Points of View

The Trouble with Sole Source – Five ways to keep your sanity during a non-competitive transaction

HfS has seen a dramatic increase in non-competitive outsourcing deals in the last 24 months and we expect to see even more in the future. The rationale is compelling: both parties get to a deal faster, without competitive pressure, while building a stronger relationship from day one with more money left over for exciting things like innovation and scope expansion. Except most of the time, none of these is true.

HfS has spoken to real-life practitioners on both sides of this deal, and learned that while they usually do create value, the process is no less painful than a competitive transaction. In this HfS Best Practice Report, we will share some observations about sole source deals: first from the perspective of the provider and then from the client’s—it is absolutely critical, regardless of which party you represent, that you understand the other’s perspective. Finally, we offer some practical suggestions to avoid the uglier side of sole source.

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