Strategic Sourcing for Digital Transformation

This paper discusses the challenges and strategies for organizations undergoing digital transformations while relying on outsourced IT functions. The author argues that while insourcing IT capabilities has been a successful pattern in many enterprise transformations, it is not always practical for organizations heavily dependent on outsourcing contracts.

The paper highlights the problems that arise in typical outsourcing scenarios, such as lack of in-house capabilities, misaligned incentives, and difficulty in driving collaboration among suppliers. It also acknowledges the challenges global systems integrators face in supporting their clients’ DevOps journeys.

The author suggests that organizations need to carefully plan their sourcing strategies, considering factors such as growing internal capabilities, aligning with HR and Finance, and creating compelling propositions to attract and retain talent. They also discuss various procurement models, such as capability centers of excellence and managed services for cross-functional teams, along with their respective challenges.

The paper concludes by summarizing seven keys to success for organizations navigating this transition, including being intentional, gaining leadership alignment, transforming procurement, growing talent, and fostering collaboration among partners.