INFORMATION TECHNOLOGY MULTISOURCING AT FONTERRA: A CASE STUDY OF THE WORLDâ•ŽS LARGEST EXPORTER OF DAIRY INGREDIENTS

Organizations have used numerous sourcing strategies to lower IT costs and improve IT service levels. However, a number of these sourcing strategies have failed to deliver on their expected outcomes. Multisourcing has been advanced as a form of sourcing which addresses the deficiencies of other failed strategies. Through our case study of Fonterra, the world‟s largest exporter of dairy ingredients, we seek to explore whether multisourcing is a viable IT sourcing strategy. From the Fonterra case, we found that the benefits of multisourcing IT infrastructure stemmed from an ability to lower IT costs, improve IT service levels and enable access to specialist vendors and emerging technologies. The costs and risks of IT multisourcing were centered on the ongoing management of vendors and the underlying importance of a service management layer in organizations.