ABSTRACT
Introduction Expectations concerning the value military organizations produce have evolved (McDonough 2005). In the last decades, parallel with developments in civil society, military activities have become more knowledge intense and sophisticated, involving – or even organized around – advanced networked technologies. The comprehensiveness, speed, and flexibility of operations have increased, and their expeditionary nature has introduced new challenges such as strategic air and sea lift, and new risks. At the same time, support for military organizations tends to be modest and short-term oriented in developed societies. These expectations and contingencies make sourcing a desirable and often indispensable approach to value creation. Sourcing complements and is intertwined with ongoing transformation and modernization programs initiated in defense organizations after the end of the Cold War (de Waard and Kramer 2008). Sourcing forces organizations to systematically identify and think fundamentally about alternative ways to effectively and efficiently create value. It refers to issues concerning the who does what question. We define sourcing as the process of concentrating service delivery within the military organization, and the process of cooperating with, and contracting out to other public and private organizations. Sourcing therefore includes the ‘make-option’ (in-sourcing), the ‘buy-option’ (out-sourcing) and also all kinds of ways to create value by ‘working together’ with different partners. Sourcing of services relates to both the core organization, commonly based in the home country, and current mission theaters (e.g. Chad, Iraq and Afghanistan). Questions that may arise in the sourcing domain are diverse. For instance, concerning its core activities, a department of defense may need to address questions like: Do we need our own strategic air lift? Or: Shall we hire military personnel for current missions in low-income countries? Questions may also concern the supporting services of the armed forces. For instance: Do we need our own catering organization in Afghanistan? Or: Shall we outsource all logistic support to a private military contractor? While military organizations are traditionally highly integrated, in terms of primary and supportive processes, their deliverables are considered to be public goods. Contemporary stakeholders increasingly expect efficiency, flexibility,
global deployment, and effectiveness. This requires sourcing scenarios that are not only applicable to the peripheral activities (Goddard 1997), but also to the military organization’s pivotal value creation process. Since the 1990s, a vast literature concerning sourcing in relation to the armed forces has emerged (e.g. Fredland 2004; Hartley 2005; McDonough 2005; Singer 2004; Suman 2007). This literature distinguishes a variety of perspectives on sourcing and identifies many different concepts, models, types and forms of sourcing. To name a few: buying-in, contracting-out, competitive tendering, government owned contractor operated, government partnering, government to government, internal service delivery concentration, traditional outsourcing, private finance initiative, privatization, procurement, public private partnership, and shared service centers. This chapter will not address all these different concepts, models, types and forms. We attempt to provide a systematic introduction to the main issues that concern sourcing in relation to the armed forces. To this end, we first explore conceptual dimensions of sourcing. We provide a model of sourcing and introduce main issues associated with various forms of sourcing. We then identify challenges, lessons learned and measures relevant for military organizations to successfully manage sourcing.
