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Sourcing

We have unparalleled experience in advising organizations on how, where, and with whom to partner for a wide range of global outsourcing and offshoring opportunities.

Sourcing programs can be extremely large investments, with huge potential for transformational value creation as well as significant potential risks. In addition, today's enterprise technology environment is seeing several significant shifts—the business is getting more involved in IT decision making, IT is being consumerized, and IT is expected to operate at two speeds to deliver on digital priorities. Collectively, these risks, shifts, and challenges will require companies to seek out the latest, independent advice on the most appropriate strategy and implementation issues around sourcing.

As companies redefine their worldwide operating models, strengthen their core capabilities, and become more digital, they depend on a wide range of sourcing solutions to give them access to global talent and scale as well as a modernized IT environment, superior processes, and innovative services. Our dedicated team enables clients to deliver their services and operations in a scalable and cost-effective manner that fully captures the potential of global sourcing. We provide support at every stage, from defining global operating models to strategy design to successful implementation and value capture.

Our work falls into two streams:

Sourcing strategy

The first step in realizing the full value of sourcing is to define the global operating model for business support services (e.g., HR, legal, finance) as well as for business processes and IT, based on the strategic priorities of the business and then use that model to determine whether capabilities should be built in-house or outsourced, and onshore or near-/offshore. We help clients assess where strategic partners can significantly improve operational and process performance across the business, drawing on our in-depth understanding of the practices shown to improve innovation, productivity, and agility as well as detailed benchmarks specific to the relevant industry sector. We also help design the optimal governance structures, processes, and accountability models, which are critical for success. Based on our client experiences, a typical sourcing transformation can result in cost savings of 20-40+ percent as well as improved service levels, increased business responsiveness, and the ability to enter new emerging markets more quickly.

Sourcing delivery and execution excellence

Excellence in sourcing delivery and execution is a critical lever in driving savings of as much as 35 percent or more in select functions; in creating greater flexibility for businesses to scale up or down in response to changing market conditions; and in enabling companies to avail themselves of expert capabilities such as advanced analytics, not easily or economically developed internally.

Therefore, once a sourcing strategy has been defined, McKinsey supports clients in establishing their extended enterprises and making them a success. While remaining vendor and location neutral, we apply our extensive experience and knowledge of international service providers and government organizations to client-specific advice and support on setting up partnerships with strategic providers and fine-tuning operational and organizational efficiency. We help clients manage multi-sourcing complexity by exploring and brokering different cooperation and location models and by integrating new deal mechanisms that include risk-sharing, and flexible, short-term contracts. McKinsey brings to these tasks a comprehensive and detailed performance-metrics database (360° benchmarks) that covers more than 100 leading delivery centers across multiple locations and an analysis of best practices that have driven success for other leading companies. Utilizing this knowledge base, we are able to assist each client in determining the optimal geographical footprint to leverage global talent pools and manage risks.

Finally, as is necessary in any major business transformation, we invest heavily in helping clients achieve enterprise-wide buy-in for their new setup.

Featured experts

Michael Bender

Senior Partner, Chicago

Alexander Edlich

Senior Partner, New York

Featured Capability

Horizon360

Horizon360 sourcing tool

Helps our clients compare proposals from different providers through an objective, analytical framework to assist the selection of the most suitable one.

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