This is the first in a two-part series.
When I first read about strategic sourcing in Forrester, IDC, and Gartner reports back in 1999, I thought the analysts had no clue what procurement was. But then I realized that they were specifically referring to another IT-centric definition of strategic sourcing, rather than one focused on broader procurement, finance, and supply chain.
I came across a more recent IT and vendor management centric view of strategic sourcing that continues to highlight the information divide between such programs in isolation within IT and when managed or at least influenced by a centralized procurement function with mature strategic sourcing practices, tools, expertise, and capabilities. The Data Center Dynamics article begins with the following suggestion: “A number of services have emerged to aid executives with complex markets and there is an attempt to place these services under the umbrella title of IT sourcing.”
The article then gives a brief and somewhat pessimistic history lesson of IT sourcing trends, up until the present day when current “advocates of IT sourcing point to benefits such as money savings and solving procurement problems [related to] lack of control.” But IT sourcing is now broken into many sub-categories given the vast changes in what IT buys today vs. what it used to, such as “public, private, hybrid cloud, IaaS (Infrastructure-as-a-Service), PaaS (Platform), SaaS (Software), XaaS,” and so forth.
Of course the biggest change in sourcing is the move from buying products and software that one can physically install and grasp to buying services. And this introduces a myriad of new requirements into the IT strategic sourcing equation, which make the need for specialized approaches and even technologies that much more important than deploying standardized approaches.
Stay tuned for Part 2.