How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
In traditional IT outsourcing and multisourcing arrangements, clients isolate vendor
tasks, resulting in modular sourcing structures. But this approach can stifle vendor
competition, result in vendor lock-in and hinder organizational flexibility. This article
describes how adidas adopted a new type of multisourcing strategy, which embraces
vendor overlaps to overcome these constraints, and delivers a range of benefits.
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Agenda
Drawbacks of a Modular Structure for IT
Multisourcing
adidas Business and IT Background
adidas’ Multisourcing Journey
Summary of adidas’ Multisourcing Journey
Lessons Learned from the adidas Case
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Drawbacks of a Modular Structure for
IT Multisourcing 1/2
 During the last decade the modus operandi of IT
outsourcing has undergone a major transformation.
While earlier outsourcing deals were primarily
executed with a single vendor, more recent deals
often involve multiple vendors.
 When a firm contracts with multiple vendors for IT
projects and services, this is called IT multisourcing.
 Compared to traditional single-sourcing arrangements,
key benefits include lower IT costs resulting from
vendor competition and best-of-breed services,
higher IT service quality and lower vendor
dependency.
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Drawbacks of a Modular Structure for
IT Multisourcing 2/2
 The predominant approach to structuring IT
multisourcing arrangements is based on the concept of
vendor modularity.
 This approach follows the same logic as single-sourcing
models: activities given to a vendor have to be
“separable” from the activities performed by the client and
other vendors, respectively.
 By assigning dedicated work areas (“modules”) to each
vendor, IT multisourcing clients employ a traditional way to
deal with complexity in organizations, and to limit
coordination costs. They break down large sets of IT
activities into modules to make them more manageable.
 What could go wrong?
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Major Benefits and Risks of IT
Multisourcing
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Agenda
Drawbacks of a Modular Structure for IT
Multisourcing
adidas Business and IT Background
adidas’ Multisourcing Journey
Summary of adidas’ Multisourcing Journey
Lessons Learned from the adidas Case
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
adidas Business and IT Background
 The adidas Group is a major player in the global sporting goods
industry. With more than 50,000 employees worldwide and annual
revenues of about $16.6 billion adidas is currently the second
biggest sporting goods company.
 Globalized markets and increased competitive pressure in the
sporting goods industry forced industry players to work to tight
profit margins and be very conscious of cost, which led to the
outsourcing of IT function/its parts.
 Since the late 1990s, the strategic focus of the adidas Group has
shifted from being a pure wholesaler to engaging in direct
interactions with end consumers around the globe which required
flexible, more innovative and consumer- oriented IT solutions.
 As a consequence, IT was no longer regarded only as a mere
operational tool, but also as an important contributor to
competitive differentiation and value creation.
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Centers of Excellence & Single
Vendor Outsourcing at adidas
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Agenda
Drawbacks of a Modular Structure for IT
Multisourcing
adidas Business and IT Background
adidas’ Multisourcing Journey
Summary of adidas’ Multisourcing Journey
Lessons Learned from the adidas Case
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Phase 1: Introducing IT Multisourcing
& Overlaps
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Phase 2: Leveraging IT Multisourcing
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Vendor Overlaps and Interfaces in
Phase 2
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Agenda
Drawbacks of a Modular Structure for IT
Multisourcing
adidas Business and IT Background
adidas’ Multisourcing Journey
Summary of adidas’ Multisourcing Journey
Lessons Learned from the adidas Case
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Summary of adidas’ Multisourcing
Journey 1/3
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Summary of adidas’ Multisourcing
Journey 2/3
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Summary of adidas’ Multisourcing
Journey 3/3
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Benefits Realized from adidas’
Multisourcing Journey
“By ‘horizontalizing’ these functions, … they’ll be
able to better leverage process tools and also
… bring in a lot of synergies, which might help
them in [further] reducing the cost and
increasing the quality.”
“[The IT multisourcing strategy made] the whole
agility and flexibility of adidas IT better”
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Agenda
Drawbacks of a Modular Structure for IT
Multisourcing
adidas Business and IT Background
adidas’ Multisourcing Journey
Summary of adidas’ Multisourcing Journey
Lessons Learned from the adidas Case
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Lessons Learned from the adidas Case
1/2
Lesson 1. Embracing Vendor Overlaps
Promotes Ongoing and Healthy Vendor
Competition
Lesson 2. High Granularity in Vendor Overlaps
Reduces Vendor Onboarding Risk and
Accelerates Vendor Learning
Lesson 3. Provide Vendors with Opportunities
for Growth to Sustain Competition and
Cooperation
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How adidas Realized Benefits from a Contrary IT Multisourcing Strategy
Benoit A. Aubert, Martin Wiener, Carol Saunders, Reinhard Denk & Tobias Wolfermann – September 2016
Lessons Learned from the adidas Case
2/2
Lesson 4. Vendor Overlaps Create Both ShortTerm and Long-Term Benefits
Lesson 5. Less Granular, Horizontal Vendor
Overlaps Help Reduce Coordination Costs and
Improve Accountability
Lesson 6. Orchestrate the Work Performed by
Multiple Vendors as an Ensemble
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