multisourcing

Multisourcing is a sourcing strategy in which an organization obtains services and capabilities from more than one external supplier rather than relying on a single vendor. The approach is applied across information technology, software development, systems integration, and managed services, and can involve both external providers and internal teams working together.

The term contrasts with traditional outsourcing to a single provider and with loosely coordinated multi-vendor arrangements. Multisourcing is often guided by a formal governance model that coordinates work across providers, defines interfaces, and ensures interoperability. In practice, a prime contractor or dedicated service integrator may orchestrate the work, while service level agreements and standardized processes help align performance.

A common governance model for multisourcing is Service Integration and Management (SIAM), which focuses on coordinating multiple service providers, maintaining end-to-end accountability, and managing service interfaces, data exchange, and technology stacks. Key elements include a defined operating model, common standards, risk and security controls, and transparent performance measurement across all providers.

Benefits of multisourcing include greater flexibility and resilience, reduced risk of vendor lock-in, access to specialized skills, and potential for competitive pricing. It can also improve capacity to scale and adapt to changing requirements, especially in complex or hybrid environments.

Challenges encompass higher management overhead, increased coordination and integration complexity, potential mismatches in quality or processes, and stricter security and compliance requirements. Success relies on clear scope, well-defined interfaces, a chosen governance approach (often SIAM), robust vendor risk management, and a deliberate rollout plan with measurable milestones.