Introducing Sourcements

Sourcing processes are discussed at a high abstraction level. A dedicated terminology is developed concerning general aspects of sourcing. The term sourcement is coined to denote a building block for sourcing. No- tions of allocation, functional architecture and allocational architecture, equilibrium, and configuration are discussed. Limitations of the concept of outsourcing are outlined. This theoretical work is meant to serve as a point of departure for the subsequent development of a detailed theory of sourcing and sourcing transformations, which can be a tool for dealing with practical applica- tions.

💡 Research Summary

The paper “Introducing Sourcements” sets out to lay a conceptual foundation for a rigorous theory of sourcing, addressing the ambiguities that have long plagued the fields of outsourcing and insourcing. The authors begin by arguing that existing literature often conflates the static state of a sourcing arrangement with the dynamic process that transforms one state into another. To resolve this, they propose a clear distinction: a “sourcing state” (or simply “sourcing”) denotes the snapshot of source allocations at a given moment, while “sourcing transformation” describes the process that moves the system from one state to another.

Central to their proposal is the introduction of a new elementary building block called a sourcement. A sourcement consists of one or more sources together with the owning unit that controls them. Unlike a mere source, a sourcement captures both the technical artifact and the governance context, making it a closed unit that can be composed, decomposed, and arranged into higher‑level architectures. The authors argue that sourcements are “closed under composition,” enabling the definition of sourcement architectures and portfolios that can be analyzed for business case viability from multiple perspectives.

Four key concepts are defined to structure the theory:

1. Allocation – the act of assigning a source to an owner; the resulting static configuration is the sourcement.
2. Functional Architecture – the mapping of each source’s functional role within a process or service.
3. Allocational Architecture – the network of ownership, usage, and “belongs‑to” relationships among sources and units.
4. Equilibrium – a stable configuration where all units’ source allocations satisfy their strategic and operational constraints.

The paper draws an analogy with investment theory, noting that investment also has a dynamic act (investing) and a static result (investment). By mirroring this duality, the authors argue that sourcing should similarly distinguish between the dynamic act of source allocation and the static result – the sourcement. They further discuss granularity, emphasizing that sourcements can be examined at various levels, from individual sources to entire portfolios, depending on the analytical needs.

A substantial portion of the discussion is devoted to positioning sourcement theory relative to service science. While service‑dominant logic (S‑D logic) treats services as the primary unit of analysis, the authors contend that sourcements foreground the owners of production means, offering a complementary perspective that emphasizes control and capability rather than merely value co‑creation. They suggest that service science can be an ally, but sourcement theory provides a distinct lens for analyzing sourcing decisions, especially when ownership and strategic control are central concerns.

Outsourcing is re‑interpreted as a specific class of sourcement transformation. In an outsourcing event, a unit disposes of certain sourcements from its portfolio and, in exchange, new sourcements appear that allocate equivalent (or sometimes more, sometimes less) capabilities to other units. The authors caution that this definition does not guarantee mission protection or strategic alignment; thus, not every transaction that looks like outsourcing qualifies under their stricter definition.

Overall, the paper delivers a high‑level, terminology‑rich framework intended to serve as a launchpad for a more detailed, operational theory of sourcing. Its strengths lie in clarifying terminology, introducing the versatile concept of sourcement, and linking sourcing to broader theoretical domains such as investment and service science. However, the work remains largely conceptual; it lacks concrete methodological guidance, empirical validation, or case studies that would demonstrate how sourcements can be identified, measured, and managed in real organizations. Future research will need to flesh out the mechanics of sourcement architecture design, develop tools for equilibrium analysis, and test the framework against practical sourcing initiatives to confirm its utility.