Some of the big offshoring players are now relying on 'speed dating'—a quicker and cheaper channel for selecting the vendor for their back-office and IT outsourcing needs—in an economic climate that is forcing these firms to reduce their sourcing time and costs.
Under traditional outsourcing procedures, a contract worth $30 million to $100 million and above, could take up to nine months to finalise a vendor. This long process includes inviting bids from several vendors, spending time in understanding each vendor's competency, and preparing a final shortlist of suppliers to choose from.
Speed dating cuts through the expenses and time invested in clinching outsourcing contracts allowing firms to select a vendor within 60 days. The experienced outsourcers are now beginning to avoid an exhaustive analysis of the entire vendor landscape and are instead preferring to keep the work with their existing suppliers.
Experts who spoke with ET, on conditions of anonymity because of non-disclosure agreements with their customers, said companies such as Glaxo SmithKline (GSK) and several European banks have awarded contracts through speed dating during past few months.
"Until a year ago, we could afford to spend months in assessing vendors, and finally award contract after multiple procedures. Now, with hardly any room for those large complex contracts, we have to consider shorter routes to sourcing," admitted a senior official at a FMCG company, which recently awarded $30 million contract to a large MNC vendor.
He requested anonymity because he is not authorised to disclose third party contract details to media. Outsourcing advisory firms such as Equa Terra, which counts BP, Exxon Mobil and American Express among its top customers, have recently started advising some of its customers on speed dating.