Multisourcing – It Isn’t Easy

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Multisourcing, that is, outsourcing multiple parts of a single project to multiple service providers at once, can be a life-saver when you have a huge project to complete, and are pressed for time. But it isn’t easy.

Multisourcing requires some pretty fancy financial maneuvering and management skills because it takes (single-provider) outsourcing to the nth degree (with n representing the number of providers you’ll work with).

Unfortunately, there’s no way to make the process easier. But there are several things you can do to prepare for it.

Prepare to Pay the Piper

If you outsource through a service that charges a usage fee (like Elance, Freelancer, oDesk, and Scriptlance), you’ll need to multiply that fee by the number of providers you’ll hire through multisourcing.

Note: Cancelling a project in mid-progress is not recommended, as it can cause a negative rating at some services. Plan to multisource when you’re not already in the middle of a project so you don’t incur extraneous fees and penalties.

And if you’re already in the middle of an outsourcing project, and want to cancel that project in favor of multisourcing it instead, you’ll need to tack on even more costs since most services charge a contract cancellation fee.

Another expense you’ll need to prepare for is the transition expense. Transition expenses are the costs associated with moving an in-house process to a single service provider. With multisourcing, you’ll repeat the transition process n times (with n representing the number of providers you’ll work with), and you’ll additionally have to pay their accompanying costs.

Prepare to Multi-Manage

Again, with multisourcing, you’ll have to repeat the management process n times as well (with n representing the number of providers you’ll work with). The best way to manage multiple service providers is to maintain a separate folder for each provider working on the project. Then follow the suggestions provided in the Team Building section of our outsourcing book.

Multisourcing through a middle-man (or woman) significantly reduces the amount of time you have to spend juggling n costs, n tasks, and n providers.

Multisourcing is a team effort, and it’s a great defense against inferior workmanship — often the result of continuously outsourcing to a single, overburdened service provider. But it requires more work on your part, and sometimes more money. If it makes more sense to hand the task of multisourcing over to someone with multisourcing experience, by all means, hand it on over.

External Resources:

1. Multisourcing: Moving Beyond Outsourcing to Achieve Growth And Agility
2. Multi-Sourcing Strategies and Social Capital for Corporate Computing
3. Challenges with Multisourcing