Multisourcing

'''Multisourcing''' is the concept of working with multiple suppliers who are also competitors.<ref name=CapG>{{cite web |url=https://www.capgemini.com/wp-content/uploads/2017/07/tl_The_Keys_to_Successful_Multisourcing.pdf |title=The Keys to Successful Multisourcing |author=Nick Gill |year=2008 |accessdate=July 4, 2019}}</ref> Large-scale buyers, such as the U.S. federal government, may want to feel assured that there is more than one supplier for an item.

It has been described as the opposite of "one neck to wring".<ref name=Neck1.BizJ>{{cite web |website=Austin Business Journal| url=https://www.bizjournals.com/austin/news/2016/10/06/software-maker-real-savvy-raises-new-funds-after.html |title=Software maker Real Savvy raises new funds after pivoting, hitting profitability |quote=... one neck to wring ... a single source of technology |first=Christopher |last=Calnan |date=October 6, 2016}}</ref> The opposite is called sole-source.

Intel, a large corporation, was not "enough" for the x86, and so others such as Advanced Micro Devices and Cyrix were needed.

==Models== There are two primary models for multisourcing: Prime Contractor and Client models:<ref name=CapG />

===Prime Contractor model=== A ''Prime Contractor'' may use ''subcontractors''. Either way, the client has "one neck to wring".<ref name=Neck1.BizJ/>

===Client model=== The client is the ''system integrator''.<ref>{{cite web |website=CrownCommercial.gov.uk |url=https://assets.crowncommercial.gov.uk/wp-content/uploads/RM3804%2520Multi%2520sourcing%2520v1.pdf |title=Sourcing}}</ref> Multiple outside sources,<ref>{{Cite web |url=http://www.computerweekly.com/opinion/Why-the-public-sector-is-turning-to-multi-sourcing |title=Why the public sector is turning to multisourcing|date = May 2012 |accessdate=October 31, 2015 |website=computerweekly.com |author=Sarah Burnett}}</ref> each with their own "perceived core competencies",<ref name=CapG/> provide services. This does not preclude the outside suppliers from further subcontracting.<ref name=CapG/>

==Sole sourcing== Although "no-bid contracts are illegal under European Union procurement law",<ref name=CDN.sole>{{cite web |url=https://cdn.ymaws.com/www.wipp.org/resource/resmgr/gm5_podcasts_rev/Sole_Source.pdf |title=Sole Source |accessdate=July 4, 2019}}</ref> "there are exclusions and exceptions" in the UK's rules,<ref>{{cite web |url=https://europa.eu/youreurope/business/selling-in-eu/public-contracts/public-tendering-rules/index_en.htm |title=Public tendering rules: UK decision to invoke Article 50 |accessdate=July 4, 2019}}</ref> and "U.S. law permits .. sole source contracts under specified circumstances".<ref name=CDN.sole/> The US Government raised concerns in 2009 about "excessive reliance" on sole-source contracting and use of "contracts with a limited number of sources".<ref>{{cite web|publisher=Office of the Press Secretary|url=https://obamawhitehouse.archives.gov/realitycheck/node/2076|title=Memorandum for the Heads of Executive Departments and Agencies. Subject: Government Contracting|date=4 March 2009|accessdate=27 June 2023}}</ref>

The assurance that the identical and in some cases, certifiably equivalent,{{clarify|date=May 2020}} item is available seems to defy a statement that "[t]here is no optimization achieved through working with a single provider",<ref name=OutYes.EA>{{cite web |title=Multisourcing - a comparative to outsourcing |url=http://www.ea-inc.com/documents/ea_WPaper_Multisourcing-A%20Comparative%20to%20Outsourcing.pdf |author=Bobby Varanasi |date=September 2006 |accessdate=July 4, 2019}}</ref> especially when "sustainable" capabilities exist.<ref>[https://www.law.cornell.edu/cfr/text/48/part-6 48 CFR Ch. 1, Part 6]</ref><ref name=CDN.sole/><ref name=OutYes.EA/>

===Cost plus and other arrangements=== Both the much-disputed Iraq reconstruction no-bid contracts and those awarded after Hurricane Katrina contained "cost-plus" provisions which "guarantee contractors a certain profit regardless of how much they ultimately spend", according to the ''Wall Street Journal''. Critics claim that such agreements "remove any incentives for private companies to control expenses, which are paid for by the tax-payer".<ref>[http://tiger.towson.edu/~apeak1/writtenwork/thoughtpieces/radicalsforcapitalismareviewofareview.html Thought pieces: who pays]</ref>

A no-bid contract is a military or government contract that is made directly with a corporation, bypassing the standard process of bidding. These contracts can be made much more quickly than a typical contract; however they are often fraught with suspicion. After the 2003 war in Iraq, the Halliburton company, previously headed by then vice-president Dick Cheney, was issued a $2 billion no-bid contract for fuel distribution. Speed is usually the rationale for such contracts.

Just days after Hurricane Katrina, in September, 2005, the Bush administration awarded no-bid reconstruction contracts to companies such as Fluor Corp., Bechtel, Shaw Group, CH2M Hill Cos, and Halliburton's Kellogg, Brown and Root.<ref>{{cite web|url= https://www.nbcnews.com/id/wbna26647780|title=Audit: Feds wasted millions on Katrina work|website=NBC News|agency=Associated Press|date=September 10, 2008|accessdate=September 14, 2025}}</ref><ref>{{cite web|first=Martin|last=Wolk|url=https://www.nbcnews.com/id/wbna12875663|title=Contractors rake it in as they clean it up|website=NBC News|date=May 30, 2006|accessdate=September 14, 2025}}</ref>

==History== Although it was recently defined, multisourcing has been practiced in the market since competitors started to produce alternatives to IBM's datacenter products in the late 1980's.<ref>{{cite book|first=Louis V., Jr.|last=Gerstner|title=Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround|publisher=Harper Business|location=New York City|date=2002|ISBN=978-0060523794|page=76}}</ref> Firms like Gartner<ref name=Gartner/> and Forrester Research<ref>[http://www.forrester.com/Research/Document/Excerpt/0,7211,42569,00.html Outsourcing Providers Need A Strategy Rethink To Address Buyers' Shift To Multisourcing]</ref> pushed the term into the public eye.

==Future== Multisourcing's strength, first recognized by Gartner Group in 2005, is to continue providing disciplined services via a blend from internal and external sources.<ref name=Gartner>{{cite book |title=Multisourcing: Moving Beyond Outsourcing to Achieve Growth and Agility |url=https://books.google.com/books?isbn=1591397979 |isbn=1591397979 |author1=Linda Cohen |author2=Allie Young |publisher=Gartner Inc |year=2006 |page=236}}</ref>

In workshops, providers are taken through business scenarios to confirm details like method, data content and timescales for each cross-provider interaction. The outputs of these workshops are operational level agreements (OLAs)<ref>{{Cite web|url = http://www.information-age.com/it-management/outsourcing-and-supplier-management/123457348/how-to-make-multi-sourcing-work |title=How to make multisourcing work |date=September 17, 2013 |accessdate=November 1, 2015 |website=Information Age |author=Mansel Luke}}</ref> which are signed and agreed upon by all providers to maximize performances and ensure that everyone is aware of the requirements of their job.

==References== {{reflist}}

Category:Business terms Category:Contract law Category:Pricing Category:Procurement