In one word, “”, a perfect example of what a dedicated and thorough sourcing event can avoid. I don’t need to know all the details behind the 36 hour crash of the website or the specific reasons for Google, RedHat and Oracle experts to come to the rescue to understand that someone somewhere did not conduct sufficient due diligence prior, during and after the website launched.

Many sources have identified several “vulnerabilities” including software, hardware and security issues within the site’s operation, all risks that large scale program like this cannot afford. Granted, the website is back on live and the bugs have been fixed, but at what cost?

This may look like a rather easy thing to avoid but unfortunately, this is not an uncommon situation for corporations out there either. While many will criticize this particular event because of its magnitude and relevance to society, this is a typical situation in the strategic sourcing world. More often than not, companies engage supplier to provide services out of their core competencies and that ultimately cannot competitively provide, or do it inadequately, in some cases because the services providers lack the capabilities, in many other cases because the client is not communicating the needs and the business requirements transparently, because of privacy concerns, poor communication, and most frequently because of internal imbalance, in other words, the client itself is not clear on what they need.

Sourcing events are most effective when two ingredients combine: one, (what we call) “the scope of work” is clear, and two, the suppliers understand it, oh, and one more thing, it has to be in that order. Otherwise, companies will end up hiring a company that “seems” to have what it takes, the one with the best salesperson, or simply the cheapest (this one being the popular choice). What many companies don’t understand is that any mix of the above, may also not the best choice.

Best practices of strategic sourcing are intended to allow companies select suppliers that can offer the best possible service at the lowest cost, this includes going beyond the requirements and incorporation “value adds” to the mix while leveraging data from the market place. A clear scope of work will help you get there. Our sourcing experience (and common sense) dictates that a supplier who doesn’t understand what you need, will charge you more for what they offer you (to mitigate their risk), and much likely, if your scope is not clear to you either, you will probably end up paying for it, or re-sourcing the event to “fix the bugs”, in some cases like the one describe above, it will be both.
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Diego De la Garza

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