Optimizing Your Sourcing Toolkit for Today’s Market

The velocity of change in the market continues to accelerate – and it’s the IT and business leaders’ jobs to keep up. In fact, enterprises today must not only find ways to keep up but stand out, tighten operations, and increase revenues all while improving the bottom line. The demands on IT leaders leaves little time to develop deep expertise in every new technology or process that comes to market. DevOps, automation, software as a service, blockchain and other disruptive technologies are all becoming standard tools in leading IT organizations. Whether they have full understanding of emerging technologies or not, CIOs and CTOs must leverage some combination of them and change the way they operate – or get left behind.

The speed of change means decisions must happen quickly, and interdependencies of decisions must be recognized early and considered at every point along the way. Few decisions have implications as far-reaching as sourcing decisions. Partnering with a third-party provider to deliver critical IT and business services can determine an enterprise’s path for many years. The sourcing industry is evolving under our very eyes with new delivery models and new contract terms that have redefined the sourcing relationship from the inside out.

Successful sourcing engagements depend on honest dialogue, attention to details, careful documentation and buy-in from all participants on the desired outcomes. But it can be a challenge to juggle multiple large contracts across an enterprise and collect and implement feedback to achieve those targeted outcomes.

A sourcing toolkit can provide the framework to engage dialogue and accelerate results in today’s frenetic market. Keys to success include the following four elements:

1. A proven methodology. Use a tested process for structuring dialogue and envisioning targeted outcomes so you get the most value from the sourcing exercise. Engaging business and IT leaders to create a unified view on objectives and goals generates more traction and buy-in than a top-down directive to pursue sourcing.
2. A framework for identifying potential inhibitors to success. Knowing the issues that may get in the way and addressing them early in the process can be a significant boon to the sourcing process. Identifying and removing roadblocks allows sourcing partners to more efficiently respond with a solution that meets business objectives and avoids time-consuming re-work.
3. A table set for all participants critical to the sourcing decision. Including stakeholders beyond just IT ensures buy-in and overall organizational alignment. Access to industry-tested contract templates and a vast database of past sourcing transactions can ensure the final agreements and price are market competitive and aligned for success in today’s business landscape.
4. A process that addresses the partnership end-to-end. Signature on a sourcing agreement is not a guarantee of business success. There are significant ripple effects from contract schedules and exhibits, transition and transformation planning and ongoing organizational change. Success is achieved via a comprehensive plan that supports activities to drive the change message throughout the organization and ensure the groundwork is set and roles are clearly defined to support the sourcing partner.

It’s a challenge to bend the decision-making culture of a global enterprise to the shorter timeframes demanded in today’s economy. ISG brings proven tools and processes like ISG FutureSource™ and unparalleled consulting expertise to maximize the benefits of sourcing and help clients meet the increasing velocity of the market all while taking thoughtful advantage of today’s innovative technologies. Contact us to find out how we can help you.

About the authors

Bill Duning is a strategic and forward-thinking leader with an accomplished history of successful sourcing transactions, financial analysis, decision support, cost savings, and organizational improvements. He  has worked with clients locally and internationally in both the private and public sectors.

John Stafford is a Principal Consultant serving as the primary financial advisor supporting clients on sourcing strategy and decisions. John’s broad financial experience across more than 18 years in the IT industry allows him to tailor the analysis and support to meet the client objectives. John combines the strong financial analysis skills with his contract negotiation experience to ensure clients are getting both an optimal financial outcome as well as terms and conditions that meet their business objectives.