Sourcing issues are the greatest challenges in today’s business world. What the company truly spends on technology and other operations, and the measures it takes to drive new capability or reduce costs that are meaningful to investors are key.

Do you outsource or execute an internal change program? Do you pursue traditional large-scale vendor contracts or selective sourcing? These riddles are at the heart of all sourcing decisions. They affect everyone from senior management down to rank-and-file employees, as well as the bottom line (and share price) of every corporation.

Accepting the Challenge

Such questions are in the mind of CEO’s whose typical first act is to convene some sort of evaluation committee whose outcome (it is hoped) will be a specific game plan that produces a harmonious sourcing transition. To outsource (or not) is the primary question every executive asks. And fear of being outsourced is in the heart of most every worker.

Adept CEO’s understand that the devil is in the details. All steps taken must be carefully measured. The gifted ones know once that outsourcing, or significant in-sourcing, is broached as part of a total “sourcing strategy”, life as the company knows it will forever change, even if no action is ultimately taken.

Addressing changes in these strategies begins in the abstract, but the objective is to develop a cogent plan. No two are alike. There are, however, similarities in transitioning from the oblique to the specific; and they start with the evaluation committee itself.

Assembling the Team

The best strategy teams work in an unbiased environment, which limits the agendas of the individual members to enhance the overall business mission. These members must be altruistic and committed to finding the right answers: even if some of them encroach on their turf. The biggest mistake comes from haphazardly convening the wrong team then trying to keep its deliberations quiet. This creates confusion, concern and angst among employees, especially if nothing is produced. Do this quietly, informally and off-site. If you can get through step one (having a basic working strategy) that mission’s accomplished.

The team must be matrix in nature and understand (or at least appreciate) outsourcing’s impact on each individual part of your business model. Their backgrounds in finance, lines of business and project leadership help set defined goals for the strategy. They understand what’s possible within the outsourcing and shared services world and translate those possibilities to your business model. Collectively, these team players must understand the fundamental questions you clearly pose. “What’s the inspiration for outsourcing, and why? What are our goals? What strategies are we willing to adopt (and not)?” This group must think through your business model and determine what makes sense (from both configuration and location perspectives) for both the current base case and future state of the organization and develop a number of scenarios.

As you survey the work of this team, weaknesses to either commitment or results might be detected. Often, a trusted, experienced, unbiased third-party that compliments this group is a powerful advantage that can “nudge” it toward the outcomes you’re searching for or, if appropriate, take a stronger leadership role to find the right answer.

It’s easy to get caught in a perpetual loop when looking at the big picture and trying to translate it into tactics (especially when factoring employee morale) since today’s fundamental outsourcing driver is the offshore/cost element. It’s changing everything. The pure labor arbitrage savings, if approached properly, are significant and can be used to find new ways to do work once moved, or simply finance the cost of change in other areas of the business.

Lead, Champion and Own

Finally, as CEO you have to own the strategy and understand the facts clearly. You also must ask yourself if you’re going to take ownership of this strategy or simply champion it and leave it to the troops to figure out. Are you prepared to see it through? You are going to ride a lot of heat (justified or unjustified) for what you are doing. The rank and file will generally be “against it.”

The dilemma with a strategic sourcing effort (other than the fact that it is often protracted) is that you have to make, and then live with, hard decisions. Are you willing to champion this day-to-day, to the end?

Build a good team. Ask for qualified outside help if you need it. Give the group solid and clear parameters to see, discuss and develop. And understand that a clear strategic plan the team produces (that you are willing to take ownership of) is the beginning of what will be an exciting and positive new chapter in your company’s history.