IT Strategic Sourcing Tips to Save Costs and Drive Innovation
- IT sourcing presents both challenges and opportunities for businesses in a constantly evolving landscape.
- Strategic recommendations include comprehensive reviews, strong vendor relationships, and leveraging technology for optimization.
- Implementing best practices and prioritizing strategic sourcing can drive value creation and success.
April 16, 2024 | Sourcing Strategy
The IT sourcing landscape is in constant flux – presenting both opportunities as well as challenges for businesses. Indeed, technological advancements bring innovation but also magnify skilled labor shortages and price hikes from enterprise vendors.
Considering that IT services are likely going to be the fastest growing spend subcategory, companies must adapt the way they think about strategic sourcing. So, what are the strategic recommendations?
1. Comprehensive Review
Conduct robust research on delivery models, labor contracts and key performance indicators to identify opportunities for improvements. Here, a useful strategy is to wield data analytics and market intelligence that can offer real-time insights into available chances to save.
2. Vendor Relationships
Strive towards healthy, reciprocal relationships with your major suppliers while avoiding vendor lock-in. Also, encourage positivity for sustained problem-solving and hold regular meetings to gain value for everyone involved.
3. Technology and Process Changes
Make sure technology and process changes are done correctly. Use AI and machine learning to automate mundane tasks, optimize workflows and improve decision-making processes.
Also Read: Strategic Sourcing: From Cost-Centric to Value-Driven
In addition to the strategic recommendations, here are some tips on IT strategic sourcing for software and hardware segments:
Software
The software segment has been a focal point for IT spending, with companies increasingly investing in digitalization efforts and expanding core platform capabilities.
However, the increase in vendor prices is a significant challenge. Therefore, mature practices around software asset management and governance are needed. Moreover, continuous monitoring of software acquisitions and utilization along with standardized procurement processes helps to mitigate risks and optimize costs effectively.
Hardware
Though end-user and data center hardware segments may experience slower growth, cloud infrastructure offers new opportunities for companies. Exploring alternative maintenance options can optimize existing assets and control demand. Additionally, a soft market provides a prime opportunity to procure hardware requirements competitively, maximizing cost savings and flexibility.
Prioritize Strategic Sourcing
The dynamic IT sourcing landscape necessitates a strategic approach that transcends cost savings alone. By conducting thorough reviews, nurturing vendor partnerships, and leveraging technology, companies can optimize procurement processes and drive value.
Implementing best practices in software and hardware management, coupled with data-driven insights, can help mitigate risks and identify improvement areas.
As the digital world evolves, organizations that prioritize strategic sourcing as a key driver of value creation will be best equipped to navigate challenges and seize opportunities in the face of increasing competition and technological disruption.
Here’s how GEP can help your organization in strategic sourcing.
