The One-Two Punch of Sourcing Value: Saving Money & Improving Process Quality

Cost reduction continues to play a principal role in driving outsourcing initiatives across industries, however, as these programs continue to mature, companies are looking for additional value beyond solely salary arbitrage.

Executives are seeking services partners that can bring value to all  aspects of their business. Sourcing and Procurement programs have, therefore, become a priority for many companies that aim to cut costs, drive efficiency, and improve supplier performance. Not only can these programs decrease salary costs of 100 people by 20 to 30 percent, for example, but they can also impact many millions of dollars of direct and indirect spend through advantageous sourcing contracts that realize ongoing benefits.

In this report, HfS Research outlines how many chief procurement officers are evolving their whole approach to outsourcing. To illustrate this dynamic, we examine the case of the security software giant, Symantec, and its sourcing relationship with managed business services provider, Genpact, who have partnered to drive over $100 million in savings out of their cost base and to implement sourcing programs that generate real business value.

Since the onset of their engagement in 2009, these two companies have built a mature sourcing model that leverages both onshore and offshore resources to support Symantec’s global footprint. In less than three years, this partnership has been able to drive a savings yield of 17 percent across Symantec’s businesses and has positively influenced organizational processes, transparency, and supplier management.