Strategic sourcing of services at a global level

Abstract

The rapid globalization of multi-national companies has forced the companies to concentrate in their core business and outsource the remaining supplementary services to other potential service providers. Our study focuses particularly in the purchasing of these supplementary services, to be specific, facilities services from the service providers.

This study is taken place in a multi-national company which has its global footprint in more than 40 countries in the world. At the moment, the sourcing of facilities services at each of these facilities of this company is operational and locally-led which has resulted in the decentralized sourcing structure and lack of visibility in the service spends for these services.

A change or shift in sourcing strategy is proposed by analysing the literature and the case companies which had the same problem and approach towards the strategy sourcing of services at a global level. When there is change in strategy, in order to put them in action, it is important to bring change in the entire sourcing structure and the organizational structure. This kind of shift takes place in phases rather than in a single step.

The change in strategy would result in harmonization of services both at the process-level and the supplier-level ending up in a stabilized and centralized sourcing approach for facility services. This would ultimately lead to the increased purchasing power of the case company and the decreased spend rate for the facilities services.