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Representative POMs are described for Sourcing Decision at each level of maturity.

1Initial

• Practice

  Best endeavours of available personnel.

2Basic

• Practice

  Make sourcing model decisions on a case-by-case basis.

  Outcome

  The organization can achieve its goals in areas such as cost, delivery, and resource management for a specific sourcing project contract.

  Metric

  % of sourcing decisions that are reviewed

• Practice

  Create business cases to evaluate sourcing cost factors.

  Outcomes

  • Business cases are occasionally created for evaluating a limited number of sourcing options.
  • Sourcing options are changed based on subjective decisions being taken periodically.

  Metric

  % of evaluations that are driven by an objective assessment in a business case

• Practice

  Consider alternative options only when there is a shortfall in the performance of a contracted supplier.

  Outcome

  An emergency backup supplier/service is available should a shortfall in supplier performance occur.

  Metric

  # of available alternative options

3Intermediate

• Practices

  • Establish a set of common criteria that can be applied when selecting the sourcing model.
  • These might include business criticality, protection of the organization's intellectual property, core competencies required, risk exposure, criteria for supplier evaluation, and so on.

  Outcome

  An appropriate sourcing model can be selected on the basis of more objective common business criteria.

  Metric

  # of criteria considered when selecting a sourcing model% of sourcing decisions based on the appropriate sourcing model

• Practices

  • Create business cases to evaluate sourcing decisions and operational effectiveness against current business objectives.
  • Where appropriate, these business cases should include strategic objectives such as compliance with IT key controls and regulatory certification.

  Outcome

  Business cases are consistently created for evaluating most sourcing options.

  Metric

  # of business case sourcing evaluations yearly

• Practice

  Identify viable alternative options for key services (e.g. exit options to avoid supplier lock-in).

  Outcome

  There is increased flexibility for the key services in the context of a changing business environment.

  Metric

  % of services having alternative options

4Advanced

• Practice

  Make all sourcing decisions with reference to an established sourcing model that takes account of market forces and stakeholder feedback.

  Outcome

  Sourcing decisions are aligned with the organization's business environment.

  Metric

  % of sourcing decisions that adhere to the appropriate sourcing model

• Practices

  • Establish a re-evaluation process for all key sourcing decisions.
  • Base this on an objective, quantified assessment of continued value delivery against strategic objectives, and changing business context. Use business cases in a comprehensive decision-making process for evaluating sourcing options.

  Outcomes

  • Sourcing strategy and decisions relating to key services are subject to regular, objective reassessment.
  • Business cases include an appropriate balance of quantitative and qualitative aspects.

  Metric

  # of re-evaluations conducted# of criteria taken into account

• Practices

  • Ensure the sourcing decision includes an assessment of alternative options and includes an alternative design.
  • For example, an organization might consider bringing previously outsourced services back in-house as one way of protecting against supplier lock-in.

  Outcome

  Alternative sourcing options are always considered.

  Metric

  % of services having alternative options

5Optimized

• Practice

  Review the sourcing model selection approach continually and refine as appropriate.

  Outcome

  Previous sourcing decisions and changing IT and business strategy can be learnt from.

  Metric

  % of actions completed arising from reviews of the sourcing model

• Practice

  Re-assess all viable sourcing options against current and anticipated future business context; strategy and objectives; and quantified criteria such as value at risk, cost, innovation, and flexibility.

  Outcome

  All current viable alternatives to the selected strategy are identified and assessed.

  Metric

  % completion of actions arising from re-evaluation of the strategy

• Practice

  Maintain up-to-date business cases for all viable sourcing options and use performance data, market research, benchmarking options, audit rights, and other quantifiable data to validate initial business case criteria.

  Outcome

  Alternative sourcing options are practicable at any time.

  Metric

  % of alternative sourcing options being kept up to date