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IT Multi-Sourcing at Adidas

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Apeksha Mathur

on 11 October 2016

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Transcript of IT Multi-Sourcing at Adidas

IT Multi-Sourcing at Adidas

The Adidas Case
Pros and Cons of IT Multi-Sourcing
Pros and Cons of IT Multi-Sourcing
Conclusion
How Adidas’ IT multi-sourcing model differs from the models used by other multi- sourcing clients (e.g., BP and Shell)
Should Adidas’ IT group change its structure
What CIO Brecht means by vertical and horizontal structuring, its Advantages and Dis-advanatges
What is Multi-Sourcing
The disciplined provisioning and blending of business and IT services from the optimal set of internal and external providers in the pursuit of business goals.
Industries that use Multi-Sourcing
Manufacturing
Automotive
IT
Why use Multi-Sourcing
To maximize the effectiveness of an enterprise's IT by ensuring that various elements are sourced to the best possible providers.
Offers an organization superior flexibility and greater adaptability when choosing outsourcing solutions
Careful and well-thought selection of vendors
Company size – Tier 2
Talent
Pricing
Overlapping skill sets
Neutralized vendor domination
Subsidized learning opportunities
Created early success stories
Strategized to help vendors acquire critical mass in business volume


Shifted overall project accountability to vendors
Refrained from assigning dedicated activities to vendors
Choice of vendors with overlapping skill sets
Better understanding of clients business functions and domains


Adidas Multi-Sourcing Structure
Shell Multi-Sourcing Structure
Pros
Improved Quality
Reduced costs
Increased leverage
Reduced strategic/operational risks

Cons
Management overhead
Transaction costs
Lowered trust between the vendor and client
Varied comfort levels with different vendors
Change in client management board

Pros
Increased learning opportunities
Increased competition drives innovative services
Increased productivity
Cons
No definitive ROI (increased investments-time, money on resource+talent)
Reduced profit margin
Lack of client support (client doesn’t like working with the bid winner)

Group-3

Thank You !
YES !
Reason
Steady increase in net sales world-wide
Matrix organizational structure
Setting up captive center at a low-cost location
Streamlining special projects to captive center
Better control on processes
Efficient negotiations
Effective Vendor management
Sustaining competition
Horizontal and Vertical Structure of Adidas
This is the traditional management structure where the CEO/Owner is at the head and management is top down
CEO -> CIO-> Senior Management (SMT) -> Sourcing team -> Procurement -> Project Managers
Clear lines of authority, Better control over which projects to prioritize, Efficient
Can suffer if the management is bad, lot more red tape and approval processes which can slow down projects, you feel like a cog in the giant machine

A flat origination which is more suited to small businesses or start ups
Employees are empowered to make decisions and complete projects without much supervision
Work gets done faster due to lesser bureaucracy, employees feel much more satisfied
Decisions on which project is a priority can be an issue, not every employee is an independent worker
Horizontal Structuring
Adidas wanted to merge a horizontal structure under the business oriented vertical management structure
Better resource allocations
Reduces redundancies across COEs
Better control of vendors
Sustain vendors motivation – new structure could realize long term savings in cost as RfPs will be across horizontal structures
Based on Jim Harvey's speech structures
For the Client
For the Vendor
Invested in fostering good working relationships with all vendors
Managed vendor expectations
Adidas
Alpha
IT services
Innovative solutions

Beta
Innovative solutions

Gamma
IT services

Shell
AT&T
network,
telecommunications
T-Systems
testing,storage
EDS
End User Computing
Key actions that were taken by adidas to increase
the odds of success for its
multi-sourcing implementation
Who are We?
Apeksha Mathur
Bhargav Arora
Chaitra Bangalore Prabhakar
John Mark Mathew
Satish Kumar Reddy
Xiaoyi Ji

Vertical Structuring
In terms of Adidas
Full transcript