Key Takeaways From The Services & Sourcing Forum

I love going to our Services & Sourcing Forum. As always, our event in Chicago was a great experience. In many ways it’s the highlight of my year as Research Director of the Sourcing & Vendor Management team. The forum takes almost a full year to pull together: picking topics, finding speakers, preparing content…all in the hopes we can help our clients learn something that will help them do their jobs better.

And in return for all that work, the SVM team always learns something too. The attendees, generally senior sourcing execs from big companies, are so willing to share their experiences with us and with each other that I always leave the forum feeling productive and smart and humble. Smart because I leave knowing we provided great content but humble because I always realize at the forum how much I still don’t know (or know well enough).

What did I learn this year? Here are some key nuggets (in no particular order or pattern):

  • If you want innovation make a list of your top five challenges as a business, then give that list to your vendor’s research or product management group (this advice from Dev Mukherjee, President of Toys and Seasonal Business, Sears Holdings).
  • Sourcing teams struggle most on software negotiations rather than hardware or services, because its cost basis is not as clear as the other two (from one of our Forrester Leadership Board members).
  • Vendor risk is still a hot topic. When building a vendor management group remember that having a good process lets you then systematically decide how you are going to streamline those processes with compromising your outputs (from Dave Higham, Director of Vendor Management Services, Russell Investments).
  • Smart companies teach their vendors. I mentioned this in my keynote and several attendees talked to me about it afterwards. Telling your vendor where your company is going and what you’re going to need doesn’t take away your negotiating leverage: it makes your vendor more interested in helping you get to your goal.

On the flip side, what got attendees’ attention?

  • Managed services. This was a hot topic during keynote Q&As, track sessions, our action workshop, and at networking breaks. Big companies want to get out of the labor-based services game and move to an outcome-based model. (Despite attendees’ uncertainty about what a fair price is for a service when you can’t necessarily deconstruct the cost basis.)
  • Multisourcing. Often in relation to moving to managed services, attendees could not get enough content around doing multisourcing right and getting the most value from using multiple providers.
  • Vendor risk and governance. Vendor viability is only becoming a bigger issue. Earlier this year, the question was “will my provider survive the recession?” During the conference it was “should I stay with my provider that just got acquired (this on the heels of ACS and Perot being acquired by Xerox and Dell respectively), “how can I judge vendor viability in a cloud model if profitability depends on volume,” and “can I make sure my vendor didn’t quote me an unsustainably low price?”

For those readers that attended the Forum, feel free to add your top takeaways in the comment section.

Christine Ferrusi Ross, Vice President and Research Director