Impact sourcing in the Managed Services industry

September 25, 2013

Last week, Trellis’ Katie Gove co-moderated a panel discussion on impact sourcing at the Managed Services World Congress which was held in London. Katie and her co-moderator, René Herlaar, previously Head of Networks for Vodafone, sparked a lively discussion among the panelists which included Rajat Sarna, Principal Category Manager Networked Managed Services, Vodafone Procurement Company; Phil Irvine, Managing Consultant, PA Consulting; and Lori Silverstein, Chief Sales Officer, Digital Divide Data.

Impact sourcing is outsourcing that benefits disadvantaged people in low-employment areas. As opposed to foreign aid, impact sourcing uses market mechanisms to distribute wealth via employment. Vendors bid for and win projects already budgeted for in buying organizations. Impact sourcing is simultaneously focused on solving a pressing social problem or addressing an industry gap while generating revenue for investors. While clearly involving socially responsible sourcing of services and products, impact sourcing transcends CSR by not only focusing on behaviors and codes but also focusing on leaving a lasting and sustainable economic upswing in disenfranchised areas. The impact sourcing market is growing; impact sourcing within BPO alone is expected to be a 23 billion USD market by 2015. (Rockerfeller Foundation).  By way of comparison, the fair trade market (commodities and handicrafts) is only an estimated 5 billion USD.

Our panel discussed the extent to which operators and service providers can and should include impact sourcing as a criteria in decision making. Is it ever good for business? What are the value propositions?

Our panelists contributed valuable insight as to the quite substantial value that impact sourcing can deliver to buying organizations, e.g. geographic proximity; niche service delivery functions; sustainable and highly-motivated workforces; local knowledge of “the field” including logistics and access to local/regional decision-making bodies critical for approvals and permissions; and flexible/scalable models more adaptable than those provided by the buying organization.

If you would like to read more about impact sourcing, here’s a link to and article on the shared vision of impact sourcing by The Rockerfeller Foundation.