Tips for Using Transformational Sourcing to Capture Lost Value

When you developed your sourcing strategy it probably had several key elements articulated in order to  achieve the resultant business case. In the end, were you able to execute against the entire plan, or did you achieve objectives only in specific areas?

The days of the lift and shift of assets and people are long gone. If there was not a fundamental transformation occurring, we were simply moving from high cost to low cost and showing significant savings. These solutions in most cases still had fragmented governance, non-integrated organization models, limited to no change management, and transitions that in some cases took twice as long due to lack of methodology and organization commitment. 

Today we have to be smarter about sourcing and how to capture lost value. Today’s “transformational sourcing” framework is designed to ensure that our clients can enable long-term value and sustainability. With this higher order of sourcing, investing in sourcing management, change management and re-tooling resources — in addition to transferring risk to service providers, designing optimized organization models, and defining enhanced IT governance processes — are all imperative for achieving greater value and sustainability.

Here are the Top 5 tips for IT executives looking to determine how to capture lost value or maximize value through transformational sourcing:

1. Implement a clearly defined organization structure that has minimal overlap of roles between the client and service provider.
2. Invest in the organization, tools and processes to implement a centralized sourcing governance model that has clear separation of duties between the operational groups.
3. Ensure that the leadership team is highly experienced and can manage to the outcomes along with having a clear vision of success — not a vision of the past. Change management is key to driving the new model’s culture and behavior.
4. Implement a well-defined set of IT governance processes that establish solid demand management, forecasting and decisioning processes.
5. Conduct a comprehensive roles and skills analysis to ensure you can move the best talent into key roles, and establish a training program to evolve personnel into new roles.

ISG’s seasoned transformational sourcing experts can help your company define the right strategy through our experience, objective advice, industry knowledge and depth in all aspects of information technology and business process services.