IT Sourcing: Innovation Accelerator or Speed Bump?

Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom, transportation and energy.

Earlier this month, CIO ran an article on "Top CIOs Predict the Five-Year Future of the CIO". The article lists the different roles that CIOs will be expected to play in the next few years. Of these, there are three that caught my attention -- not because they're surprising, but because of the widespread impact this evolution will have on IT spend management. These roles are:

  1. Connector: CIOs will be responsible for breaking down the barriers between departments and external resources. They will be the driving force behind connecting workers, suppliers and vendors to achieve goals.
  2. Futurist: CIOs will be the appointed prognosticators and drivers for major changes in "how workers work, how consumers consume and how suppliers supply."
  3. Master of Business Metrics: CIOs will still be held accountable to familiar metrics like operational efficiency and on-time/on-budget project delivery plus one more: innovation. Their pay will become increasingly performance-based, similar to that of a CEO.

These "roles" won't be limited to CIOs. Everyone in IT will be expected to play a part. For that reason, the impact of these roles and responsibilities on IT spending and vendor management are significant. They will require a level of agility and flexibility that most vendor-enterprise relationships have never experienced. A collaborative vendor and supplier ecosystem will become instrumental to creating and delivering innovation. Cycle times for IT purchasing will decrease. Contract terms will need to account for the agility required of vendors to meet project and enterprise goals. As a result, the pressure to innovate will make cost management more complex.

The challenge today is for CIOs and IT sourcing departments to prepare now rather than react later. By streamlining and maturing IT purchasing, as well as implementing "checkpoints" throughout the process that ensure fair terms and pricing, they can mitigate cost management risks. Most importantly, IT sourcing can consistently be an innovation accelerator, not a speed bump.

- Jon Winsett, CEO, NPI

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