The Classic Sourcing Model Conundrum - Global In-house Center (GIC) vs. Third-party Provider

21 May 2013
by Sakshi Garg



The choice of a sourcing model is tricky for most organizations looking to adopt global sourcing. The question is not just about selecting the model (GIC or Third-party service provider) in the short-term, but also ensuring that it generates value for the enterprise over the long-term. The interplay of multiple sub questions (listed below) further adds to the complexity of the decision:

  • How should I allocate work between sourcing models?
  • How do I diversify my sourcing model concentration risk?
  • Are there any differences between the sourcing models in terms of their employee value proposition?
  • What are the key considerations in sourcing model decision?
  • Is one model better/preferred for sourcing complex processes?
  • How should I compare costs between GICs and service providers?

While an organization may ultimately adopt one or both the models to source global services, across organizations both models seem to be coexisting. However, based on the situation, context, maturity of an organization one model may be more appropriate than the other.


This report discusses the considerations involved in making a sourcing model (GIC vs. third-party provider) decision and provides pointers for a robust comparison of the two models. It also covers prevalent sourcing model configurations and their applicability to various buyer situations. Following is the high level table of contents of the report:

  • Background
  • Executive Summary
  • Considerations for sourcing model selection
  • Global sourcing model configurations
    • Skewed configuration
    • Hybrid configuration
      • Segmented sourcing configuration
      • Mixed sourcing configuration
  • Operationalizing global sourcing model selection
  • Conclusion

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