APRIL 20198IN MY OPINIONOutsourcing or "SortaSourcing"?By Jeff Palm, CIO, Allianz LifeOrganizations often leverage vendor partners in different ways. This includes some that provide end-to-end solutions while others provide more "vertical" capabilities­geared toward a particular function(s). If done correctly, these relationships can yield great results, both in terms of capabilities as well as costs. However, many organizations still struggle with how to optimize these relationships and as a result, often fall victim to a trap I like to think of as "SortaSourcing."Here, I'd like to talk a little bit about some of the common pitfalls that exist when it comes to effectively implementing these arrangements, and highlight a few useful ideas to help maintain effective and valuable outsourcing relationships.Micromanagement "SortaSourcing"Often, an IT organization will farm out a set of activities, but despite best intentions, will ultimately manage at a micro level of detail, reviewing and verifying every single change, the execution of all items, and generally not ceding any level of real responsibility to the provider. To use an analogy, they simply place their hand on the handlebars, directly on top of the provider's hands.There are obvious shortfalls associated with this level of micromanagement.First, and foremost, this represents a situation of dual costs. You are paying that provider, but also continuing to pay your own people to oversee them at an unrealistic level of detail.Second, since the provider takes explicit instructions from you at every turn, they do not grow their own capabilities. Rather, they end up being an executioner Jeff Palm
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