Global Multisourcing Strategy: Integrating Learning from Manufacturing into IT Service Outsourcing

Abstract

“Multisourcing” is emerging as an important strategy in today’s global information technology (IT) service outsourcing arena. The existing literature on IT services provides only limited understanding of this phenomenon. However, in the manufacturing domain, a similar concept, supply base management, has been extensively examined, especially in the operations management (OM) literature. In this study, we integrate related research in service and manufacturing to investigate how to successfully pursue IT service multisourcing. Specifically, we first conceptualize a firm’s multisourcing supply base along the dimensions of breadth and depth, and theorize about the impact of these two dimensions on outsourcing outcome. Second, based on this theoretical framework, we analyze four configurations of multisourcing supply base. Finally, we use case studies of two global financial services firms to illustrate the evolution of these configurations and identify patterns of multisourcing strategy in IT services.

Keywords: IT Outsourcing, Multisourcing Strategy, Supply Base, Service Supply Chain