How SMARTSOURCING is helping companies reduce project costs

Nov 26, 2022

Thomas M. Koulopoulos, CEO and founder of Delphi Group, Perot System's technology and management advisory firm, believes that companies must shed non-core business activities in his new book, "Smartsourcing: Driving Innovation and Growth Through Outsourcing." This type of outsourcing, known as "smartsourcing," will allow businesses to focus on innovation, which is ultimately what distinguishes one company from another.

Many things are being advanced in the current digital era. "Smartsourcing" appeared among them to describe a consistent approach to outsourcing: when you switch your operational business approaches to achieve high effectiveness. Simply put, smartsourcing is the process of getting the most bang for your buck after enlisting a single dedicated expert or a solely devoted development team.

What exactly is "Smartsourcing"?

Smartsourcing advocates for the use of partners who can assist a company in focusing on its core, balancing risk and opportunity, lowering costs, increasing innovation across all processes, and finally, putting in place perceptions to significantly improve all of these considerations, both socially and politically.

Outsourcing vs. Smartsourcing

Although the terms "outsourcing" and "smart outsourcing" seem to be interchangeable, there are important differences between the two distinct business strategies If you decide to outsource, your main goal will be to reduce costs and shorten the project schedule. It's a tactical tool you can use to save time and improve your performance instantly. However, this action will not have a significant impact on your business. Smartsourcing is more than just outsourcing.

“While an organization may be able to define its core competencies—which it will keep in-house— and its extreme outliers—which it will outsource—the area in-between these two extremes is often difficult to outsource since it is still intimately linked to supporting the organization’s core,” Koulopoulos writes.

In short, choosing smart IT services means going further and deeper into the field of outsourcing In addition, you can expect additional skills from your intelligent service delivery team, such as exceptional innovation and professionalism Alternatively, you can simply consider smart outsourcing as the best outsourcing.

Starting the process of smart sourcing

Mapping the organization's present services and technological infrastructure, including those under any active outsourcing contracts, is one of the initial stages of smart sourcing. The greatest approach to monitor how well it is working and how it affects users and residents, as well as to start understanding how it may be controlled for the best outcomes, is to do this.

Along with an evaluation of the crucial or commodity nature of each component, a detailed grasp of the organization's information architecture is also essential. Knowing exactly which elements go where is crucial to getting off to a strong start since changes to one element always influence other sections of the entire.

Additionally, it is crucial for public sector organizations to maintain their expertise and skills and to engage in education, particularly because keeping a core internal workforce allows for some degree of adaptability. Knowledge is key since most of the time, smart sourcing is focused on "out-tasking" rather than "outsourcing."

Benefits of Smartsourcing

Smartsourcing promises sensible changes for the better, including:

1.    Efficiency remains unchanged.

2.    Professional.

3.    Improve basic skills.

As a result, businesses tend to find a dependable partner who handles all of their business issues and promotes long-term growth. The professionalism of the smartsourcing team is responsible for the desired outcomes.

Before performing the tasks, smartsourcing considers cost optimization, the political situation, and the balance between risk avoidance and opportunity capture. Furthermore, smart sourcing strengthens your company's core competencies.

Quality of Smartsourcing

Because smartsourcing is so complex, proper preparation is required to ensure its true value and quality. Here are four critical steps to take:

1.    Performance should be measured: A closer examination reveals that you ought to double-check the areas you intend to outsource. Assess your current effectiveness and your capacity to monitor progress.

2.    Order and talk about vendor relationships: Consider everything that influences customer behavior and incorporate your research results and priorities into future communications. Then, with external vendors, establish clear expectations.

3.    Find out more about your external stakeholders: To accomplish this, use a "spotless" costing approach to build mutual trust. All of these actions will prepare you for negotiations. Pay close attention to how the priorities are set during the discussion. Share your beliefs, the characteristics of your workplace culture, and your targeted outcomes in an open and honest manner. Meet all the participants in your business and evaluate their attitudes and skills

4. Examine the market: Last but not least, don't skip the market analysis phase. In smartsourcing, the particulars of the native customs and transportation are always relevant; thus, plan beforehand to prevent unpleasant shocks. To widen your selection and choose the ideal partner, compare multiple local markets.

The business should double-check every aspect before outsourcing business procedures. Businesses need to be able to assess their existing performance and track their advancement.

Can you describe how technology integrates into the corporate smartsourcing process?

Although smartsourcing is a corporate decision, the business and underlying technology are inextricably linked. The most crucial thing to remember when thinking about how technology fits in is to pay close attention to how the company using smartsourcing and the vendor of the service integrate their technologies to create agility and speed up innovation. Making ensuring a process keeps up with every other area of your organization once it has been outsourced is not as simple as having someone else conduct it for you. Greater synchronization and effective coordination, which may involve several partners, are necessary for smartsourcing. That problem is essentially one of technology.


Smart sourcing can offer a productive middle ground between fully outsourced and internal delivery of IT services that maximizes the advantages of both to build a technology environment that is future-proof. It can also assist organizations in selecting the ideal combination of cloud platforms, hybrid systems, and on-premise systems to build a multi-cloud strategy that meets their specific requirements while balancing investment in both internal and external skills. The former should only be paid for when there is genuine value in doing so, and the latter should be built up to increase their control over the long term. Smartsourcing takes it a step further by demonstrating to businesses how to collaborate with service providers not just to save costs but also to boost creativity in every facet of their operations.

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