Outsourcing is Strategic Sourcing In today's challenging business environment, companies are driven to reduce cost, increase shareholder value, and develop strong relationships with suppliers and partners. Companies have been using Strategic Sourcing principles for years to drive out cost in the supply chain, increase shareholder value and build better relationships with suppliers and partners. As Strategic Sourcing continues to mature companies are moving to new forms of relationships with their suppliers and partners. Outsourcing and Offshore Outsourcing have been growing in popularity and acceptance over the last 10 years. Outsourcing can come about through many different structures including Divestitures, Mergers and Acquisitions, Joint Ventures, or Strategic Alliances. These transactions that impact the supply chain can and should be looked at first as a Strategic Sourcing effort. By following the strategic sourcing process first, the hard work around the assessment and the subsequent decision on the structure of the arrangement should be based on sound principles and practices of strategic sourcing. There have been numerous studies completed that indicate that 50% -70% of outsourcing arrangements fail to meet the objectives laid out in the agreement. One of the main contributors to this is that the decision to outsource is not always based on a rigorous assessment, rather it is an executive edict. As a result, internal challenges run the show. Internal Challenges • Complex cultural dynamics • Political maneuvering • Inertia toward status quo • Reluctance to relinquish perceived power • Decision making • Process changes • Organizational changes The integration of technology, change management, and process to support deployment of business strategy is a cornerstone of all successful projects. While incorporating these factors appropriately into all of our initiatives, we emphasize a strong change management foundation, an area that is often the weakest within traditional consulting firms. The Mpower Group provides services structured around all phases of the Outsourcing process: • Assessment- assessment on whether or not to outsource • Selection - selection of a vendor or provider • Implementation - transition to the outsourcing provider • Enhancing Performance - opportunity to improve performance We follow a rigorous process in taking our clients through the assessment phase to make sure that the most important decision about outsourcing is done in an appropriate manner. Right decisions in this phase increase the likelihood of success for future phases and the overall Strategic Sourcing effort.