Daily Archives: September 19, 2006

Managed Services

In Part XI of The Sourcing Innovation Series, John Martin of Building SaaS authored a guest post on “The Future of Sourcing … for Services” which I discussed further in Part XII where I indicated that I not only agreed with John in that services sourcing is going to become a major part of your future sourcing initiatives but provided you with the outlines of an approach that I thought you could use to start getting a grip on your services procurement today.

Little did I know how timely these posts would be at the time I was preparing them. It turns out that as John and I were collecting our thoughts, Aberdeen was releasing their Supply Chain & Logistics Market Alert The Next Wave: Managed Services for Supply Chain. In this market brief, Aberdeen indicates that in a recent benchmark of 180 companies, 58% indicate that they are highly interested in using at least one of the following managed services:

  1. Network design and strategic inventory optimization
  2. Supply chain execution
  3. Trade compliance
  4. Supply chain planning
  5. Periodic Operational Improvement Analysis and System Tuning
  6. Data Quality Monitoring and Cleansing
  7. Data Mining and Analytics
  8. Supplier On-boarding

The study also points out that midsize companies are most likely to be interested in exploiting the expertise and resources of their technology vendors to augment their internal staff, though large companies are highly interested in supply chain execution support.

However, one of the most interesting facts is that companies that view their supply chain capabilities as “above” average for their industry are twice as likely as their peers to be highly interested in wanting to use managed services to help in supplier on-boarding and they are also more likely to desire trade compliance managed services. In other words, top performers appear to want to take advantages of any services that can help them perform better.

Finally, I’d like to emphasize that managed services offer companies the flexibility of gaining additional staff resources and expertise without having to hire people internally or having to abdicate complete process control to a third party-organization. In other words, it appears that, managed properly as part of an overall supply chain strategy, managed services can effectively augment (but not replace!) your internal supply chain teams.