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Evolution of Sourcing Models: From Cost-Savings to Quality Service

To talk about the evolution of sourcing models means to talk about the transition that the outsourcing industry is undergoing today. In recent years the industry has moved away from praising the cheapest providers in search of cost-savings, and instead it began to first look at the quality of vendor services, and consider outsourcing models as a business strategy.

Don’t get me wrong. Cost-savings is still among the top reasons why CIO and company executives choose to outsource, but it’s no longer just about the money. Companies also search for expertise and talent, which will ultimately give them an innovative product and help them become leaders of their industry.

That is why the quality of service and ultimately the quality of the vendors’ resources are increasingly more scrutinized. CIOs no longer want a cheaper service, they want to have their software, but with better service—and indeed that is why the term “SaaS” (Software as a Service) was coined. CIOs want a talented expert, or a whole group of them, working on their project and innovating their technology and they want to develop a good relationship with their providers to maximize workflow and cooperation.

The history of sourcing models reflects this change perfectly. At first the models were all about cost savings. Now vendors provide more service-based models that are akin to joint ventures and partnerships. Cost-savings may still be one of the top reasons to outsource, but service quality is what makes outsourcing ultimately worthwhile. Read this white paper for more information on the Evolution of Sourcing Models.

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