The shift from mega outsourcing deals to short-term multi-vendor outsourcing practices is resulting in several shortcomings in the sourcing arena. Though multi-vendor outsourcing is a good cost-cutting strategy, in the absence of an effective governance mechanism it creates a mess within and outside the organizations amounting to business risk. An innovative operational strategy or model known as `multisourcing' offers the best approach and practices to effectively manage and control a portfolio of service providers.

Globally firms have begun to realize that in today's highly competitive business environment, it is essential to focus on core activities rather than getting involved in activities that are non-core to their business. The non-core activities are being increasingly outsourced to a specialized service provider or an outsourced vendor who can perform these tasks most cost-effectively. By practicing outsourcing, companies focus on their core functions to improve efficiency, reduce costs and increase profitability. But beyond that, companies are hoping to improve productivity and quality, reduce the amount of time required to create new products and respond to orders, inquiries and complaints from customers.

With the immense success of outsourcing, firms are increasingly tending to outsource more and more of their functions. At present, outsourcing is predominantly extended to various functional areas such as R&D, Human Resources Management (HRM), finance, accounting, Supply Chain Management (SCM), etc. Besides, the significance of `outsourcing' is also increasingly realized and adopted in certain sectors like manufacturing, banking, insurance, pharma, healthcare, etc.

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