Key Themes in IT Strategic Sourcing

Key Themes in IT Strategic Sourcing
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I participated in a panel discussion in Denver in Aug 08, organized by CSIA and shared my views on four key themes that are emerging in IT strategic sourcing discussions – Collaboration, Community, Governance and Results, In short lets call it as CCGR.

Collaboration – Its more about collaboration and partnership today than it has ever been over the last decade of IT sourcing. Its the eco-syetem of collaboration through customers, service providers, technology and business alliances, analyst and advisors, suppliers – and their coming together to solve a business situation or problem. Key reason for Collaboration to move this fast has to do with the rate of change of business itself – be it the overall macro-economic condition, impact of globalization, growth of emerging economies or opening new market segments. Creating Incremental Value for the eco-system is the key and Collaboration is one of the key elements in making a difference.

Community – Following closely to Collaboration is increased involvement of internal communities within the buyers / customers. No Longer is strategic sourcing in IT is only an IT responsibility or decision. Earlier it used to be spotty involvement of non IT teams in a sourcing or process improvements. Now we see increased and continuous involvement of different business and enabling functions like Sales, Marketing, Manufacturing, Procurement, Vendor Management, HR, Finance, Operations etc. throughout the lifecycle of engagements. All of them are getting increasingly involved in making an impact by directly contributing to the effectiveness of sourcing programs. Key reason for increased community involvement has to do with impact of IT on business and hence involvement of all stakeholders to ensure continuous success and business alignment.

Governance – As IT has started to make meaningful business impact and its no longer only a contractual relationship, Governance is fast coming up as the centerfold to drive successful relationship. Its getting established across the value chain of the organization from strategic vision of the relationship across C levels to detailed operational and service management governance. We also observe a trend in specialist /niche organizations coming up just to focus on the business of governance from framework to continuous improvement and business alignment programs.

Results – Finally it all comes down to results that any sourcing relationship wants to achieve. An increased trend in pulling results upfront is bound to gain momentum. Results driven engagements will rise, companies will no longer be only interested in creating only a capacity based sourcing, they want to ensure that the strategic relationships deliver results as envisaged in the business case as per the agreed timelines. As sourcing strategies mature – it will also lead to continuous cycle of results and IT / Business alignment in a globally connected world.