Organisations that follow a formal process to develop a business-driven sourcing strategy are more likely to achieve expected cost, performance and business outcomes, and take advantage of opportunities for innovation and low-cost IT from outsourcing, according to Gartner, Inc.

The sourcing strategy process is complex and repetitive, involving multiple steps, each with deliverables. As a result, effective execution of the sourcing strategy phase requires investment in processes, people and tools.

“In the sourcing cycle, the sourcing strategy is the deliverable that defines the direction, portfolio, risk, and overall business case for costs and benefits,” says Claudio Da Rold, vice president and distinguished analyst at Gartner. “As such, this phase is critical in laying the foundation for the organisation."

Da Rold notes that organisations that fail to master this initial phase in the sourcing life cycle are subsequently less likely to select appropriate providers, negotiate a sound contract and effectively manage the deal.

Gartner has identified 10 key steps in the sourcing strategy phase to help CIOs, IT leaders and sourcing managers understand what steps they need to follow to in order to get more from outsourcing:

1. Set context and objectives: Define the business's overall approach to sourcing, the priorities as well as rules and principles that will drive the sourcing strategy and every subsequent sourcing decision and activity.

Define specific business, service and technical goals for sourcing initiatives and relevant measures of success.

2. Assess service delivery 'as is': Assess the organisation's current internal and external capabilities. Look at the cost, service performance of the internal and external sourcing and service contracts that are in place already.

Take a critical look at the enterprise architecture and determine if it is adequate to support the service delivery evolution required to achieve objectives.

3. Assess service and multisourcing management capability: Determine the level, position and maturity of the 10 multisourcing competencies within the organisation to determine current and required capabilities.

Evaluate knowledge and skills for managing service delivery on business, application and infrastructure processes.