Forrester Sourcing Forum Dispatch: Transforming IT Sourcing in the Cloud (Part 2)

In the first post in this series, I highlighted some of Liz Herbert's recommendations around what factors to consider when buying cloud-based software and related content and solutions. I'll continue to highlight some of Liz's key points today, by first starting to examine the importance of considering cloud-based procurement strategies given the rise of what Liz describes as a significant increase in "business users making decisions" in the cloud area, relative to IT professionals. Liz started her discussion by talking about the rise of both enterprise and social applications in the enterprise. She shared examples such as the usage and selection of vendors such as Workday, Google, Aravo, Netsuite, Twitter, LinkedIn, Facebook, SurveyMonkey, ADAP and Ariba by business users.

One of Liz' fundamental arguments about why we need to pay much more attention to the cloud-sourcing phenomena is that the needs of business and IT users are increasingly conflicting with each other. On one side, business users are looking for a "a place to experiment, fast integration, faster time to market and responsiveness." In contrast, IT looks to vendor sourcing and management with a different list of priorities including the need for "plenty of notice" along with "predictability, stability, justification and controls." Yet if we dig below the surface, both business decision makers and IT have a vested interest in coming together on cloud-sourcing decisions for a number of factors, like the cloud M&A shake out (e.g., "Dell buys Boom (SaaS integration), Successfactors (CubeTree, YouCalc), IBM buys Cast iron Systems (integration technology), EZFacility and efit, First Derivitives acquires Cognotec, etc.") and cloud failures (e.g., "LucidEra, Cesura, Above All, Convoq").

Moreover, the cloud landscape is confusing, even to those within it. Forrester segments the cloud universe into four categories: Software as a Service (SaaS), the earliest cloud model, PaaS (Platform as a Service) which includes Force.com and Azure, IaaS (Infrastructure as a Service) and lastly, BPaaS (Business Process as a Service) which encompasses analytics, sourcing, and F&A software and enabling services, among other areas/examples. If you're curious to learn more about how to address cloud-specific challenges in the Spend Management area, I encourage you to read the three-part post series: SaaS Vendor Selection/Implementation Tips: Avoid Having the Cloud Pulled Over Your Eyes. Find it here, here, and here.

Jason Busch

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