As outsourcing relationships evolve to meet the new demands of the age of digital transformation, traditional ways of sourcing procurement are also having to change.
The demands on businesses are continually changing and at an ever increasing rate. In response, IT is having to adapt to new ways of working with significantly increased flexibility, speed and agility. In this new world, stagnant outsourcing arrangements, set out in “chapter and verse” in the contract are not fit for purpose. Instead the arrangements need to establish the legal framework but provide for ongoing change and transformation based on a transparent and trusting relationship.
The Dreaded Exit Plan Review!
You can hear it now – “We need to review the Exit Plan” and everyone suddenly has a more pressing meeting to go too. Perhaps the reason for this reluctance to review the plan is that it is immature and lacks credibility yet isn’t seen as a problem. Exit is one of the key risk areas around outsourcing and it is important to spend time and effort to understand and manage the risk. When you have actually been involved in a number of exits, have learned lessons and seen the difficulties that organisations face from a commercial and service perspective, you will appreciate that this is not an area to be ignored.
Latest research from Quantum Plus shows clients are unanimous in their disappointment with the value brought to them by their supplier’s mid-term. Once the deal is done the technology transformation (and therefore value) seems to fizzle out rapidly.
In our recent client-side event; The Future of Technology Sourcing, 100% of clients said they saw no innovation and transformation from their incumbent suppliers, what a disappointment!
The future of IT delivery in an increasingly digital and automated world will become dependent on highly efficient and flexible sourcing. The model will need to flex over time and adapt to the emerging disruptors in the IT and business environments. This will mean that your Supplier Relationship model will have to adapt to accommodate these changes.
An effective Supplier Relationship model should enable you to: