Outsourcing to multi-sourcing: A study of global multi-nationals in context of this changing trend

Abstract

Earlier ‘outsourcing’ was almost synonymous with single outsourcing, where companies used to delegate the project to a single service provider. But with time, they decided to test the waters by outsourcing different functions to different service providers. This is what ‘multi-sourcing’ is all about. It not only keeps the competitive spirit alive among the service providers, but also weakens their bargaining powers with the companies that outsource. In multi-sourcing, the companies enter into different agreements or contracts with the different service providers which only cover the function that that particular service provider is expected to perform and all the clauses associated with it. It is up to the company to decide whether the different contracts should be linked to one another or not. The company (or the customer, in this case) can be assumed to act as the integrator of the different services and it is responsible for putting all the parts together and bringing the entire project to completion.