We live in an unpredictable world, but the one thing is clear: the future belongs to outsourcing. These pre-pandemic yet still relevant statistics demonstrate the possibilities outsourcing brings.
According to a more recent report (2020), cost reduction, organization transformation, and enabling agile practices are the main goals of vendor outsourcing. Today outsourcing is more than just a B2B tactic.
In other words, outsourcing is crucial for business growth. But what type of outsourcing can benefit your company the most? The decision is usually between options:
In this article, we will analyze the benefits and drawbacks of single vendor vs multiple vendor outsourcing.
Let’s begin with what seems easier: single-vendor contractor. The single vendor meaning lies in uncomplicated cooperation between two parties — buyer and seller. The model’s name is self-explanatory, so, without further ado, we are diving into the benefits and drawbacks of single-vendor outsourcing for your company.
The smart approach to time, money, and human resources creates a beautiful picture. Why would anyone ever consider other options besides single vendor outsourcing? But before jumping to a conclusion, we suggest you familiarize yourself with the drawbacks of single-vendor outsourcing.
Now, when you are well-versed on the strong and weak sides of single outsourcing. Let’s analyze in which ways multi outsourcing can be gainable for your company. It is self-evident, multi-vendor meaning denotes project management option that engages with several suppliers to complete a product. In which way is this model better compared to the one we already discussed?
Now you have acquired profound expertise in choosing a single vendor vs multi-vendor strategy. What’s next? To cement the understanding of types of outsourcing, let’s summarise.
Many companies choose a sole vendor outsourcing option for its time and cost-efficient results — no one can argue that time, cost, and HR are a win for sole vendor choice. Multiple-vendor outsourcing undoubtedly wins the battle in a higher quality of niche services and the ability to improve risk mitigation.
These are some undeniable conclusions on single vendor vs multiple vendor types. However, there is a grey area on this subject: time. Yes, we have already counted time as a win for the single agency. Yet, it is crucial to mention that the picture differs if your company has a higher production budget. Launching multiple processes with different vendors simultaneously can significantly reduce production time.
Here is a comprehensive guide based on which way you should go based on your company’s priorities.
No matter what your vendor strategy choice is, we would like to conclude with a quote by management consultant Peter Drucker, “Do what you do best and outsource the rest.”
We tried our best to offer an unbiased, deep analysis. To wrap up, it is vital to mention that despite some drawbacks of multiple-vendor outsourcing, the industry is moving in a multi-direction. As of 2020, the Deloitte survey reported that businesses favor an adjustable sourcing strategy with multiple interchangeable vendors.
We hope to offer you an analytical and helpful illumination of the subject. If you still have some questions, we are here for you. We at Dataxdev are always in the ready-to-code mode. We offer a vast array of services: JAVA, .NET, iOS, Android development. We are proud of our Leading B2B Service provider experience and our contribution to innovative projects in diverse industries: from healthcare to vacation rentals.
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