An entire library could be written on this topic. In the ITSM world, sourcing is considered part of the service design model and something every business customer plans well before the service requirements are finalized.
There are distinct benefits in doing this because the service itself will take on different characteristics and offer different benefits and costs depending on the sourcing model.
Sourcing is a complex part of the industry, and as new technological innovations emerge, so do new sourcing models. For simplicity sake, we will focus on the various ITSM elements, and three basic sourcing models—insource, outsource, and co-source—and tie these with the standard ITSP types.
Outsourcing is the use of a type III ITSP and offers a wide array of design model opportunities. Many organizations will use sometype of outsourcing, generally for services that the business wants to divest of certain risks and costs. Industry trends can influence design models toward outsourcing, and every business should be aware of the hidden costs and risks that this can produce.
An example of this was the surge of offshoring customer support contact services that gained popularity in the 90’s. The driving catalyst was the easy access to cheap labor forces in third-world countries. Many organizations rushed into this model and paid a price for not understanding the importance of all the ITSP competences or lack thereof.
Contributing factors in many of these cases were a lack of empowerment for the ITSPs and often understanding of the customer needs, difficulties in communication, overambitious cost cutting leading to unskilled labor, underestimating the true impact of time zone differences, and sometimes an over-reliance on technology. Offshoring can be a perfectly viable, cost-effective choice, and it has evolved significantly in the last decade with many of these factors being addressed.
Changes in industry trends such as these have made outsourcing effective and affordable and widened the scope for what type of services can be outsourced.
An increasingly popular and commonly available model, this hybrid model comes in a variety of shapes and sizes. At a basic level, it should be considered a shared risk and reward-based model. All ITSP types can participate in this, and as such, it offers the highest level of flexibility to meet a business’s service needs. Highly flexible can also mean highly complex, so care is needed to determine whether this is a viable model for your needs.
Typically, co-sourcing involves the cooperation of a number of ITSPs in the provision of service either for individual services or a group of them. In this model, clarification of the roles and responsibilities of each ITSP and the business is crucial to avoid unnecessary overlap, duplication, or gaps in service coverage and management.