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A Continuous Discipline in an Agile Environment
With digitalization, the area of sourcing, among others, is also evolving. In addition to traditional outsourcing initiatives, new services like cloud, artificial intelligence, and data management are emerging. Furthermore, traditional collaboration is shifting to more agile models that influence the classic procurement process. In this agile environment, sourcing remains a core discipline of IT, with its importance set to increase in the future. Sourcing encompasses not only procurement but also emphasizes management, partnership collaboration, and the development of service providers. The quality of sourcing-such as a holistic approach, defined processes, and transparency in the service provider landscape-and the underlying sourcing strategy significantly impact the quality of IT service delivery and the value of business support.
Connection between IT, Sourcing, and Service Provider Strategy
The sourcing strategy defines which different sourcing models should be applied in the corporate IT and the criteria by which an appropriate sourcing model is selected for a service or application. The key factors here are the desired depth of production by IT, as well as the business goals and requirements.Based on the strategy, a structured sourcing process ("supplier lifecycle") and subsequent effective contract and supplier management are essential. A structured sourcing process includes a clear definition of the required services, quality standards, and the collaboration model right from the start. This clarity at the beginning of the process lays the foundation for good collaboration and smooth service delivery.
General Alignment of the IT Organization
Medium- and Long-Term Goals of the IT Organization
Provides the framework for the sourcing and se.rvice provider strategy
Internal vs. External Sourcing
Development of Service Type and Service Type Strategy
Selection of Various Sourcing Models (Core Service vs. Supplementary Service)
Nearshoring vs. Offshoring
Service Provider Selection
Service Provider Landscape
Service Provider Scouting
Service Provider Evaluation
Service Provider Relationship Management
Service Provider Exit and Termination
Why Does the Sourcing Process Not End with Service Provider Selection?
Due to the increasing share of outsourced commodity IT, companies find themselves in a complex network of internal and external corporate resources. These relationships create mutual demands and dependencies, leading to specific challenges and questions for the IT organization to ensure that its own outsourcing initiatives do not fall short. These challenges include increasingly complex service provider management, lack of transparency regarding services and contracts, and a long time-to-market during provider selection.Therefore, it is crucial not to focus solely on individual parts of the sourcing lifecycle. Instead, service provider management must be approached from a holistic perspective. The core element in sourcing and related provider management is a clearly defined strategy that considers the entire sourcing lifecycle. Sourcing should not be seen as a one-time activity, limited to tendering and contract signing for a service, but rather as a continuous process through which purchased services and associated providers are managed, improved, and integrated into the company's IT landscape. Sourcing is thus regarded as an integration discipline that also contributes significant value to IT through the management of the supplier portfolio.
1 RfP & Sourcing
- Standardized Processes and Organizational Structures
- Standardized Contract Templates and SLAs Depending on the Service (e.g., Managed Service, Cloud)
3 Delivery
- Service Provider Management
- Regular and Standardized Performance Measurement
- Service Provider Audits by Provider Management
- Service Provider Development
- Supplier Quality Management (SQM)
2 Transition
- Establishing Service Provider Management
- Standardized Reporting and Control Instruments
4 Change/ Phase Out
- Contract Management Process
- Termination Process
Flexible IT Sourcing
Why There Is No Longer a "One Size Fits All" Solution
It is evident that the types of services provided by external service providers are more diverse than ever-ranging from the development of simple applications and database outsourcing to the cloud, to maintaining entire IT infrastructures and executing large-scale software projects. Depending on specific IT requirements, companies can choose from a broad spectrum of options-from specialized IT boutiques to comprehensive packages offered by global players. Similarly, the extent of outsourcing varies-from individual services to complete full IT outsourcing. It becomes clear that different types of services require different approaches. Furthermore, digitalization also impacts the new sourcing requirements.
How Does Digitalization Impact IT Sourcing?
Digitalization requires more dynamic, flexible, and agile approaches. This shift fundamentally changes the requirements for suppliers and impacts the IT sourcing model. The forms of collaboration between IT and suppliers are evolving from purely service-based to a collaborative partnership. Drivers of this change include agile methods like Scrum or DevOps, which require a team-oriented approach rather than a traditional client-supplier relationship in both operational and change contexts. Additionally, cloud technologies-whether SaaS, PaaS, or IaaS solutions-necessitate a different approach to sourcing and the underlying supplier and contract management.
Our Approach
Strategy
We advise you on defining your individual sourcing and service provider strategy based on your overarching IT strategy.
Operational Support
In addition, we will support you as a temporary partner in the operationalization and stabilization of your sourcing strategy, assisting with implementation and integration.
Supplier Selection
We also support you in supplier selection and the transition to new service providers, including the implementation of a clearly defined management model.
Overcoming Obstacles
We help you overcome pitfalls and obstacles along the way or find an alternative path that leads you to your goal.
Why 4C?
We have experts in the necessary fields for a comprehensive view of IT sourcing. We provide market insights as well as relevant expertise and methods to leverage current challenges as opportunities for implementing an integrated sourcing approach. We advise our clients on strategic sourcing issues, service provider selection, and provider management. If you share our approach and seek a holistic sourcing strategy to address current challenges in service provider management.
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