The classic, one-size-fits-all, in or out approach to IT sourcing, built around long-term deals with traditional or established suppliers, is not agile enough for an increasingly digital marketplace.
It doesn’t enable CIOs to accelerate improvements in performance while controlling costs. Nor does it help organizations seize evolving opportunities to improve the frontend customer experience.
Multi-speed IT sourcing, by contrast, aligns with a multi-speed enterprise. It allows CIOs to leverage disruptive digital technologies at speed, tap into innovation, and use as-a-service-enabled models, whenever and wherever they are needed.
A traditional IT sourcing strategy no longer satisfies the requirements of the business.
A rapid plug-and-play sourcing strategy is mandatory.
CIOs need as-a-Service commercial models whose SLAs measure the value of work done, rather than the labor required to do the work.
Multi-speed IT sourcing requires an operating model and workforce running at multi-speed.
A successful multi-speed IT sourcing strategy needs to align with a multi-speed, services-based, and actively governed operating model. New talent types and skill sets are needed to ensure responsiveness to changing, as-a-Service sourcing engagements.
One size fits all is a good way to fail.
Value from labor arbitrage is rapidly diminishing. IT protocols need to be reinvented and the supplier landscape rationalized.
To establish a multi-speed IT sourcing strategy, take 4 key actions:
Identify and understand changes to the overall IT model. Design a plan and define the pace of change.
Create a step change in supplier management. Redefine your list of leading vendors and ensure your providers can align to your new required capabilities.
Leverage the extended ecosystem. Consider startups, in particular, as a source of innovation. Define your approach to integrating and balancing Xaas/cloud-enabled services with your overall sourcing mix.
Win the war for talent. Identify the new IT skills you need. Then assess your current IT sourcing mix and talent procurement approach, especially new partners who can help you drive value.