IT outsourcing is not simply a choice between insourcing or contracting with a partner

Progressive sourcing models have emerged over the past two decades to enable companies to work more strategically with suppliers in a way that creates value and drives innovation. Sourcing should be thought of as a business model between two parties with the goal of optimizing the exchange. The key to optimizing your outsourcing relationship is picking the most appropriate sourcing business model for your situation and architecting the deal points appropriately. Companies must move beyond a transactional mindset when it comes to outsourcing partnerships, as far too many fall into a classic catch-22 of wanting a strategic outsourcing solution while implementing a transactional contract. To escape this trap, it is important to architect the commercial aspects of your outsourcing deal to align with the nature of the sourcing business model.