Using multiple suppliers to mitigate the risk of IT outsourcing at ICI and Wessex Water

Abstract

The paper presents the findings from empirical research on IT outsourcing in two British companies: ICI Plc and Wessex Water. Both organizations have pursued a selective sourcing approach using multiple suppliers in an attempt to minimize risks and maximize benefits. Whilst the majority of existing literature on selective sourcing concentrates on the 'mega-contracts', this research explores some of the issues and concerns of companies with small to medium sized outsourcing contracts. The findings suggest that selective and competitive sourcing may offer the client company value-added benefits, although it is important to develop strengths in the areas of contract management and negotiation and competitive benchmarking and performance management.