opinion can be more highly valued than an internal perspective.

As a senior executive, the key is to construct a team with a balance of internal and external experts who have sufficient expertise and experience to successfully apply "art" and science as appropriate to the service delivery and sourcing decisions you are facing.

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Michael Rehkopf

Michael has more than 20 years of experience in operations, strategy and sourcing covering all major parts of the globe. He has also worked for Australian, Canadian, German and Japanese companies in both business process outsourcing and IT outsourcing.
Michael's industry experience includes the financial services, manufacturing, telecommunications and travel sectors. He leverages this diverse industry experience and his university background in accounting, IT and his Master of Dispute Resolution, to assist clients in the development of business strategies and the implementation of sourcing strategies. These include the associated evaluation, negotiation and organizational change.
Michael is currently a partner at TPI, the world's oldest and largest sourcing advisory firm. Prior to joining TPI, Michael held leadership positions with Siemens Business Services, OpenPlus International, Mitsubishi Electric and Netron.